1. "It doesn’t matter if an asset is cash or an asset bought with cash, what defines an asset is value. Basically, if it has value, it’s an asset.” [150 highlighters]
   
2. "Accounting, like my silverware drawer, is simply a way to organize information to tell a meaningful story and make better informed business decisions.” [145 highlighters]
   
3. “Equity represents the owner’s share of the assets once all of the liabilities have been met. The amount of equity is calculated as the leftover amount, or residual.” [124 highlighters]
   
4. “You must always have two effects on the storyboard: both effects may be increases, both may be decreases, or one an increase and one a decrease." [105 highlighters]
   
5. “Assets are valuable, we can measure what they cost us, and they will bring benefits to our business as we use them in the future. Assets can be used directly or indirectly by the business to earn money." [98 highlighters]
   

What was your favourite snippet?

- Mark Robilliard, Color Accounting International

"SAM is an important competitive advantage.  A competitive advantage that creates barriers to entry against competitors and barriers to exit for strategic accounts."

Peter Browne.

You may or may not like SAM. And to be clear, SAM’s definitely not for everyone. But SAM just might be what you’re looking for.

This morning while having breakfast, I was contemplating the Color Accounting workshop I ran yesterday for an important client of our strategic business partner Bennelong Group International.

Bennelong specialize in Strategic Account Management (SAM) and have been implementing SAM with the Sales Team (and other divisions) of this client. Even though it’s only very early days, the client team has already had significant success and increased financial performance which has been documented in a recently published book by Bennelong gurus, Peter Browne and Gary Peacock, Managing B2B customers you can’t afford to lose – how to create joint value with your strategic accounts. (Full disclosure: we are mentioned favourably in the book).

Is SAM for us? That’s for you to decide. If your results (revenue, margins and your perceived value) are trending ‘south’ year-on-year and your relationships with your key accounts tend to be transactional, price-driven and antagonistic, then that is unlikely to be a sustainable business model.

The single biggest problem in business is, staying with your previously successful business model … one year too long.
 - Lew Platt (CEO Hewlett Packard)

So let’s meet this SAM. In Peter and Gary’s own words, it is... the process of selecting a portfolio of strategic customers and developing those customers, over the long-term, to drive financial performance and shape strategy. SAM helps build strategic relationships, understand customers deeply and align your capabilities with customer needs to create long-term joint value.

SAM is not for the faint-hearted and certainly not a quick-fix for companies being beaten up on price by their major accounts. It requires a seismic shift in thinking, for the sales team AND for everyone from the CEO down. It requires a rethink of current strategy and practices and the ongoing direct involvement of the executive. Internal silos will need to be broken down and resources from many disciplines brought to bear to engage at this level. But the results can be astonishing with higher revenue and margins.

As part of the SAM implementation, we run a financial fluency workshop for the SAM team, which will include the CEO, the CFO, the Sales Director and team and the other divisions that are part of the value-adding process (for example, finance and after sales support). The success of the SAM process is measured in financial terms for both the company and their key account. Consequently, the SAM team needs to be financially literate and so they can communicate in a language that is compelling to the senior decision makers and influencers - financial language. Being one of the most common areas of weakness in Account Managers and the broader SAM teams, this is where we come in with our unique Color Accounting tools and educational technology, to help you improve your financial performance.

If you are seriously thinking about differentiating yourself from your competitors, in the eyes of your key accounts, I implore you to research SAM (see links below). It might be just what you’ve been looking for.

Apart from the Bennelong book already mentioned, there is also a truly excellent Harvard Business Review article called Three rules for Making a Company Truly Great by Michael. E Raynor and Mumtaz Ahmed. In this article, the authors provide statistically validated ‘rules’ for exceptional corporate results over the long term. In their words, “With few exceptions, the best companies behave as though these principles guide them through all their important decisions, from acquisitions to diversification to resource allocation to pricing… When Income is declining, for example, it can be tempting to make the company’s results look better by slashing assets and investment to reduce costs. But great companies typically accept higher costs as the price of excellence, putting significant resources, over long periods of time, into creating non-price value and generating higher revenue.”

Their first rule: Better before cheaper (it’s best to compete on differentiators other than price).

