Archive for BlumShapiro

Two Key Benefits of HR Analytics

In my last article, I wrote about the definition of HR Analytics and the skills needed to be successful in this field. In this article, I want to discuss two key benefits of HR analytics to the HR function in an organization and to the business: Evidence Based Decisions and Reducing Human Bias.

HR professionals want to be strategic partners with business leaders, not simply a cost center designed to maintain policies and procedures. While these policies are important, analytics provides HR with a means to demonstrably improve the efficiency of a company’s people resources. It does this in several ways.

Evidence Based Management Decisions

Through its dependence upon data and facts, HR Analytics delivers evidence, and evidence trumps intuition. To support these benefits, I’ll ask two questions:

Is your interview process optimized to find the best candidate for a position?

If you have ever participated in an interview process from the hiring perspective, you may be aware that at many companies, interviewing candidates can be an informal, non-standardized process. At worst, interviewees are simply asked by HR “What did you think?” More sophisticated HR methodologies define a standardized process for who the candidate meets and what questions are asked. At each stage, feedback is collected and quantified, typically in the form of ratings. Are these ratings predictive of future performance in the job role to be filled? HR Analytics can tell you the factors that are predictive of high performers in certain job roles (or tell you that you don’t know and that you should either change your process or collect different data points).

Does internal employee training improve company performance?

Most HR professionals would say ”Yes, employee training is a good thing and we need to do it.“ Many top companies spend precious resources to train their sales staff or send aspiring leaders to leadership training. Does this training have a material impact on performance? On the company’s bottom line? HR Analytics aspires to quantify that benefit. To do this, we may need to pull together data from several systems, such as on-the-job performance data, financial data and data collected during the training process. We should define the performance metrics that are most important in that job role. We must also consider a baseline of performance (i.e., comparable employees who were not able to take the training). By taking a more scientific approach, we can quantify the benefit and produce evidence of impact. We may also demonstrate that certain training is ineffective.

Reducing Human Bias

If you have read Michael Lewis’s book The Undoing Project, then you know about the work done by psychologists in the last 50 years to explain how bias interrupts the human mind’s ability to perceive information. Literally, our personal bias leads us to see things that simply are not there. We all have expectations, and these expectations are based upon hard won human experience—most of which has served us very well in life. But in the case of making HR judgments, or indeed any judgement requiring us to process large amounts of information, bias is quite detrimental.

In the questions/examples provided above, we see the opportunity for human bias to creep into common HR processes and potentially undermine them. First, let’s examine the interviewing process. As people, we may have expectations about how a qualified candidate dresses, how they speak, and which personality traits are most prominent in a good candidate. These are likely informed by our own experience, and colleagues who may have made a deep impression on us. Just as likely, information contradicting the same bias is dismissed. This means that our human minds are not able to process large amounts of information in a uniform and objective manner. When applied correctly, HR analytics can do this much better.  For example, an HR analytics team would consider data collected during the evaluation phase and performance data for successful applicants; in other words, before and after hire. Hopefully, many applicants become very successful at your firm, but you also know that many do not. We can apply a label certain to each candidate profile, recognizing that the candidate either was or was not successful.  We can then train our analytics algorithms to learn what a successful employee will look like, mathematically, at hire time and reduce our human bias. Bear in mind that bias can still creep into the process, if interviewers fail to recognize the need for standardization and quantification.

Similarly, as it relates to evaluating training against performance, we see an opportunity for bias to lead to conclusions that are false, or at least for which there is no evidence. Business leaders can (and should) demand this evidence from HR, so that they know that capital is being deployed correctly in support of the firm’s financial well-being. To be clear, it can be very difficult to prove causation between training and financial ratios (i.e., that training causes an increase in Net Income). However, HR should be able to provide evidence demonstrating correlation between employees who perform well on the job (be that metric in sales figures or on-time delivery) and those who attend certain training activities. When HR provides evidence of this correlation, it becomes a strategic partner with business leaders, helping them see and understand the patterns in human behavior.

