The Best Apps for an Accountant

Most accountant's aren't very technically savvy, to the detriment of our profession. That's why in class, instead of paying attention to the professor (let's hope they don't read this), I sometimes let my eyes wander to see how my classmates take notes and solve problems. As you might have guessed, they use pencil and paper. If you're not an accountant, here's something you should know. We take lots of notes, and we need lots of scatchpaper. Don't get me wrong, I love the feel of my Pilot G-2 07 Gel Pen smoothly caressing the paper, but it's far from efficient. That's why I don't use paper and pencil to takes notes and homework problems. I am entirely paperless. My devices? An iPad for taking notes, and my Mac for everything else. The only alone time I get with my pencil is during exams, and that's because I'm forced to. So here are the devices and the applications I use.

iPad 

PDF Expert

I open all the PDF slides my professors provide in PDF Expert, and sync them through Dropbox (everything I do is saved in cloud storage, but I'll leave that for another post). It's quick and easy, and let's me quickly markup documents. 

Mac

Numbers

For those unaware, Numbers is Apple's version of Excel. It's less powerful, but much cleaner and quicker than Excel for basic calculations. I do all of my homework in Numbers. It lets me play with numbers and see how various things fit together (which is precisely what accounting is). It's like a digital scratchpad that never runs out. Unlike pen and paper, I don't have to scratch out or erase my errors, I can just delete them. Is my answer off by a few cents? No problem. I can quickly adjust the numbers to see which percentage gives me the correct answer. But the best feature of a spreadsheet program like Numbers is its support for formulas. For example, I can set "Income Taxes Paid" to equal the "Tax Rate" multiplied by the "Net Income/Loss", and it computes the answer in real-time. If I decide to change the "Tax Rate", "Income Taxes Paid" changes with it. Imagine doing that on paper. I keep all of my calculations saved in a workbook, with a sheet for each chapter, so that I can refer to the examples at a later time (like when I have to take the CPA, or more likely, before an exam). Numbers is more stable and appealing to look at than Excel, and I highly recommend it for any accountant/student who uses a Mac. 

An example of my Numbers spreadsheet. If you were wondering, I was calculating the Loss Carryforward and Carryback in this problem.

Excel

Every accountant knows about Excel. It's a powerhouse application, and much more powerful than Numbers. That said, most accountants rarely, or likely never, need Excel's power-user features. I still use it for some classes, mainly when the teacher expects the homework in Excel format. It does exactly what I wrote about for Numbers, albeit in a less pretty way. The formula's are nearly identical to the ones in Numbers, so for those who are worried that everything they learned in Numbers won't translate to Excel, stay calm because it will. You'll definitely be using Excel at work, so it helps to get friendly with it.

An Excel spreadsheet with my cost accounting homework.

Soulver

Soulver is what I use when I need to do some quick, dirty calculations. Quick, what's $2,500,212 divided by $20,212? I could do that calculation in Numbers or Excel, but it's much faster to do in Soulver. You can also reverence previous lines. For example, I set "Income before taxes" to Line 1 (revenues) - Line 2 (expenses). It's fantastic for short homework problems. 

That's correct. The above calculations are my net income. 

I use many more apps, but these are the three I use most for school. It always amazes me that students still use pen and paper in 2014, when there are much better options out there. And it's great preparation for the real world, where you'll be doing all your work on the computer, not to mention that you'll be a much more productive employee out of it. If your excuse for not using technology is that exams are on paper, I say to you, sure, then you will want to do practice problems more efficiently on the computer. You can do three to four problems in Numbers in the same time as you would do one in your notebook. Make the computer work for you.

