Accounting Trends in 2022 That Can Help Your Business

Accounting Trends in 2022 That Can Help Your Business

The accounting industry continues to quietly undergo a transformation that will be revolutionary once the history books are written. This transformation is mainly the fruit of rapid developments in the technological infrastructure that powers the day-to-day functions of accounting practice. 

Those organizations who are adaptable and among the early adopters of these emerging accounting trends stand to capitalize significantly over their competition. On the other hand, organizations that are resistant to change will fall farther behind and may even become obsolete.

In this article, we take a closer look at three emerging trends in accounting practice for 2022 and how they can help your business.

1. Accounting Automation

Accounting automation is enabled by cutting-edge software programs that allow daily accounting functions to be completed with minimal human involvement. Any routine accounting function that has a clear set of rules can now be designed by software and executed by these programs automatically without human intervention.

The automation of accounting functions will be a rapidly growing trend in 2022. There are tremendous benefits for organizations who adopt automation technologies in their accounting practices. The two most significant benefits are increased efficiency and reduction of errors.

Increased Efficiency

Prior to automation, many daily accounting tasks were done manually. These manual tasks were time-consuming and required substantial amounts of human resources. With accounting automation, these tasks that were once done manually are now done automatically by software programs. The result is that those tasks are completed much faster and with much fewer human resources.

This increased process efficiency enabled by automation allows the members of your team to focus on activities that are more valuable to your organization. These high-value activities include delivering better customer service and spending time on strategy and planning. Since the manual tasks are now automated, your accounting team is freed up to delight your customers more as well as spend time and energy planning how to make your business even better for the future.

Reduction of Errors

If your accounting team is overwhelmed by a mountain of daily tasks that they have to do manually, they will have to work faster to try to get everything finished on time. This rushed process will inevitably result in more errors in their work. Accounting errors are not only a source of liability for your company, they also take up a considerable amount of extra time by having to diagnose, correct, and readjust downstream books and records that were impacted. 

By implementing automated accounting technologies in 2022 your organization will experience tremendous benefits because the automated programs will be able to detect and even prevent accounting errors from occurring. Furthermore, if an error is detected by the automated accounting program, it will be much easier and less time consuming to fix because once the error is corrected, the software will take care of adjusting all downstream books and records that were affected by the error.

2. Agile Accounting

A recent survey found that 54% of CFOs plan to make remote work permanent for their accounting teams even after the coronavirus pandemic is over. This phenomenon represents a major shift in thinking about traditional processes within accounting departments. 

One of the most significant consequences of this shift is that accounting teams will need to be more agile in 2022 than ever before. In short, an agile accounting team is one that can have its members working in different locations at different times, but still meeting the goals of the accounting practice.

One of the keys that is going to enable agile accounting is cloud storage technology. Prior to the dawn of agile accounting in the industry, firms stored their accounting data on local servers within their organizations. As a result of this local storage, team members generally needed to be onsite to access the accounting data. With cloud services, an organization’s accounting data can now be securely stored within the cloud and accessed from anywhere in the world. In this way, cloud storage is a game-changer and has revolutionized the approaches businesses are now taking towards implementing more lean and agile accounting processes in their organizations.

In addition to bringing increased agility to accounting teams themselves, agile accounting is also going to have an impact on hiring and retaining top accounting talent in 2022. Agile accounting methods have obvious attractions for potential new team members. With an agile model, job candidates are attracted by the ability to work from their current cities and not have to move to a new location. They are also enticed by being able to work at different times during the day or night depending on what best suits their lifestyle. 

In short, agile accounting methodologies—enabled by cloud storage technology—will be a major disruptor in 2022. Accounting teams will become more agile and leaner than ever before. Organizations who don’t adopt agile methods may encounter problems hiring and retaining top accounting talent in 2022.

3. Outsourced Accounting

The year 2022 will also see a continued increase in outsourced accounting. Outsourced accounting encompasses many accounting functions including:

  • Accounts payable
  • Account receivable
  • General ledger accounting
  • Budget projections
  • Payroll
  • Time and expense reporting

With outsourced accounting, these standard accounting functions—as well as many others—are outsourced by businesses to specialist accounting firms.

