Fiducial | We help your business grow and be profitable.

by Stephen Parezo

December 27, 2004—Fiducial has formed a new strategic alliance with Sageworks, Inc. for their award winning ProfitCents software that has been reaping dividends since it was introduced to the Fiducial network.

"We're absolutely excited about the opportunity to work with Fiducial franchisees and company offices," said Scott Ogle, chief operating officer of Sageworks. The Raleigh, NC company is a web-based software developer of financial analysis tools for financial professionals. "Our relationship with Fiducial has provided a way for us to introduce ProfitCents service to Fiducial professionals and create a forum in which they can share best practices on using the application effectively."

ProfitCents is designed to allow accountants to quickly add value in client relationships, translating financial statements into easily understood terms so clients can get a handle on their financials. The ProfitCents report, with its in-depth analyses, fosters discussions with clients and opens up doors for counseling opportunities.

The key to the report's success, Ogle says, is its design that's quick and easy for the client to understand.

"Instead of an accountant spending time in front of the computer they can meet with clients because ProfitCents is not just regurgitating numbers back into a report," he said. "Its insights are put into a plain English write-up, not a table of numbers but a written commentary."

Franchisees are already benefiting from using ProfitCents in several ways, according to Joe Crossney, Fiducial's director of systems support and development.

"First, they were able to purchase this software tool for a nice discount if they ordered prior to the end of November," said Crossney. "Second, they will benefit because the tool really allows for counseling and a few of our franchisees are now using it and have had 'rave' reviews. The franchisees and our company owned offices were asking for industry data for their small business clients and this tool provides it."

By popular demand

Crossney noted that ProfitCents will definitely help clients by comparing their income and financial data to other like businesses in their industries.

For example, a restaurant will receive information comparing liquidity, profits and profit margin, sales, borrowing, assets and employees' data with other businesses in their industry. The tool actually provides ratings of one star to five stars for each of these categories, again comparing the individual business client to their industry.

"Our clients have been asking for this data for some time," he said.

Bill Woodcock, a Fiducial franchisee in Renton, WA, was ahead of the curve when it came to using ProfitCents. He says it's made a difference in his office.

"It allows me to benchmark my businesses and all the businesses appreciate it," said Woodcock. "They like to know how they're doing versus other restaurants and manufacturers. It provides a very simple tool for giving the business kind of a report card based on various financial ratios. Most businesses can clearly understand that if they get five stars they've done well but if they get one star they've done poorly."

Utilizing ProfitCents to analyze data from one of his small business clients through the first 10 months of 2004 compared to the same time in 2003, Woodcock pointed out that not only does this software have the flexibility to generate specific reports but it explains the analysis so clients can grasp it right away. Best of all, there's no waiting for lengthy reports.

Fiducial's Larry Recor uses ProfitCents as a consulting tool at his office in Boonville, NY. He says the user-friendly format spells out details for non-financial business owners so they understand exactly what's being discussed such as if their inventory or accounts receivables are too high. Clients may have difficulty following more traditional reports but not with those generated by ProfitCents, which tells them a lot more about their business by addressing a number of critical areas.

"It lets them know if they are doing as well as they should be and how are they really doing," Recor said.

Pinpointing troublesome areas

ProfitCents has made a difference for Recor's counseling efforts because when clients are shown a more traditional financial statement the message doesn't really hit home. "But with all the graphics and industry comparisons it makes sense to them," he said. "You are more easily able to explain to them what their condition is."

Usually when clients look over their financial statements they think they're doing just fine. ProfitCents, however, pinpoints areas where entrepreneurs need to make some changes.

A construction company, for instance, was presented with a report that told them their gross profit percentage was actually too high compared with the rest of the industry. This explained why they had trouble getting sales. Thanks to ProfitCents, Recor determined that the problem area was a revenue issue since the company's services were overpriced. After the client lowered his prices and became more competitive "he has more work than he knows what to do with."

In Lawrenceville, NJ, Fiducial franchisee Tom Judge has also put ProfitCents to good use on the consulting side of his business.

"It adds a great dimension when talking to clients because it gets down into some of the nitty gritty of the financials," said Judge. "It tells them how they're doing and gives them ideas on how to correct a problem."

Judge finds that the software gives him much more credibility with clients as far as producing a report that lends itself "to show that we're the experts." None of the dozen clients he's shown ProfitCents to have ever seen that kind of report before.

"It's one thing to give a client monthly financials but this just adds a whole other point of view," he said. "And when we go and meet with them it adds some meat to the discussion. It's written in a way that you can actually have the report showing the clients 'see what we're saying here' and everything on it allows me to talk to client in more depth before the light clicks on and the client says 'I've never thought of it that way.' "

ProfitCents has even helped spawn new ideas, according to Judge.

One of his clients that operates a $5 million manufacturing company had a financial statement that looked very strong on paper with all the indicators pointing upwards. Still, when Tom used the software to analyze working capital and financing data, he discovered some weak points—payables were stretched out a little more than they should and that could hurt the client's credit rating.

The analysis revealed that the owner had never taken discounts and was paying interest, thinking it was less expensive to use his line of credit and not take the discount. But this made his credit slower than it should be. Armed with these facts, the client used Tom's recommendations to improve his operation in those areas and has since boosted his credit rating.

"By taking the discount, it more than compensated for any interest he was paying on his line of credit," Judge said.

Stephen Parezo is the Media Manager for Fiducial

Whatever your small business needs, your Fiducial tax and financial professional can analyze your situation and recommend an appropriate action plan. To locate a Fiducial office nearest you on fiducial.com, see the Zip Code Locator located in the upper right hand corner of the page. Do you have a particular topic that we should be writing about that can help your business? Please send your suggestions to: stephen.parezo@fiducial.com.