Apple Q2 2014 Results

Finals will start soon, but I had to find some time to analyze Apple's Q2 2014 performance. Let's get right into it. 

by Larry Sukernik

• iPhone sales are steady. The iPhone is Apple's cash cow. Margin's are luscious, production has been perfected, and carrier subsidies keep consumers making repeat purchases. If you spin off the iPhone as a separate company, it would be nearing the top of the Fortune 500 list. It's big, but it's not the next big thing. That might be TV, wearables, or god knows what other new innovative product. Profits from the iPhone keeps the bills paid (and more), but it's clear from Tim Cook's statement's that they are working on something new. 
• iPad growth is slowing. Analysts predicted that iPad sales would fall, but not by as much as they did. Apple sold 16.35M iPad's in Q2 2014, compared to 26.035M the year before, a steep drop. Some reasons I can think of to explain the falling sales? The iPad is a hybrid product, one that fits in between a desktop computer and a smartphone, making it a nonessential product. Those who have it love it (myself included), but the value proposition is not clear for those who don't. Power users prefer keyboards, and while you can buy add-on keyboards for the iPad, they aren't as good as a laptop. Smartphones are also get bigger and nearer to an iPad's size, which makes the value of one even less clear. That said, 16.35M iPad's is still a huge number - nearly 4x the Mac sales, just for reference.
• Macs are like pancakes. Flat. Mac sales are the least volatile segment in Apple's repertoire, because the replacement cycle is predictable and demand is still strong. College students are heavy Mac users, as well as artists, designers, and other "creatives". I'm typing this post on a Mac, and made the graph above on one too, so business people make good use of them too. Not much to say here except that I don't see Mac growth growing much in the future, but nor will it shrink.
• Why is the iPod still around? Great question, and one that I ask myself every time we see iPod sales, which have been steadily plummeting since the iPhone came out. Apple only sold 2.76M units this quarter, likely to gym goers and children. iPod's are great devices to enter the Apple ecosystem with because they are so cheap, so perhaps that's what is at play here. Kid get's an iPod in middle school, asks for an iPhone in high school, and get's an iPad and a Mac for college. 

So what's coming next? Apple's developer conference (WWDC) is just around the corner, and we're all expecting an update to the Apple TV and perhaps mention of a new wearable. Neither of those products are as necessary as a smartphone, so I'm doubtful they will be the next big thing. It doesn't matter though, because Apple doesn't necessarily need the next big thing, but rather a nice, diversified portfolio of products. Time will tell. 

Google 2014 Q1 Results

I've been quite busy with schoolwork, "work" work, and learning to code, so forgive me for posting so sporadically. I may not be posting very often, but I've still been consuming all of the latest tech news as vigorously as ever, so all is dandy. Anyway, that's enough of my solipsism. This week we have a small treat from Google, with their 2014 Quarter 1 results. Below is a transcribed (and beautified) income statement. Percentages are mine.

Google Q1 2014 Income Statement. Q1 2013 included for comparison. 

- Items highlighted in red reduce net income. 

- Items highlighted in green increase net income.

- Items in black are totals. 

Some things of particular interest:

• Revenues grew healthily, despite what Wall Street skeptics will say. As many analysts have noted, Google revenues closely follow the amount of Google users (due to advertising). For revenues to continue growing, the user base has to expand. The U.S. is saturated already (pretty much everybody is a Google user), so revenue growth will either have to come from 1) international users, or 2) other ways of monetizing current users. It's also worth noting that international users are less profitable than U.S. ones.
• For every dollar earned, Google spends $0.14 on Research & Development. Google Glass, Google Maps, self driving cars, Android, Google TV, I can go on with other projects Google is involved in. The good part is that they are constantly innovating. The bad is that many, no - most products never leave the lab. Overall, it's great to see a large company spending so much on research and innovation. Looks like it's not stopping. Google spent 31.5% more on R&D this Q1 compared to last year. 
• Large increase in General & Administrative costs. Are they hiring up? Becoming larger and thus less efficient? Hard to say, but the increase is there and worth pointing out. 
• Net Income rose by 3.17%. Not bad, but not exactly stellar performance either. Considering revenues rose 19%, I would like to see net income follow revenue growth more closely. Trim down the fat (SG&A expenses). That said, technology companies are rarely efficient, so this is nothing to worry about, but again, worth pointing out. 

That's all for now. In the future, I would like to make some comparisons over a longer time period (10 years), but for now, this will do. As always, you can contact me here (I don't bite) or in the comment section below. 