Many organizations will continue to realize in 2022 that outsourced accounting firms bring a wealth of experience to their business. Additionally, by entrusting their standard accounting functions to qualified experts, businesses are freed up to focus on high-value activities such as revenue generation via more sales and better customer service.

Two additional benefits that businesses will realize from outsourced accounting services are the application of advanced technologies to their accounting processes and consultative financial expertise. Third-party outsourced accounting firms are experts in the latest accounting software programs. These outsourced partners can help businesses build valuable accounting software ecosystems that will automate many of their accounting functions. 

Outsourced accounting partners also bring tremendous value to their clients in the form of consultative financial guidance to help their business planning and strategy. With outsourced accounting, you get access to a highly-experienced controller or CFO who can leverage their decades of experience to help you optimize the accounting and financial aspects of your business even further.

Staying Ahead of the Accounting Curve in 2022

As you can see, 2022 is going to be a year of rapid progress for the accounting industry. Accounting teams who are quick to adopt automated accounting technologies will make leaps over their competition in terms of vastly increased efficiencies. 

Additionally, companies who become leaner and more agile will enjoy higher employee satisfaction and be able to attract top accounting talent. For organizations who are feeling overwhelmed by the demands of running a top-notch accounting practice, outsourced accounting services will be more necessary than ever in 2022.

For more information on how Lavoie can help Charlotte businesses stay ahead of the accounting curve in 2022, reach out to us today by calling 704-481-6699.

Women Who Lead: Fabi Preslar with SPARK Publications

Women Who Lead: Fabi Preslar with SPARK Publications

Each #WomenWhoLead feature will be showcased on a wall mural in South End Charlotte. If you know a woman leader who you want to feature on the wall, please click the button to nominate her.

Fabi Preslar (we’ve learned is pronounced “Faybee”) and her entrepreneurial life fueled by SPARK Publications have been one of perseverance and thriving through opportunities to get to a sparklier creative situation on the other side.

Although it seems like she lost a great deal as a teen, courageously leaping into her own new life eventually brought about a dream life of creatively working with her family, a great company serving high-profile business owners, and receiving national recognition. As a firm, SPARK Publications has won over 250 industry awards celebrating their marketing design and publishing work for clients.

Although little of this came easy, Fabi has been awarded an international 2021 Gold Stevie Award for Chief Happiness Officer of the Year, a national 2020 FOLIO magazine: Top Women in Media, was inducted into the 2019 North Carolina Women Business Owners Hall of Fame, and the 2018 First-Generation Family Business of the Year by the Charlotte Business Journal, and as Woman Business Owner of the Year by NAWBO Charlotte in 2017. 

We had a quick conversation with Fabi about her entrepreneurial life, providing her such a deep opportunity for personal growth while creating a successful business publishing for other entrepreneurial rock stars.

 

You are the founder of SPARK Publications. Tell us how you got to where you are now.

My business ownership story started several generations ago with my great grandfather and numerous other family entrepreneurial attempts. Each one ended with great detriment to the livelihood of our family. My parents immigrated from France to start their young married life. My parents, sister and I lived in many places including Canada, Bahamas, Paris, as well as various places along the East Coast in the United States. The summer before my senior year of high school, the restaurant my parents launched in Columbia, South Carolina, closed, which led us to lose our home and the farm we lived on. A family friend in North Carolina opened up her home to take in my family. Once my parents got back on their feet and started their new lives, it was time for me to start my own life. At seventeen, I moved to Charlotte without family support, no car, no money. I knew no one. I worked three jobs to put myself through Central Piedmont Community College to become a graphic designer. From there, I slowly built a life of creativity, love, and business as I worked as an art-director, general manager, and designer for various firms. While working at the Charlotte Observer, I met and married my husband, Larry, less than six months from when we met. At twenty-two, I gave birth to our daughter, started my first business, and then merged that graphic design business with a small printing company to form a corporate newsletter publishing company. That ended after six years with some really hard business lessons learned.

Today I am the founder and president of SPARK Publications, a twenty-four-year-old national award-winning, publishing firm specializing in custom magazines for trades and association and independently published non-fiction books to help grow businesses, brands, and platforms. Every day I get to work with my husband, daughter, a great team of SPARKlers, and a client base beyond my wildest dreams.

What has surprised you about owning your own business?