Raynor and Ahmed used the single ratio of Return On Assets (ROA) for their financial performance measure – a metric that, in their words, ‘reflects strong, stable performance’. It also goes to one of the fundamental truisms of business: the business acquires assets for the purpose of generating profits, so the best measure of success is how efficient and effective that business is in using its assets for this purpose over time.

In an upcoming blog, I will focus on ROA as a performance measure.

 - Mark Robilliard, Color Accounting International

ps. the workshop went great.

References and recommendations:

Strategic Account Management with Bennelong Group International:
http://bit.ly/1zx4ZJs

Book: Managing B2B customers you can’t afford to lose:
http://bit.ly/1AEQSDf

Harvard Business Review (Apr 2013) Three rules for Making a Company Truly Great:
http://bit.ly/1nUODaN

Link: This article shows how combining capabilities and opportunities create growth. SAM is a great vehicle to do this:
http://dupress.com/articles/growth-expanding-universe-choice/

I recently had the pleasure of a meeting over good coffee (Campos) with Stephen Harrison, the CEO of the Global Accounting Alliance in Sydney. The GAA has almost 800,000 members in over 180 countries. It is made up of 11 of the world's leading accounting institutes, brought together to promote quality services, share information and collaborate on important international issues.

We had a very enjoyable discussion about the challenges before the profession, and especially in attracting and serving accounting students. We talked about some of the successes we have been having with this in the US and more notably in South Africa where the government is augmenting their accounting curricula with Color Accounting.

During our discussion, Stephen reminded me of a workshop in Sydney some years earlier in which he came along at my invitation as an observer. Time pressures meant that he could only come to the beginning and the end of the workshop. In truth, he was probably just coming along as a favour to me. Anyway, he kindly offered to recount his experiences that day for others to share.

"Some years ago I attended a presentation of Color Accounting. It was to staff of an insurance company.

They were young and old and from many parts of the company. The one common characteristic was that they knew little about accounting, and certainly could not read or understand financial statements.

The presentation lasted a day. By the end of the day most if not all present were able to read and understand the company’s financial statements. They were able to ask insightful questions.

It was a most impressive demonstration of the power of Color Accounting to make accounting understandable and dramatically improve financial literacy in a very short period of time. It was also fun for all involved!

I enjoy recounting this experience whenever relevant as I hope many, many others can benefit from this most instructive tool."

- Mark Robilliard, Color Accounting International

“I see the financial statements; but I have no idea what they mean!” How often have we heard that refrain? First Nations have very complex financial statements according to Chartered Accountant, Sam Weller, licensed Solution Provider at Accounting Comes Alive: “The full statements are often 60-100 pages. On top of the normal taxation and service functions of a local government, there are often community assets like housing, business activities and grant administration programs. Even trained finance professionals need to spend considerable time and brainpower to decipher the documents.”

Songhees First Nation CFO, Genny Bolyos had been charged with leading the Nation through the FNFMB certification process and had a dilemma. She needed to have a qualified audit committee made up of financially literate band members and although she had volunteers; they did not have the necessary level of financial literacy.

After speaking to someone who had done the “Colour Accounting” workshop she decided to contact Sam Weller, the workshop leader, who was already familiar with Songhees as a CESO volunteer. Accounting Comes Alive, the company which designed the courses, specializes in teaching people basic accounting using colours, shapes, a story board, and even sounds to let people discover for themselves, the five basic principles of accounting. The promise is that by grasping the accounting building blocks, the financial numbers will start to make sense to participants.

In February, Genny set up a day-long training session at the brand new Wellness Centre with two Councillors, two band members and 4 staff. “The training was fantastic” said Cllr. Karen Tunkara, “The way Sam taught the lessons was easy to understand and not bogged down in technical jargon. This will help our group, regarding the Nation’s financial position.” Audit committee member Perry Dick put it more succinctly: “Fun makes learning easier”. For CFO Genny, it was not the information about accounting that was new; but the common language that the workshop created: “I now have a framework and language that I can use to talk to Councillors and band members. I can see that we can all be on the same page now.”

“This will work for any individual or group that is interested in understanding their finances” says Sam Weller, “we are not training people to become book-keepers or accountants, we are letting them discover what accountants do, how they work and the language they use. After participating in the course they will be able to converse more comfortable and think more critically about financial issues, as well as make more-informed financial decisions.” 