Business School Curriculum Must Get Updated

Lately I've been fascinated by the characteristics that make a company succeed or fail. I'm not the first, and certainly not the last student of business strategies. As a business school student, I'm forced to read about many traditional business strategies used in the last century. You know what I'm talking about. Product Differentiation, Cost Leadership, Michael Porter's Generic Strategies, Lean Supply Chains...I can go on and on. The books they make us read then go on to give examples of successful companies that implemented, and continue to implement such strategies. Hewlett-Packard, Dell, and Motorola are just some of the companies that most often get mentioned. And every damn time I read these textbooks, I think to myself: "These companies lost. They are caricatures of their former self". Why are we learning this again?

Very few people buy HP computers anymore, and the few that do are probably enterprise customers stuck in a contract. Dell, after years of faltering revenues, struck a leveraged buyout in order to go private. And Motorola, oh the beloved Motorola, the company that supplied the U.S. Military, NASA, competed with AT&T during the cellular revolution, and brought to the world a mobile phone that actually had some semblance of design (remember the RAZR?) was recently sold off to Lenovo for a paltry $2.91 billion. The theme here is that none of these textbook business strategies kept these companies alive when faced with modern competitors.

Which makes me raise the question: are these strategies worth teaching anymore? Yes, they are, but only as a historical record. Business school graduates should know what worked in the past in order for them to avoid repeating the same mistakes in the future. 

More importantly though, business schools should embrace new business strategies that work for successful companies today. But before we do anything else, let me try to predict what you might say. You'll counter my idea by saying that these new strategies aren't tried and tested, that they aren't guaranteed to work, that they may be simple, dumb luck. My answer to all of those questions is maybe, but that doesn't mean they shouldn't be taught at universities. If there is one thing I learned about business strategies, it's that they are constantly disrupted by new strategies. The truth is that there is no single, true strategy that will eternally propel a business into success. The times change, the environment changes, the people change, and the strategies change with them. Business strategy isn't like math, it's malleable and constantly adjusts. Therefore, you must be on top of the latest ideas in order to compete successfully. 

With that out of the way, let me list out a few modern business strategies that work (note the word work, not worked) today (not yesterday) for successful companies. I will list one influential book (just one, or else this post would quickly turn into a business encyclopedia) that outlines some of these strategies, and then I will give two examples of companies that use them successfully. 

The Innovator's Dilemma
This is probably the most popular business book in the modern age because it reads very simply and states exactly what you need to know. It's also laced with examples, which always makes ideas more relatable. There are many strategies presented in it, but here is a tease of my personal favorites (paraphrased in my own words).

- Companies must disrupt and cannibalize themselves. Don't let a competitor get there first.
- The customer is NOT always right. The problem they want fixed, however, is.
- Research and Development will lead to innovation. Innovation keeps you successful.

The Innovator's Dilemma is not a perfect book. No book is. But it's a great reading for business school students since many companies today use similar strategies successfully.

Case-Study: Apple
- The iPod was an extremely successful product for Apple. It sold millions of units every quarter, and analysts predicted sales would only go up. What did Apple do? It released an iPhone that cannibalized its iPod sales, which today make up only a small portion of Apple's revenue. That couldn't have been an easy decision, especially since it was so risky, but nonetheless it worked, making Apple one of the most profitable companies in the world. In other words, Apple disrupted its existing, and very successful product, in favor of a product that would be profitable in the future. 
- Apple is almost notorious for refusing to budge to customer demands. It's not because Apple is stubborn (although sometimes, it certainly is), but because the company truly believes it knows what the customer wants better than the customer thinks he wants. This keeps their products simple and easy for people to understand. 

Case-Study: Google
- There has never been a company that lives and breathes R&D as much as Google. Nearly every product and service Google offers is a test to see if it sticks. You may not realize it, but Google has been testing hundreds of different products throughout the years, discontinuing many, and further improving those that work. Remember Google Buzz? Gone. Discontinued in 2011. Picnik? Shuttered in 2012. May you rest in peace iGoogle (2013). You get my point. Google has been pouring money into the development of new products throughout the years. It's like rollling a die, eventually you'll land on a six and win. But most of the time, expect failure. 

