2007 June Edition

A Message from Doris:

A good portion of the DMC client base is concentrated in the service based industries, particularly Architectural, Engineering and Construction (AEC) industries. Although we do deeply touch specialty projects involving CRM implementations and inventory distribution/sales, we are finding that integrated solutions for our core client industries remain non-competitive where the client has little choice. We are not saying the few remaining choices are not good, but it leaves the client in a bit of a money pickle should they be caught in the fallout of a merger/acquisition strategy of a dominating accounting software manufacturer. What I mean is that acquisition strategy consolidates competing products into one pool owned by one manufacturer. The resulting consolidation may end in one single new product, leaving stranded many users who in the short term over 3-5 years are faced with an upgrade they did not anticipate. In my mind, a 3-5 year window is too short to strategize fully in regards to upgrading / switching / migrating to new products.

Integrated can be a misused term in a marketing context when it comes to solving accounting problems for businesses.

"Integrated accounting software" in the case of AEC industries are developed to meet a vertical need for a line of business that general accounting software simply is not designed to do. It is designed to take the place of using several non- integrated solutions like Excel for reporting and MS Project for managing and QuickBooks for accounting. It takes extensive research and development to become a new entrant into the integrated accounting market; once developed you then have to enter into the market as an unknown, a formidable task in a legacy industry with just a few remaining players.

The user must understand the intricacies and value the reasons why integrated software goes beyond what entry level softwares purport to solve. For instance, in construction, AIA billing may be a must, cost codes are used as a standard for bidding and tracking jobs, and this goes well beyond the ability of entry level products to capture job costs and then appropriately report against it.

Another example would be in Engineering, where phase/task billing and tracking against project plans are standards now that need to be delivered to the new client upon demand. The newest demand on integrated security to properly secure vital banking, employee and client information is just the simplest of points found and solved for with these types of solutions.

DMC Accounting + Technology sponsors and chairs a variety of non-profit accounting user groups, and we try when possible to present and address the software manufacturers with challenges posed to the user. We do and have contacted manufacturers at a variety of levels to assist with messaging and supporting their client base. In my opinion, the accounting software solutions market in AEC has significantly shrunk in the past 5-7 years, the pricing of replacement products is frighteningly expensive and tied tightly into the roller coaster of Microsoft. It seems that Microsoft is endlessly announcing their lack of support or ultimate no support for underlying OS, SQL internet standards and Outlook versions that all result in change, change, and more change. Change for change alone, is not good.

I would hope that a slow down in buying will open the market up again to more options, thus pushing down the price, increasing the options, improving the quality, and in the end, would result in happier customers. - Doris

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Cash Flow Forecasting by John K. Pidgeon

Is it possible to have strong sales yet have very little cash in the bank? Simply put, yes! Another important question to answer is “Does increased sales always result in increased cash at the time of sale?” The answer to this may appear obvious at first, but upon further investigation, may be unclear depending on the type of cash collection process (if any) in place. Financial budgets and forecasts tend to be “cut in stone” for most companies. That is, management either met their expectations or is trying to predict the future. Cash flow forecasting, on the other hand, is a tool that can be modified for changing circumstances and, by nature, is flexible enough to steer the company in a more desirable direction. As its name implies, it is based on cash flow, the ins and outs of cash.

There are two primary areas of cash flow (in addition to debt and equity cash flow) that most common organizations have to deal with: sales and purchases, in particular, accounts receivable (sales on credit) and accounts payable (purchases on credit).

When accounts receivables increase, it is important to understand that cash flow decreases. That is, when looked at in reverse, as accounts receivables are collected or reduced, cash flow increases. So, just because sales are made, does not mean cash is in the bank.

Accounts payable is the opposite of accounts receivable in that when accounts payables increase, cash flow increases, and when accounts payables decrease, cash flow decreases. Most companies understand this theory that when purchases are made on credit, their cash does not decrease until the check is cut some time later.

Unlike a general financial budget which deals primarily in historical facts and estimates of the future based on those facts and current trends, cash flow forecasting will provide timely guidance for managers in order to quickly respond to changing business environments to both seize opportunities and avert disaster. Expert cash flow training on proper handling of accounts receivables (and bad debt) and accounts payables is one of DMC Accounting + Technology’s primary focuses.

DMC can help guide your company and staff to gain a better understanding of the true meaning and benefits of cash flow forecasting.

This lag time allows companies to maintain and adjust cash balances to meet purchasing priorities and other important expenses such as payroll.

Forecasting cash flow for both sales and purchases can be a daunting task for most companies. In fact, most companies rarely take full advantage of this indispensable tool.

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Employee Recognition:

DMC Accounting + Technology recognizes the following employers for their excellence:

Rebecca Fritsch

Rebecca is a very talented employee, who does double duty for us. In her role as Project Manager, she serves as the liaison between our clients and our employees, and is responsible for timely billing, collections, and most importantly, all DMC contracts. In her Client Work, she has performed many duties from data entry to month end reviews, and is currently involved in DMC’s Vision training seminars.

Rebecca came to us from the DC area, where she gained much of her expertise in government contracting, and is a Veteran, having served her time in the Navy. We are extremely glad to have her with us now, and have high hopes for her future.

Welcome to our newest Employee:

Guillaume Deflers

Guillaume has recently joined our staff as our new Marketing Coordinator.

Guillaume is a French native and has studied all around the world. He is a recent MBA graduate of Clark University, with a dual concentration in Management and Marketing.

On his first days, he was handed many assignments, and not only has he completed most of them, but has also provided new insights into potential marketing and advertising areas.

Among his initial projects he was asked to set up two DMC User Group Meetings which are happening this month, and work on a telephone campaign which is ongoing everyday. He has been a welcome addition to our staff.

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