Many years ago I worked with the accounting department of a semiconductor manufacturing equipment company. The board wanted the accounting team to give them a tool to get better information on how they could see the impact of different choices they were facing with regard to inventory levels.
As an example, if they invested in more inventory how would that impact the balance sheet and income statement? If they aimed at inventory turns of 1% more or less, how would that change financials? Back in 2000, getting information like that to display meant that I had to employ my programming skills to pull data out of the accounting system and feed it to a graphics package.
That was the start of my interest in analytics and reporting, an interest that grew until I built a business specifically around transforming QuickBooks data into actionable information. And I invest my energy into our industry by providing training to other accountants and bookkeepers just like you. For example, this year I'll be teaching "Introduction to Power BI" at this year's Scaling New Heights conference in June in Orlando. For more information on my session and the other more than 100 sessions that will be offered, you can view the training schedule here.
What Is Power BI?
Power BI is an enterprise business intelligence platform, This scalable platform allows you to connect to all of your data sources with the scale to analyze, share, and promote insights across your business while retaining data accuracy, consistency, and security.
What Does Power BI Do?
Today, the same kind of information that used to require serious programming skills can be generated with ZERO programming knowledge by using Power BI. Of course, it’s important to know that Microsoft didn’t create Power BI overnight but has been at this for decades, and it shows!
Simply put (and as Microsoft describes it), Power BI bridges the gap between data and decision-making.
In the enterprise software world, an organization known as Gartner has made a business out of taking a deep dive into various solutions areas and providing a detailed analysis at a cost. Their analysis is widely recognized as being the "gold standard" for understanding what the best solutions are for a given market. In Gartner's analysis of Analytics and Business Intelligence Platforms, Power BI has been the leader for many years.
Why do you need to learn Power BI?
Gartner’s full report gives a more detailed answer to why Microsoft has been leading the pack for years, so I’ll leave that to them, but let me call out a few key things to think about.
1. Microsoft offers a breadth of valuable applications.
First, Microsoft doesn’t just own your favorite tool (Excel) but it also owns databases, enterprise reporting tools embedded into thousands of applications, and multiple accounting applications that have been a part of its organization for a long time. The synergy of having candid feedback from Excel users, application developers and mid-tier accounting software clients cannot be understated.
2. Your clients may outgrow QuickBooks.
Second, since a good many of The Woodard Report readers are working with QuickBooks right now, I’d be remiss to not remind readers that for all the hype you might hear from Intuit, QuickBooks will be outgrown at some point by a lot of businesses.
I hope it is your clients that outgrow QuickBooks because of your excellent advice! And if that’s the case, perhaps you should begin considering what your clients might do as they grow out of their existing solutions.
I wrote a previous article that the essence of accounting is reporting. Sure, we may use a system for getting information gathered, but validating that input and then interpreting that information - THAT is accounting.
While most accounting applications provide profit and loss statements (with lots of options!) most of them make underlying assumptions about how the information is input. Even if your client never outgrows QuickBooks, if you decide that Intuit’s offerings are not a fit for your firm, wouldn’t it be nice to have the opportunity for some consistency in your reporting even if you move to a new application?
I’ve grown to prefer to generate most reports from basic general ledger information rather than a software vendor's pre-built reports. Sure, it can save some time to pull a profit and loss inside the application menu. However, if you are constantly exporting to Excel and hiding rows or columns or relabeling descriptions to help a business owner get an understanding of what’s going on in their business - is that report really serving your needs? If you’re taking the detailed financials and manually calculating standard ratios and other KPIs every month, then is that data gathering tool really working for you?
One major point Intuit has talked about for years when promoting QuickBooks Online was the concept of connected applications. If your customer has information in both QuickBooks and some other application, are you already correlating the information between these applications manually?
3. Power BI allows you to customize reports you need with the data you need.
Third, Intuit developers are great, but they are focused on building a generic set of reports that will give the largest group of users the most information possible. Their pre-built reports simply can't take into consideration the unique way your client has found to run their business, but you CAN do that.
What they can’t do, but you can, is to integrate the information from a 3rd party system directly into a report. One example of this is an external application that tracks the number of visits to a website. Wouldn’t it be great to see how the investment in advertising impacts the number of people hitting the site and, in turn, revenue?
I hope to see you at Scaling New Heights (June 19-22, 2022) to teach you about the many ways you can start writing your own reports using the market-leading solution for delivering business intelligence.
NOTE: Following the publication of this article, Intuit announced that Smart Reporting by Fathom would no longer be included as part of the QuickBooks Online Advanced subscription effective 8/1/2022. The reporting world continues to evolve and I will continue to watch it for you.