My biggest overarching surprises are the depth of what I’ve learned about myself and the amazing opportunities that come my way each year. I launched SPARK Publications with several goals: 1) to spend time with my family (everyone was spending more time with my husband and daughter than I was). I hadn’t placed the proper focus on my role as wife and mother, and I really wanted to. The first six years were home-based. 2) I’d gathered so much knowledge and applied skills as a designer, pre-press tech, the many steps in publishing and customer service, I couldn’t find a position that encompassed all the skills and creativity I had to offer. 3) I had lived life so fast from the age of seventeen that it was time for me to emotionally and spiritually get a better perspective, grow up, and truly discover who I am and how to best live my purpose (be careful what you ask for!).

Ten years into this business journey, my husband joined and at twelve years, my daughter became part of my firm’s full-time team. This enabled us, along with my other SPARKlers, to continue to grow ideas from my heart along with their exceptional talent. I have deep gratitude for these beautiful surprises. Owning a business brings constant surprises. I’m learning to celebrate the fun ones and more easily work through the tougher ones.

What’s something new you’re learning right now?

I love the impact my team makes with our magazine and book clients. Lately, the requests for me to become an entrepreneurial speaker, guide, and consultant are growing. I’m getting to vulnerably and authentically help business owners get clarity to love their life and businesses even more. I’m doing more speaking and workshops around the topics of “Fabulous F WordsTM to Fuel Your Future Story” and the fun concept of “Flailing ForwardTM”. I didn’t think I’d love it as much as I do. My time is currently limited to serve those increasing clients and opportunities while growing and managing SPARK Publications and SPARK Digital Design®. A third venture has me learning to get much better at scheduling my energy and time.

What advice would you give your younger self?

Although most who meet me for the first time wouldn’t know, I’m a deep introvert and still struggle with a lack of confidence. So, I’d let baby girl Fabi know that everything she experiences is going to be of value in a future situation. Everything gets you ready for the next thing and the next thing will be less hard because of the previous hardships and lessons. Be confident that you’re always on the right path for the next great lesson and experience. And have a bit more fun—hard times and challenges are a way of life and so are the good times.

Who are your mentors?

Joan Zimmerman, Dee Dixon, and Sara Blakely (from afar) are some of my business mentors. I was recently selected for a page feature in Entrepreneur magazine. When the printed issue arrived, and Sara Blakely was on the cover and our features were just a few pages apart…that was an energetic nerdy dance celebration moment for me.

Dee and Joan have always been there to cheer me on and provide that needed real-world kick and kindness just when I needed it most. Even with a great family, having mentors that can call you out and cheer you on is priceless. I’m paying it forward now with several amazing women in business.

 

How can you become a good leader?

I think to be a good leader we have to first be a good student of life. We need to be willing to take the time to be the best we can be as a person and take the courage to honor, and at times, rebuild the foundations we previously built that no longer serve us.

How Healthcare Organizations Can Realign Their Finances Amid the COVID-19 Crisis

How Healthcare Organizations Can Realign Their Finances Amid the COVID-19 Crisis

The COVID-19 pandemic has been an incredibly trying time for the healthcare field. Hospitals are facing an unprecedented financial crisis driven by labor and supply chain issues as case numbers and breakthrough infections continue to surge. Kaufman Hall estimates that hospitals across America experienced about $54 billion in losses in 2021.

The US government estimates that more than half a million American healthcare workers were infected with COVID-19, with over 2,500 dying from the novel coronavirus. Subsequently, significant numbers of nurses and other healthcare workers took early retirement, sought more lucrative travel nurse opportunities, or transitioned to other careers as hospital management issues continued to compound. 

However, the shortage of skilled healthcare labor is also exacerbated by supply chain problems. Congested ports, disruptions in the trucking industry, and severe shortages of microchips and certain plastics and metals have had a deleterious impact on healthcare organizations’ supply chains with critical medical supplies running low or being unavailable.

As an accounting management partner to several healthcare organizations, Lavoie CPA has found that the following methods can help hospitals avoid crisis mode as they weather these difficult times.

Find Ways to Streamline Payments from Patients & Insurers

While revenue generation is crucial, a mistake commonly made by healthcare organizations of all types is placing too much emphasis on revenue fluctuations rather than cash flows.