- Sam Weller, Canada

It's always interesting to us, as to how someone first heard about Color Accounting, and their reaction to it. Here, Mark Samowitz (Johannesburg, South Africa) explains when that proverbial light bulb went off for him. It was New York City, and he reluctantly went along to the workshop that was to change his life.

First posted February 2014, by Jennifer Geier

Last Friday, 15 students and I started a 3-day journey into accounting. This program was for the School of International Service, so a majority of these students are seeking a career in the non-profit sector and will likely use financial statements for budgeting purposes. Because the class is 3 full days, the students earn 1 credit towards graduation.

The first hour of the first day is always pretty slow as we go through introductions but by the end of the day every student is quiet. After having posted 14 basic business transactions and diving into financials statements, they are always pretty tired. This silence used to make me nervous but I've realized that this lack of sound is because the students are thoroughly digesting the material. I dismissed class with the assignment to bring in some financials to analyze the following day. Students came to me after class asking why this isn't used as the accounting 101 curriculum? "Is accounting really this easy?"

The next morning, I asked my students, "How many of you taught someone accounting last night?" Three quarters of the students raise their hands. This wasn't a homework assignment, yet they were eager to share their learnings with their spouses, significant others, and even friends while they were at a bar. We jumped into Not For Profit Accounting and distinguished the differences between for profit and not for profit. We then went into case study questions about the Not For Profit entity, calculating Gross Profit Margin and substituting figures based on issues such as inventory loss, spoilage, theft, etc. After class, students came to me asking how to get this training at their places of employment, they had told their bosses about the program and they were eager to bring this skills training in house.

On the last day of class, we went through an exercise of government accounting, veracity analysis, and then we did personal finance. I had people record their assets and liabilities to calculate their net worth. The most interesting part is when we do their income statement and they see how little revenue is coming in and how expenses (even the small ones) can add up very quickly. Some people were shocked. They assumed their net worth was better but now that they could visually see the figures. I always have personal finance in these 3-day programs because good habits start at home, so if these students keep on top of their personal finances then this skill will translate into their professional realm.

The students completed an exam to test their skills and everyone passed with flying colors. The best part of this program is the ability to get people excited about numbers. Not only do they understand them but they are eager to learn more and this is sometimes the more powerful learning, the ability to instill this curiosity in the students.

I met with a program director at AU and he shared with me the feedback from the course Peter taught last October. It was the same course but with more emphasis on Social Enterprise. I want to share some of the feedback:

"AMAZING! The best course I have taken so far! I would recommend this class to everyone EVER."

"Even for someone with an accounting background this course was fantastic and a great refresher that also illuminated concepts I didn't understand before."

"This course was awesome! I have an MBA, and it wasn't until I took this course that I really understood Accounting. This class should be taught for longer than just a few days."

"Best course I've had at AU! I no longer hate/am afraid of accounting. I want more!"

"Amazing! Changed my perspective completely on Accounting. This is the best course I've ever taken. I felt like I got my money's worth. So thankful!"

First posted August 2013, by Jennifer Geier

Color Accounting: The Fast, Graphical Way to Learn Finance and Accounting

New York - Monday September 30, 2013

Washington, DC - Wednesday October 2, 2013

EARN 8 CPE CREDITS

The Color Accounting workshop teaches essential concepts of accounting through a revolutionary new approach.  While Color Accounting teaches accounting better than any other course, the ultimate learning objective is deeper, quicker finance and business literacy.

By the end of the course, students will not just know a new approach to understanding accounting, but also how to compile, read and analyze a balance sheet and income statement faster and more intuitively than ever expected.  Students will know how financial statements tell the story of a business, learning deep insights into the workings of business itself. The benefit is more options, smarter decisions and better business outcomes.

APPROACH
The Color Accounting workshop uses multi-sensory methods to engage the learner.  The result is rapid and permanent learning.  The workshop uses a three-dimensional model (the patented Color Accounting Framework) of how accounting and business work.  By working hands-on with this model the learners uncover concepts that often remain hidden.  Color is used deliberately and as part of a logical system to demonstrate relationships, not simply to “brighten things up.”

