Professionals at small companies rightly determine that the best use of their time should be devoted to the performance of billable client services rather
than to non-billable administration. Virtual administration, combined with web-based accessibility, provides the professional with a cost effective means to
offload time-consuming administrative tasks to a trained LAWS/Pro professional.
The need for administrative support becomes apparent when one realizes that most professionals dread administrative tasks. Since these duties erode billable time,
professionals often delegate them to overworked secretaries who then postponed them until "free time" is available. This results in outdated, unreliable, and
possibly meaningless internal management and accounting information.
The solution to this problem lies in the sincere desire of the company to improve its internal administration coupled
with an integrated, high-quality, web-based time & billing practice management application coordinated by a strong relationship with a professional virtual office administrator.
A virtual administrator is a live person thoroughly familiar with company operating procedures and trained in the efficient use of technology. They perform standard
administrative tasks and monitor the company's performance remotely through the Internet, shifting the burden of administration away from the professional and secretary.
Typical tasks which may be efficiently delegated to the Virtual Administrator consist of:
Reconcile cash accounts to bank statements.
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Bank Account Reconciliation
Balancing the company's cash account to the bank's balance is the only way to verify the integrity of information within LAWS/Pro and guard against possible errors, fraud or
embezzlement. If the company's cash balance matches the bank statement, the company can be reasonably assured that all receipt and disbursement activity has been posted throughout
the system correctly. There may however exist misapplications which will be found upon normal review and addressed on a instance by instance basis.
Prior to forwarding the bank statement to the Virtual Administrator, it is imperative that the managing professional physically review the returned checks and electronic disbursements
for reasonability. The Virtual Administrator may then provide the following services:
Reconcile cash account: Verification that all checks returned with the bank statement and all noted deposits have been processed correctly
through the system. Discrepancies will be discussed with the company and corrected by the Virtual Administrator through the web-based LAWS/Pro application.
Detail review of electronic transfers: Electronic transfers represent direct deductions from the bank account without use of a company prepared
check. All electronic transfers are reviewed for accuracy and brought to the attention of the company to eliminate the possibility of unauthorized distributions from the account.
Correction of discovered procedural problems: Procedural problems - such as non-recorded manually prepared checks or deposits taken to the bank
but not processed against the outstanding accounts receivable balance due - are often discovered during the reconciliation process. These problems may be immediately addressed with the appropriate individuals within the company and corrected thereby increasing the future reliability of the application.
Review of work in process balances combined with review of entry and billing procedures.
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Work in Process Review
One of the production goals of most companies is to generate a high quantity of billable work in process, then convert it to collectible receipts as quickly as possible through
efficient billing and collection procedures.
Virtual Administration can help the company implement the appropriate work in process management techniques accomplishing this goal as follows:
Review Aged Work in Process: LAWS/Pro allows reporting of the company's un-billed work in process based on the age of the service rendered.
The Virtual Administrator reviews this aging information and informs the company of items with aging work in process balances which should be billed. As work in process becomes older
it also becomes less collectable.
Review the assigned rates: Reporting within LAWS/Pro allows identification of items containing work in process transactions without assigned rates.
The Virtual Administrator can review this work in process and alert the company, and help correct, any discovered problems.
Review the timeliness of hours worked: Within each work in process transaction LAWS/Pro maintains the date of service as well as the date it was
entered into the system. The Virtual Administrator reviews this information to determine the timeliness of the transaction entered. Professionals not using the calendering system
efficiently can be encouraged to modify their practices to better use the system and improve their productivity.
Review billing procedures: The Virtual Administrator can review the actual bills generated during the course of the month and advise the
company of any discovered inefficiencies - such as items with WIP not billed, delayed billings, incorrect application of retainers, etc. Efficiencies available within the
system, but not utilized, may also be discussed with the company for possible implementation.
Review of delinquent accounts receivable balances with emphasis on collection of aging debt.
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Accounts Receivable Review
Many companies find themselves in the situation where sufficient work in process is recorded and billed, but never collected. Often the majority of a company's outstanding
accounts receivable debt falls within the "over 120 days old" category. Once the company's debt reaches this aging category, it becomes very difficult to collect.
