Notes from the President

Ken Hilton - President Red Wing Software

If it works, don’t fix it. I’m sure everyone has heard that statement, but is this philosophy always good to live by? That depends on what it is that “works.” In some cases, you can get away with letting things fail, and then take action to fix or replace them. In other cases, it’s a good idea to fix things at the first sign of trouble, and sometimes things should be “fixed” even before anything appears to be wrong. Let’s take a look at a few examples.
Let’s say the speakers on your computer are making a funny noise, and it’s not because you’re watching hilarious YouTube videos. It might be okay to put up with the noise because, it’s probably not critical to running your business if the speakers fail. Or, your car is making a noise that you have identified and it is not compromising safety. In this case, you can turn the speakers up and not hear the noise anymore.
Now, you walk into your house after a long day at work and smell gas. You can’t see anything wrong. The house isn’t cold, so the furnace must still work. But if you decide to ignore it and retire for the night, you may sleep for a very long time. This obviously needs to be dealt with right away, even though you see nothing wrong.
How is your computer running? I’ll bet it’s running just fine, so why would you need to back up your information? Computers rarely give you a sign that something is about to go haywire. That doesn’t mean you don’t need a backup. And, while we’re talking about technology, how old is the computer and/or software that your business is relying on? Eventually, the computer will fail, and the old software may not run on new equipment. Are you prepared to reenter all the information you need to run your business because your data will not move to newer software? Think about it.
Sometimes things need to be fixed, even if they still work.

Notes from the President

Ken Hilton - President Red Wing Software

Spring is here according to the calendar. Although, with snow on the ground in many parts of the country, it may not feel like it. The arrival of spring prompts many of us to start thinking about doing some spring cleaning. Included in your spring cleaning should be a review of your financial information. Here are a few things to think about cleaning up.
When entering transactions, it’s easy to enter, as new, the name of a customer or vendor that may already exist in your database. This creates a duplicate of that name and may make it difficult to find transactions related to that name. Having duplicate names also skews the numbers when performing an analysis of the business you’ve conducted with that person or company. In CenterPoint, you can easily go into setup and combine duplicate entries, making it easier to find transactions for that name.
Another example is one that I recently completed with my personal data. Since I started keeping my personal records in our software (November 1987), I have had separate accounts (subaccounts) for “dining out” and “school lunches” under a “meals” account. Since I have not paid for a school lunch in over 25 years, it’s probably unnecessary to separate those expenses. Not a big deal, but it makes my data a little cleaner.
Of course, it’s also the end of a calendar quarter, and that’s always a good time to take a look at how your actual business is doing compared to the budget you created for the year. (You did create a budget, didn’t you?) Also, it’s good timing to check inventory that you have on hand against the information in your accounting program.
I’m sure you can think of several other things that can be completed as part of your spring (data) cleaning.

Notes from the President

Ken Hilton - President Red Wing Software

Unless you live in a bubble (which I am sure it has felt like the last few months), you know it has been cold in most of the country the last few days. It is interesting how all things are relative to some perceived standard. As I write this, it is thirty-nine degrees in MN and feels like summer. Last fall, when it was thirty-nine degrees, it felt like the middle of winter.
If you are in a seasonal business, the year’s busy times can feel like you are on an unstoppable roll, and the slow times of the year can feel like things are bad and can’t get any worse. That is when you need to step back and take a high-level look at the business and get the perspective on where the business truly is and when it will get better.
Doing some trend analysis over several years can give you a clearer picture of where you have been and the long-term direction of the company. You can accomplish this using the multi-year balance sheets, cash flows, and income statements available in your accounting software. Using the optional Ratio Analysis in CenterPoint® Accounting will give you a great visual trend of many financial indicators.
Whatever method you choose to get perspective on the business, it is important to make decisions based on all available information.

Notes from the President

Ken Hilton - President Red Wing Software

I am certain you’ve heard more about viruses recently than you care to admit, but I want to remind you about a different type of virus.
Recently a long-time customer contacted us about an issue they had with ransomware. Ransomware is a malicious program that infects a computer when the user opens a file or clicks on a link in an email that comes from an unrecognized source or may have even been forwarded by someone you know. Ransomware typically prevents access to information on the machine until you pay a ransom to the individual that created the virus. The alternative to paying the ransom is to restore a backup from a time before the computer was infected.
I bring this up to point out the importance of regularly backing up your data and keeping your antivirus software and operating system up to date with current versions. As older versions of operating systems and software are phased out and not supported by the authors, updates that include code that attempts to prevent these attacks are no longer available. The cost of keeping your technology (hardware and software) up to date is far lower than the price of recovering from malicious activity. Another possible solution to protecting your accounting and payroll programs and data is to move them to the cloud. Hosted environments offer some added security and protection from viruses and malicious activity.
As you create your budget for the year (which should be complete for 2021 by now), in addition to the normal budgeted items, you should include a line item for keeping your technology current.

Notes from the President

Ken Hilton - President Red Wing Software

I hope everyone had a safe holiday season and are starting the new year on the right foot. Now is a great time to look back at 2020 and evaluate what we learned about how we do business. As I mentioned in a previous newsletter, I am a strong believer in zero-based budgeting, only using history as a guide. Budgeting for 2021 is a perfect example of why you would not necessarily want to use the previous year as a benchmark. The same process can be used for other aspects of the business.
We all probably made some unexpected changes in the way we operate our business and hopefully learned some important lessons. I will share a few of the lessons we learned at Red Wing Software, and maybe you can relate them to your own business.
We learned: while our team enjoys working together in an office environment, they can be at least as productive working from home. In fact, a few commented how they did not miss the commute through the little city of Red Wing to get to the office on the other side of town, especially our folks crossing over the river from Wisconsin.
We learned: meetings can be very productive using video conferencing, and it was surprisingly easy to get everyone up and running with that technology. Thanks to Larry, our awesome IT Manager.
We learned: we can get by with considerably less office space, but still need a place for shared resources like copy machines and postage equipment.
We learned: we can bring a new employee up to speed without being face-to-face in the same office, but it is much easier to transfer knowledge in a shared environment.
While we hope 2021 does not mirror the previous year, we will be starting with a blank page as we move forward, taking advantage of the lessons we learned in 2020.