OPPORTUNITY TO EARN 8 CPE CREDITSREGISTER TODAY!
Price Per Person: $ 595

 (Class size is limited and classes often sell out so reserve your seat today)

New York, NY                                    Monday   September 30, 2013Venue to be announced                                                                              Washington, DC                                Wednesday  October 2, 2013

Venue to be announced

AGENDA
The Color Accounting workshop comprises of three modules:

Module 1: Context (90 minutes)

This introduction module sets the scene for the learner. It prepares them for the accelerated learning ahead, including the importance of ‘unlearning’ and letting go.  The students start to look at a business as a funding story, with distinct sources of funding and uses of funding, presented in a balanced picture. 

Module 2: Business Scenario (4 hours)

Module 2 draws on a realistic business scenario, which the students learn to literally account for.  By recording a series of carefully ordered business transactions the learners develop and use accounting as a business framework as they examine:
· The general journal
· The general ledger
· The accounting equation
· The balance sheet, income statement, cash flow statement, and statement of changes in equity
· Precise meaning of often misinterpreted terminology such as equity, margins, depreciation, double entry, duality, and accrual accounting.
· Other concepts are introduced as necessary, such as break-even, margins, EBITDA, GAAP, IFRS, asset valuation and income recognition.

Module 3: Application of Concepts (1-3 hours)

The learning capitulates with a case study of a business that has run into problems even while growing rapidly.  Students first develop a simple yet profound business narrative that the balance sheet and income statement tell us about the business.  They then do a financial analysis of the company, addressing business issues such as changes in borrowing, cash flow, marketing strategy, pricing and margins, and more.  The business in the case study is sometimes substituted for the real financial statements of the client organization.

First posted June 2013, by Peter Frampton

A new type of financial literacy course is proving to be a cost effective way of enabling business leaders to sharpen their business and leadership skills.

Traditional financial literacy courses emphasise financial jargon. They focus on the terms and acronyms used to talk about business performance. Terms like Return on Equity and EBITDA are defined, but – it is argued – ‘float’ without the anchor of an integrated business model.

The new-format financial literacy course begins lower and ends higher than the typical genre of finance for non-financial manager seminar.

By starting with the fundamentals of accounting literacy (that many financial literacy courses step over), the new type of course in the end goes further. It goes beyond finance by developing a holistic model of how business works. The course reveals a graphical accounting-based value-model of business.

The result is that the business manager sees every decision that they make in the light of a value cycle. Everything that happens in the business is either generating value or destroying value.

The new genre of financial literacy course achieves a greater return on course-time and course-cost than many executive education courses and traditional financial literacy courses. It does this because it:

• Provides more concentrated learning than longer-format college programs, whilst retaining the business-breadth of such courses.
• Frames all a manager’s behaviours in a value model. Everything the manager does is clearly seen for its effect on profit. All behaviours become profit-behaviours.
  Improves communication skills.
• Accounting literacy-based courses teach managers to get financial and key performance messages across very simply and powerfully.
• By improving communication itself, the impact of the new-type course reaches further than traditional financial literacy courses.

Now that’s a leverage concept worth signing up for. Clearly.

Colour Accounting™ is that financial literacy course.

Colour Accounting solution provider, The Holst Group, are offering a public workshop on 1st and 2nd July 2013 in Central London, UK.  For more information  visit http://colouraccounting.holstgroup.co.uk

First posted April 2013, by Jennifer Geier

Color Accounting: Business Comes Alive For Lawyers

Today I facilitated a web seminar of Color Accounting for legal professionals. Although I traditionally prefer live sessions for the ability to create a didactic conversation around finance, today went very well. Legal professionals earned 2 MCLE credits without disrupting their schedule by attending this 2 hour seminar right from their computer.

Our ability to discuss technical accounting concepts by focusing on the language is ideal for lawyers as they are experts in language already. Giving them the distinguishing characteristics of the  accounts and explaining their individual natures allows lawyers to get accounting and immediately put it to use in litigations involving valuations. We also discussed "poking holes" in financial statements by focusing on how each account type can be exploited either purposefully or inadvertently through the bookkeeping entries.

You can view the Oklahoma Bar Association website for more information about this session and the upcoming fall session.

http://www.okbar.org/cle/2013/2013-04-24seminarID2776.htm

First posted April 2013, by Peter Frampton