The Times Change, And The Education Should Follow
Computer Science students often complain that they are learning programming languages from the 1970's, and would rather learn something modern. The thing about Computer Science is that although the syntax changes, the fundamentals of programming haven't changed at all. Once you learn to think like a programmer, you can learn any other programming language. The same applies to Mathematics. Both subjects remain essentially the same from the time you learned them to the present. Business is nothing like that. Sure, a profit is always a profit, and revenues must always exceed expenses, but the strategy for earning revenues constantly changes. It would be foolish to use old business tactics when new, innovative ones exist, especially considering that traditional tactics are likely to fail. There is very little logic in business strategy. After all, who would think that disrupting your own product is the right business move?

A Smartphone in Every Pocket

"Our slogan from the very beginning was ‘A computer on every desk and in every home,'" said Bill Gates during the height of Microsoft's dominance. As many have noted, that goal has been achieved. It's been achieved years ago, in fact. Whether you were an early adopter, a late one, or even a Mac user, you've undoubtedly had to use a PC at least a few times a month, or more likely, every day. Windows has won, even Steve Jobs admitted to it. If the CEO of your key competitor says so, you know you've won. 

But now look what has happened. Windows computers are on the inevitable decline, year by year. The Surface tablet was an extremely costly public failure. To top it all off, Windows Phone never took off like it was planned to. Despite revenues still reaching record highs, it is clear that Microsoft is in an uncertain position, and management kerfuffles don't alleviate that worry. Microsoft needs the next big thing, a profit center that will lead it for the next decade. Given that smartphones have a market reach far greater than PC's, that should be Microsoft's core focus. Fortunately, they have all of the elements to succeed; it just amazes me that they don't see them.

Here's what I would do to revive the company if I were Satya Nadella.

• Make a Windows Phone. Nothing bad was ever said about the quality of the Surface. In fact, reviewers said that it had fantastic build quality. Now that Microsoft owns Nokia, who rivals Apple in hardware design, making a beautiful Windows Phone should not be a problem. 
• Bundle Free Services. Microsoft has Outlook, OneDrive, Skype, Office, a music store, a video store, and an app store. That's an ecosystem that is far more comprehensive than Apple's. Microsoft's core competition in services is actually Google. Here's how I would tackle this. Google has the reputation for being open and public, which rubs many users the wrong way. Microsoft should take the Apple approach and preach data privacy and the highest level of integrity. Moreover, make all those services free for Windows Phone users. Free calling and texting with Skype, free email with Outlook, free cloud storage with OneDrive, free Office apps. Hell, even make music streaming free for a certain number of hours per month. Right now, the main thing stopping consumers from purchasing Windows Phone devices is the lack of apps. Offering all of these services for free would compensate for that app shortage and would undoubtedly bring many new users to the platform. And developers follow the users. Note that making all of these services totally free for Windows Phone users will be an extremely expensive short term decision, but in the long term it will pay off. 
• Platform Lock In. Apps don't lock in users, but ecosystem services do. I can switch easily from an iPhone to an Android phone and back, because apps like Twitter, Facebook, and WhatsApp are platform agnostic. They offer essentially the same content on all devices. Photo storage, playlist preferences, and documents in the cloud, however, are all things that keep users locked in to your platform. Give iPhone and Android users a compelling reason to switch to Windows Phone with the bundled services above, and keep them glued to it. For example, offer a service that automatically backs up all user photo's in the cloud, give them unlimited storage (unlike Apple, which provides a limited amount for backups), and let them access those photo's online and share them with friends and family. When people are given a compelling free service, they use it. When they use it, they are locked in to the platform. Who would want to switch platforms when they have thousands of photo's saved in OneDrive? That's right...nobody. 

There's one last thing I would do as CEO, that's that marketing the Microsoft ecosystem. Show people why they should switch, and how many free services they get from doing so. Users love free stuff, and Microsoft needs users. Give them what they want, and you will receive them.