The cash flow statement is one of the four financial reports that accounting departments and outsourced accounting firms provide to management. It analyzes how effectively an organization collects cash proximal to how much goes out for operating expenses, as well as major investments like equipment and real estate. 

Expenses can be incurred but not paid, and revenue can be generated but not yet collected. The cash flow statement clarifies how much cash is actually being received. More advanced cash flow analytics can provide a breakdown of how quickly cash is received in the average reporting period.

Healthcare organizations frequently face delays and staggering in cash collection due to inherently onerous billing practices, delayed processing of payments, and negotiations with both patients and payers like insurance companies. 

The pandemic created additional issues in individual insurance coverage, with both policy changes and the “great resignation” causing millions of Americans to experience last-minute changes in coverage, needing to go on Medicaid due to childcare or joblessness, increased denials from both private and government payers are compounding the cash flow problems experienced by healthcare organizations nationwide.

By closely analyzing cash flows on both lateral and micro levels, hospital administrators can determine where shortfalls lie in the current billing and payment systems and how they can be addressed. Training and skills updates for the billing department or new software can be the answer, if not a thorough examination of billing practices and departmental efficiency.

Assess Administrative Processes & Procedures to Address Inefficiencies

While the billing and accounting departments are often the first places a healthcare administrator will look when addressing cash flow issues, they aren’t the only departments that could have outdated infrastructure or staffing inefficiency.

52% of healthcare administrators state that COVID-19 caused their organizations to adopt new processes, including the creation of new positions or departments, that they expect to maintain after the pandemic concludes.

Poorly run departments, constrained human resources, and inefficient business processes contribute heavily to organizational financial waste. By thoroughly examining each department and division, unnecessary procedures, and duplicate positions can be eliminated or realigned to new posts that provide greater efficacy. Administrative processes that create waste may need to be simplified or modernized, or made compliant with healthcare and technological regulations if the organization is being repeatedly fined.

Renegotiate & Seek Agreements With Vendors to Save on Supply Costs

Supply chain squeezes are affecting the healthcare industry as a whole, with numerous hospitals across America completely lacking IV bags and other key medical supplies needed to care for patients. Worldwide microchip shortages have also increased the prices of computers and peripherals, which affects both medical devices and back-office operations.

While this puts healthcare organizations at a disadvantage in vendor negotiations, agreements can still be negotiated to get through this crisis if the organization has had a long and thriving relationship with the vendor. They may provide a temporary or provisional discount depending on what is needed. If they take advantage of the leverage they currently have, finding new vendors can provide immense cost savings.

For supplies that are less critical to have on hand, the purchasing department can take more time to contact multiple vendors to find the best deals.

Seek Opportunities to Increase Revenues

Cost-cutting is often the first method that managers turn to in times of crisis. However, medical supplies are seriously needed despite supply chain problems and cutting hours for healthcare workers leads to both higher turnover and poorer patient outcomes.

Some costs can be cut without harming the organization’s long-term viability if inefficiencies are addressed. But not all financial crises will be ameliorated by cutting costs alone. New revenue sources should also be considered.

By approaching the financial crisis in terms of increasing revenue, what are opportunities that best fit your healthcare organization, with the constraints of the pandemic in mind? Start with allocating more resources to following up on denied claims. After billing department issues have been addressed, insurers may have denied claims in error or proper appeals for medical necessity can be made.

Even as more employers shift to hybrid or fully remote operations, medical benefits can go beyond medical and dental coverage. Hospitals and primary care practices can bring wellness programs directly to workplaces, creating a new revenue stream for the organization while the employer provides a benefit that attracts and retains quality talent. 

Nonprofit hospitals and clinics have the ability to appeal for individual, corporate, and estate donations. With fundraiser balls and other live events being less viable during the pandemic, hosting livestreams and working with influencers and other digital forms of fundraising and community outreach can provide additional income.

Finding new ways to generate revenue can endure after the pandemic has passed and serve as a springboard for thriving and growing as an organization.

Healthcare Financial Assistance from Lavoie CPA

Lavoie CPA focuses on financial technology and business process solution assessments. As an outsourced accounting partner, Lavoie CPA can deliver value where internal accounting departments often fall short. We offer interim and project-based services for your cloud-based accounting needs and aim to address the big picture rather than just one process. 