See Differently, Know the Facts

Analytics offers HR professionals an opportunity to approach decision making differently. Measurements and quantification of candidate and employee characteristics and performance can provide evidence of correlation between the policies HR is supporting and the outcomes the business seeks to drive. By thinking differently about HR, we can reduce our propensity to see things that are not there, replacing that vision with a clear eyed, scientific, data-driven approach.

Want to learn more about the world of HR Analytics? We are speaking at this year’s CBIA Human Resources Conference on the topic. We hope to see you there!

Berry_Brian-240About Brian: Brian Berry leads the Microsoft Business Intelligence and Data Analytics practice at BlumShapiro. He has over 15 years of experience with information technology (IT), software design and consulting. Brian specializes in identifying business intelligence (BI) and data management solutions for upper mid-market manufacturing, distribution and retail firms in New England. He focuses on technologies which drive value in analytics: data integration, self-service BI, cloud computing and predictive analytics

5 Warning Signs Your Company Has Outgrown QuickBooks

Cloud accounting image

If you’re a small business, you’re most likely running QuickBooks. In fact, millions of businesses use QuickBooks as their very first accounting system. Why?

When companies are starting out, they can’t afford to make huge investments in finance systems. They spend $100 dollars or so and they are all set. They don’t have to invest in training and can be up and running in a matter of days.

For a lot of businesses, QuickBooks is the last accounting system they will ever have to buy because their needs don’t change.

What if Your Business is Growing?

But if your business is growing and evolving, your finance system needs to adapt. Your reporting requirements evolve. More and more people depend on critical reports and financials and need them quicker.

Most businesses respond to these increased expectations by compensating with manual entries, workarounds and the biggest crutch of all…spreadsheets.

As they continue to evolve, they add more workarounds, and more manual, duplicate data entry and more band aids. Now they are so in the weeds trying to get basic financials issued each month that they lose sight of how difficult their life has become each month.

The Key Warning Signs You Have Outgrown QuickBooks

Based on my experience with hundreds of companies, I would like to share with you 5 Warning Signs That Your Company Has Outgrown QuickBooks. We’ll cover the first two warning signs in this post and discuss the last three in our next post.

Warning Sign #1 – Monthly Reporting Nightmares
QuickBooks designed its reporting capabilities for very small businesses. In order to get more complex, meaningful financial reports, all of the data must be exported to Excel, summarized, formatted and printed manually each month.

Change a single amount and you need to repeat the entire process again.

How much time are you wasting taking all of these extra steps each month? What more productive and valuable activities could you be working on instead?

Warning Sign #2 – Disconnected Critical Systems
Let’s face it, as your company grows, your systems become more complex.

You need more systems to manage the operational aspects of your business: customers, time and billing, sales, orders, production, payroll, scheduling, delivery and fulfillment.

QuickBooks was designed to stand alone, creating disconnected silos of information that are very difficult to manage as you grow.

If you are only entering your sales data once a month from your billing system, it’s hard to have any visibility into operations during the month.

Want to Learn More?

If you would like to learn more, we have compiled a free e-Book for you. Simply click here to download.

Please see the original post on the Cloud Accounting Blog >>

7 Reasons You Should Consider Outsourcing Your Finance and Accounting

Successful businesses, no matter how small or large, are able to focus, like a laser beam, on what’s important: innovation, customer service, growth, company culture and winning against their competition.

Finance and accounting, while critical to business operations, is often urgent, but not important. Yet so many executives like you allow themselves to get distracted from these critical success factors by responding to inquiries, tracking down missing checks, making sure the books get closed accurately and reconciling accounts.

If you are looking for better ways to focus on growing your business you should consider outsourcing your finance and accounting operations. Here are seven key benefits of outsourcing accounting and finance.

