Tech Connect: Problem solving using technology

Problem solving is something we all have to do. I Googled the topic to see how much interest there is in it and got 78,600,000 hits.

In a 2013 article, Jason Bramwell discussed his research on the use of technology in small businesses. He found that only 51 percent of small business owners use modern technology for accounting. (I find this truly amazing.)

The 51 percent have a built-in advantage to better understand and manage their businesses. In today's connected business environment, this 49 percent will begin to disappear.

The old saying time is money has never been more true than today. Companies now can exchange purchase orders and invoices instantly instead of over many days.

This, of course, allows both vendors and clients to help their respective cash flows. An invoice sent through the postal system will take at least two to three days longer than using email. Intuitively you can see the potential for improving your cash flow.

One of the first steps in problem solving is defining the problem. Technology assists in this step because the data can be gathered out of your computerized accounting system, assuming you are using one. Using the software's standard reports or customized reports, you quickly can organize the data for analysis.

One of the most unappreciated steps in problem solving is determining what the problem is and is not. Again, having an accessible database containing your business data is key. It allows you to easily perform is/is not tests on your data. You then can start to create a clear definition of the problem.

Here is a real situation: Assume that the value of your accounts receivable is climbing, but you don't know why. Using a standard accounts receivable aging report provided by your computerized accounting system, you can quickly identify the accounts that represent a high percentage of the value of the past due. (Remember the Pareto principle - 80 percent of the effects come from 20 percent of the causes?)

This would entail a great deal of work in a manual system, which means increased costs.

Speaking of customers, technology is extremely helpful in the management of your sales function. In recent years, there has been a growing interest in customer relations management (CRM) software.

CRM is a database containing detailed information about your customers, and there are many products available to use for your CRM.

However, the sophisticated one-size-fits-all packages are usually way too detailed and complex for a typical small business. Instead, I recommend that you determine what information regarding your customers you want to maintain, then investigate the tools within your accounting system to find what you need.

Most accounting systems allow for customized reports. Therefore, you or your accountant can put together the reports you want.

If you or your accountant do not have the skills or the time to take all this on, find some local help through the Chamber of Commerce, SCORE, or other such organizations. They can usually connect you with the help you need.

As Nike tells us, 'Just do it.”

' Mike McKay is general manager and co-founder of Keystone IT; mike@keystoneit.com