Contact us today to set up a healthcare organization financial assessment with Lavoie CPA.

Top Private Equity Accounting Mistakes & How To Avoid Them

Top Private Equity Accounting Mistakes & How To Avoid Them

Accounting is one of the most important ingredients of success for private equity firms large and small. 

When accounting is optimized for the best practices of private equity, it becomes an additional catalyst for success. On the other hand, if accounting is not done properly based on the unique aspects of a private equity firm, the results can seriously hinder performance.

In order for private equity accounting to be a catalyst for success, it needs to be competent and actually bring value in several key areas including:

  • Leveraging next-generation automated accounting technologies to enable scale
  • Seizing any and all opportunities to put in place real-time accounting reporting
  • Extracting value from accounting practices to support strategic growth 

While the goals for private equity accounting teams are clear, reaching them can prove challenging. In this article, we want to take a closer look at a few of the most common accounting mistakes made by private equity firms and how those mistakes can be prevented.

3 Private Equity Accounting Mistakes & How To Avoid Them

1. Failure To Scale Accounting Systems

One of the primary accounting mistakes made by private equity firms is the continued use of manual accounting processes while trying to scale growth. If your accounting team is spending most of their time manually performing tasks, the growth of your portfolio companies will be hindered.

The key to avoiding the failure to scale accounting systems is by implementing clearly defined workflows across intradepartmental teams, which are backed by automated accounting technologies. 

There is an increasing number of accounting software-as-a-service (SaaS) platforms covering a wide range of accounting functions. It can be helpful for private equity firms to consult with qualified accounting SaaS experts to help build an ecosystem of these platforms for your firm. 

This accounting SaaS ecosystem will bring automation and scale to the accounting operations across your portfolio. Instead of hindering growth, this automation will help scale and empower your firm’s growth.

2. Making Key Decisions Based on a Lack of Real-Time Information

Private equity firm principals and partners need to have the most up-to-date accounting data as possible. 

Prior to the entrance of SaaS accounting platforms, private equity leaders had to rely heavily on the CFO for the pulse on the accounting state of affairs. And often, the CFO themselves did not have the most up-to-date accounting reports. With the introduction of an automated accounting software ecosystem we previously discussed, it is now possible for all leaders of the firm to have access to real-time accounting data. 

This real-time view of accounting reporting and performance is a game-changer for the private equity industry. Leaders of private equity firms can now make the most informed decisions possible about their portfolio companies. 

Often events can unfold rapidly in the mergers and acquisitions world, and vital decisions about the future of a given portfolio company need to be made quickly. In these situations, the old method of having to wait weeks for accounting data to be compiled is a thing of the past. With the current software ecosystems properly implemented, private equity leaders have the key information they need in real-time to make important decisions.

It is imperative that CFOs and accounting leaders avoid the mistake of allowing delays in their accounting reporting systems due to outdated technologies and processes. If these delays aren’t remedied, the leaders of these firms could end up making poor strategic decisions about their portfolio companies and that could prove very costly. 

In order to ensure you are taking advantage of all the opportunities to put in place real-time accounting reporting systems, it is helpful to partner with a consultant that has the ability to understand your unique portfolio and where those opportunities exist. Doing so will result in tremendous benefits for the leaders of your firm when it comes time to make big decisions about the future.

3. Mismatched CFOs

Selecting a CFO for your private equity firm is one of the most important decisions you will make. One of the key roles your CFO should play is in knowing how to use accounting practices to aid rapid growth.

As we discussed earlier, many private equity firms have a growth focus. The mistake that is commonly made is when a private equity firm hires a CFO who does not have robust experience in running the accounting practice to maximize the growth of the organization. 

The reality is many CFOs come from backgrounds that are focused more on accounting for mature companies. In these contexts, the CFOs have not spent enough time in a high-growth environment. They may be very capable CFOs—even coming from very large enterprises. However, if they have not had experience in running a successful accounting operation towards growth, they will likely be unqualified as the CFO of a private equity firm. 

In order to avoid these mistakes, private equity firm leaders should search for CFOs with demonstrated experience in creating and running accounting systems for high-growth companies. 