  1. Be more efficient– For one week, keep track of how you spend your day. (You can easily accomplish this with a free tool called toggl. http://toggl.com ) How much time do you spend each week on finance and accounting? If it is more than 1 – 2 hours a week…it’s too much. You should be spending your time improving operations, better serving customers and growing your business. Removing the daily distractions of accounting will help you do this.
  2. Reduce costs – Outsourcing your accounting eliminates all of the costly taxes and fringe benefits associated with full and part time employees. You pay one fixed monthly fee for everything. Research has shown that outsourcing accounting can save up to 40% in monthly costs, when you consider the salary plus taxes, supervision, vacation and health insurance.
  3. Eliminate fraud –Most small businesses have one accounting person that does everything….sends out the bills, collects and deposit checks and reconciled the bank account. When these duties are not separated, you increase your risk of fraud. A recent Association of Certified Fraud Examiner’s study showed that the most common victims of fraud are privately owned small businesses with less than 100 employees with an average fraud amount of $147,000. Outsourced accounting provides you with the checks and balances, as well as the oversight that you need to prevent fraud.
  4. Highly qualified and experienced staff – By having a team of accountants and CPAs work together to take care of your books, you can take advantage of their significant accounting, tax and compliance expertise which is all included in the monthly cost. By outsourcing you will automatically stay ahead of and comply with the myriad changes in income and sales tax and reporting laws.
  5. Ability to scale – By outsourcing finance and accounting, scaling your business becomes easier. Rather than distract yourself by hiring additional finance staff, outsourcing grows automatically with your business. You can focus on hiring the best people to sell your products and service your customers…which goes right to the bottom line.
  6. Improve cash flow – Outsourcing provides you with access to cloud based tools and technologies that will help you get paid faster and manage payments more effectively. At the simple click of a mouse, you can see an up to minute analysis of your cash.
  7. Better Manage Your Business –What type of information are you receiving today from your finance system? Most importantly, how timely is it? When you get last month’s financial on the 20th of the following month, how do you support decisions in the beginning of the month? Outsourcing provides you with real time information on all aspects of your business, not just financials, with the click of a mouse.
Can your company benefit from outsourcing your finance and accounting? Take our 1 minute assessment! Get your assessment now >>

7 Free Informative Webinars for CFOs and Finance Professionals – March 2016

Cloud Accounting Blog Logo

Every month, Intacct sponsors a series of informative webinars covering critical issues for CFOs and finance professionals.

Here is a list of their webinars for February / March 2016. Click the Learn More button for additional information or you can register directly by clicking the Register button.


The Tech-Savvy CFO: From Visibility to Insight

Thursday, February 25th at 11 AM PT / 2 PM ET

Everyone is turning to you for answers… So, where do you turn for the technology to give you those answers?

Learn More

Register


Project Accounting and Financials for Your Services Business

Wednesday, March 2nd at 11 AM PT / 2 PM ET

For services and project-based companies, capturing 100% of client billable time and expenses, developing accurate budgets and forecasts, and improving cash flow management is always challenging. How can you meet these challenges?

Learn More

Register


Cloud Financials Done Right: Avoiding the Pitfalls of Implementation

Wednesday, March 9th at 11 AM PT / 2 PM ET

Your financial management and accounting applications are one of the most critical components of your business infrastructure. Switching to a new accounting system can seem overwhelming, but it doesn’t need to be.

Learn More

Register


A Board’s Eye View into SaaS Metrics

Thursday, March 10th at 11 AM PT / 2 PM ET

For SaaS companies, fast growth requires fast decisions made with the right information. How can you quickly get the critical information you need?

Learn More

Register


Revenue Recognition Made Easy for Your Project-based Business

Wednesday, March 16th at 11 AM PT / 2 PM ET

Are you spending too much time tracking down project data and manually recognizing revenue?

Learn More 

Register


Not Your Mother’s Chart of Accounts—Leveraging Cloud Technology for Nonprofit Accounting

Thursday, March 17th at 11 AM PT / 2 PM ET

Your chart of accounts is the foundation of your finance system, but does it support your current and future reporting needs?

Learn More

Register


Finance and Project Analytics for Services Businesses in 2016

Tuesday, March 29th at 11 AM PT / 2 PM ET

With real-time financial and operational analytic, services businesses—technology, consulting, business, construction, and other services—can effectively manage revenues, costs, and overall performance. Where can you find this information?

Learn More

Register


View the original post on the Cloud Accounting Blog here >>