Virtual Administration can help the company implement the appropriate accounts receivable management techniques encouraging the timely collection of this debt as follows:
Encourage smaller, frequent, billings: One of the easiest means of encouraging collection is to generate smaller, frequent bills, rather than
producing a single invoice due at the completion of a project or case. For example: Clients find it easier to pay twelve $500 invoices over the course of a year rather than a
single $6,000 bill at years end.
Encourage use of reminder notices: Once per month send reminder notices to all clients maintaining a balance due. The statements shouldn't
be nasty, but should inform the client that they received a service from the company and the company expects payment.
Encourage direct communication with delinquent clients: Once a clients accounts receivable debt reaches 60 days old, it's important for the
professional to have direct contact with the client addressing the issue of payment.
Encourage the use of retainers: Prior to providing service to new clients, request a retainer which may either be applied to future bills,
or held until the completion of the project or case. If the client is unable to provide a retainer for services rendered, there's a high likelihood that their debt may
become uncollectible.
Review and analysis of actual performance to pre-defined budget expectations.
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Financial Planning - Budget to Actual Analysis
Very few small companies understand the importance of financial planning and instead judge their performance by their current cash position. A vital role for the virtual
administrator is to discuss with the professional their short and long-term goals and develop a budget required to meet them. Thereafter the virtual administrator can monitor
the company's actual performance against these developed expectations and advise the professional of variances.
Professional Productivity: If professionals are serious about improving productivity, it's important to be able to evaluate actual performance
against developed expectations. LAWS/Pro provides the means of implementing performance standards by professional. Managerial reports may then be generated comparing actual
performance to these developed expectations. The appropriate measures may be then be implemented to address and rectify negative variance.
Financial Budgeting: LAWS/Pro provides the means of implementing a financial budget which compares actual company performance to developed
expectations. Budgets are planning tools. They force the company to think about how it expects to perform and what it will cost to reach those expectations. Without a budget,
small companies can easily lose direction and a valuable means of gauging performance.
A Virtual Administrator can discuss the desired goals of company, then develop a budget required to attain those goals. Thereafter, the Virtual Administrator can monitor company
performance and discuss with the professional policies and procedures to address negative variances.
Review of the reasonability of posted general ledger activity.
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Review of General Ledger Activity
The Virtual Administration does not replace your accountant, but is designed to supplement the relationship. All financial activity is automatically posted from the
LAWS/Pro check writing and cash receipts program. Non-cash transactions may be posted through the journal entry program.
LAWS/Pro Virtual Administrators know how the system should operate and how to address and fix common problems. They can easily review the general ledger activity with
special emphasis on the following:
Balanced general ledger: The LAWS/Pro Virtual Administrator can review the trial balance and ensure it balances. In the unlikely
event it is out of balance, they can research and correct the problem.
Review manual journal entries: LAWS/Pro automatically and seamlessly posts all normal day-to-day financial activity. The cash
receipt program posts revenue while the check writing program records expenses. Often manual journal entries are posted in error - in hopes of correcting some situation -
which should not have been posted. These journal entries can be reviewed for reasonability and correctness.
System generated general ledger can also be reviewed for reasonability. For example, a simple review or general ledger activity may
uncover an automobile expense mistakenly posted to the wrong account - malpractice insurance. This error can easily be corrected through the posting of a correcting journal entry.
System Integration: LAWS/Pro is designed to automatically post normal day-to-day general ledger activity. When correctly set up, this
posting is transparent. Virtual Administrators know how to seamlessly integrate general ledger activity throughout the system.
For example: Checks may be generated without vendor codes, but great efficiency is gained if commonly used vendors are defined within the system along with the
standard general ledger numbers used by that vendor.
Regardless of the system employed, the professional and staff are required to maintain a calendar, record billable time, write checks, post deposits, and generate bills.
Administrative duties falling outside the scope of this required activity can be efficiently delegated to the virtual administrator whose effective oversight can significantly
streamline the company's performance, reduce redundancy, and eliminate the intrusiveness of these required tasks.
DeskTop Business Solutions maintains a list of Virtual Administration Partners who can assist you in optimizing your efforts and maximizing your profits.
Contact us for more information and referrals.
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