For CFOs to be successful with accounting practices in a growth environment, they need to have the ability to bring meaningful strategic guidance to the leaders of the firm. This ability to bring guidance can only come from significant past experiences in running the accounting operations in sometimes volatile and chaotic growth environments.

These CFOs are not expecting to show up on day one and have tightly organized systems in place. On the contrary, they have had past experiences taking a somewhat disorganized, rapid growth situation and cleaning up the accounting operations—streamlining and scaling them in order to foster further growth.

The best way to find a CFO who could be a potential fit for your private equity firm is to ask them during the interview process what strategic growth-related guidance they have given from an accounting perspective in the past at their previous organizations.

Let Accounting Help Grow Your Private Equity Firm

At a big-picture level, the accounting practice for your private equity firm needs to be just as growth-focused as the rest of the firm. CFOs with a maintenance-only mindset who lack the ability to bring strategic accounting guidance to the table when it comes to growth, will not let your firm realize its full potential. 

Similarly, sticking with outdated accounting technologies and processes will hinder the growth of your firm as you try to scale your portfolio. Not only should you seek the assistance of a qualified consultant to help you select and implement an accounting SaaS ecosystem, you should also have this advisor help you bring real-time accounting reporting to all the leaders of your firm. 

In the midst of rapid growth, it can be difficult to find the time and resources to take the appropriate steps you need to take to ensure the success of your accounting operation. That is why it can be helpful to find a consultant you can trust to aid you in these important initiatives for the future success of your firm. 

To learn more about how Lavoie can help your private equity firm avoid making the mistakes in this article, contact us online or give us a call at 704-481-6699 today.

Lavoie CPA & Jirav Launch Strategic Partnership

Lavoie CPA & Jirav Launch Strategic Partnership

Lavoie CPA & Jirav Launch Strategic Partnership

Lavoie CPA has added Jirav, an all-in-one business planning software for small and medium companies, to its lineup of preferred cloud solutions for the accounting profession.

At Lavoie CPA, we leverage accounting as a service and cloud-based technology to streamline clients’ accounting, payroll, and analytical processes. Implementing software solutions is critical for improving financial reporting and making businesses scalable over the long term. We work closely with clients to identify the right software solution that supports strategic objectives while making operations more efficient and effective.

Through this partnership, Lavoie CPA and Jirav aim to give clients a competitive edge in their accounting and administrative processes.

Jirav is an all-in-one financial planning and analysis solution that maximizes the collaborative value of forecasting, budgeting, reporting, and analytics so leaders can drive their businesses forward with confidence and speed.

Jirav integrates natively with leading accounting or ERP platforms such as Xero, Quickbooks, NetSuite, and Sage Intacct. With Jirav, you are up and running your forecasts using templates in minutes.

This powerful business planning software helps companies:

  • Maximize Growth: Model the outcomes of investing in sales, marketing, or other areas. Scenario test to optimize your growth strategy and track results to plan.
  • Operate With Financial Excellence: A key to growth is having a plan and measuring against it. Manage detailed KPIs and collaborate with owners to keep the business on track.
  • Focus on Strategy: Finance teams at growth companies lose too much time to spreadsheets and generating reports. Automate the tasks and focus on being strategic.

Contact slavoie@lavoiepllc.com to request a demo today. To learn more about the platform, please visit https://www.jirav.com/.

About Lavoie CPA

Founded in 2009, Lavoie has served as a reliable Charlotte CPA firm that specializes in strategic financial and operational planning for businesses of all sizes. By delivering state-of-the-art strategic support, Lavoie’s clients can focus on growing their business and soar to the next level of greatness. In addition to providing customized solutions for clients, Lavoie prioritizes social justice issues and is extremely involved in the local Charlotte community.

About Jirav

Jirav is a comprehensive business planning solution for small and medium companies that maximizes the collaborative value of forecasting, budgeting, reporting, and analytics so leaders can drive their businesses forward with confidence and speed. The all-in-one financial planning and analysis software offers faster implementation and a more intuitive interface, allowing finance leaders to build financial models in hours (not days) and generate financial reports in minutes (not hours). Jirav is headquartered in San Francisco with offices and teams across the world including Seattle, Austin, and Poland. Learn more at www.jirav.com.