Ed Boland: Accounting
Ed Boland helps run a motorcycle shop, but you’ll never find him roaring off on a bike, dodging myopic drivers. “I’ve got a wife and three kids,” he joked. “Scares the hell out of me.” It doesn’t matter. Boland, a graying, middle-aged accountant, is just as useful to Clinton Cycles as a top mechanic or a crack Suzuki salesman.
Above all, a good controller obviously knows where the money is. He helps his employer avoid unneeded trips to the bank to borrow more. Clinton Cycles, in fact, borrows rarely.
That’s one reason why, when U.S. motorcycle sales suffered the economic equivalent of a head-on crash, Clinton survived. The firm even expanded during the early 1980s. Also, years before, owner Don Smolinski had wisely diversified. Clinton Cycles was actually Clinton Cycle and Salvage, Inc., a miniconglomerate with three motorcycle stores and dealings in scrap metal. Sales exceeded several million a year.
But size and complexity weren’t pure joy. Boland’s accounting software just couldn’t handle a holding company and five subsidiaries, not without costly customizing, and nearly a year after computerization, his feelings were still mixed.
“I don’t regret the decision,” Boland said. But at the time he had spent thousands of dollars more than planned, and he told me, “There’s been a few times I would have thrown this computer out the door in a second.”
His horror story—even if it eventually turns into a success tale, as it probably will—is instructive. He’s good. And he bought his software from a good store. Clinton Computers, in the same Maryland suburb, won top ratings in a consumer guide in the Washington, D.C., area. A software executive, moreover, an outspoken one critical of some other D.C. dealers, praised Clinton.
So a bothersome issue arises. If a $3,800 accounting program doesn’t work out easily with good people selling and using it, what happens among mediocre people?
And there is a second point here. Don’t expect even the best computer store to serve as your private consultant, intimately familiar with your business; not, at least, unless you’re buying a big mini or mainframe from the likes of IBM.
A third point, too, comes through. Don’t computerize a multi-million-dollar business without a consultant—at least not if you’re running an extra-hairy program like an accounting one—unless you’re willing to talk and think computerese or at least take a training course. Accounting software, anyway, just isn’t simple and reliable enough yet. Any idiot can flick on a computer and stuff a floppy disk into a drive or crank up a hard disk; most of the time his hardware will work fine, but even the brightest of businessmen may need a consultant to unravel the mysteries of many programs—even “canned,” off-the-shelf accounting packages like the one that bedeviled Ed Boland.
A blunt, tough-talking man, Boland himself is no moron. He holds a bachelors degree in accounting, and he’s worked for employers ranging from hospitals to restaurant chains, including one where he caught a chef on the take from a supplier.
“Accounting is accounting,” he said. “I don’t care if it’s food or motorcycles. Life exists the same way.” Moreover, life is a series of ratios, of intertwining figures. That’s how Boland caught the chef. He knew that food costs were normally 20 percent of the company’s expenses; two months after the chef’s hiring, they were 23 percent, creeping up toward 27 percent, finally. The incident perhaps colored his attitude toward computerization. He would computerize, but not overdo it, not lose himself in tangential statistics, not hire extra clerks to key in data.
“We carry more than seventy thousand new parts numbers alone,” he said. “Seventy thousand different kinds of screws, bolts, nuts, fenders, rims.” But if he couldn’t track every single bolt, he at least could work with major numbers like sales figures for various categories.
Normally, for instance, new bike sales and accessories sales went up and down together, and if one of the two had fallen off alone, you could bet that Boland would demand a reason. If nothing else, computers, by making past information available more quickly, could help him sniff out trouble.
Computerizing, he saw a micro as one way to avoid greedy consultants and their expensive recommendations.
“I’ve seen too many instances,” said Boland, “where businesses paid out $50,000, $60,000 to a consultant who spent six or seven months analyzing computer requirements. Then he’d recommend $50,000 or $150,000 worth of computer equipment.” Boland wanted the benefits of the bigger machines without the costs. His goal was to reach the point that a somewhat larger competitor in the D.C. area already had; the rival owned an IBM 34 system with a six-digit price.
“He used to work for IBM fifteen or twenty years ago, before he went into the motorcycle business,” Boland said. “He now has just about every one of his salespeople on commission, and he knows exactly what they sell every day. He can tell you where each motorcycle, each piece of inventory, is.
“He can tell you whether it’s in a truck, what color it is, where it is, what stage of preparation it’s in for delivery. He puts his purchases in the computer with an inventory program. The moment a salesman sells a cycle, the register itself deducts it from inventory. It’s a point-of-sales system. So theoretically, at the end of the day he knows exactly what he started the day with, what he sold, what he added to it, and what the bottom-line figure is. We’d love to get to that point.
“The likelihood of this happening with us, though, is very low. I don’t know if all this detail is necessary. And our business is seasonal, and I don’t want too much cash tied up in the system. And what’s the sense of keeping instant track of every nut and bolt sold? But we’d love to get the major items in on computer. The motorcycles, for instance. They can easily sell for up to $6,000 apiece, so it’s worth it.
“It’s a question of software. This competitor has spent more than $100,000 to develop specific software to get what he wants. Now if you’ve got $100,000 to throw away and want to hire a programmer full time at, say, 0,000 a year, that’s fine. Most companies like us can’t afford that.”
So Boland bought several programs off the shelf from Clinton Computers, including Accounting Plus, which he began trying to use as an electronic general ledger. He ran it on a North Star computer with a 5-megabyte hard disk—a memory device capable of stashing away the equivalent of maybe 2,500 typed pages of information. The North Star system was just a way for him to get his feet wet in computing with a general-ledger program. Boland, though, would switch computers even sooner than expected. The system’s memory space wouldn’t suffice for the records of his miniconglomerate, and it wasn’t easily expandable. And he would have trouble getting the machine repaired as quickly as he needed. Clinton Computers, however good its service department, just could not respond fast enough to suit his requirements.
And the software seemed just as major a disappointment, what with the need for complicated customization.
“The biggest problem I ran into at the store,” he said of the hardware and software, “was ‘We’re going to sell you a system that we think will do the job, but not necessarily so.’”
Both the buyer and the seller, in this case, apparently lost the software gamble; they apparently came out on the wrong side of “necessarily.” Clinton Computers did not win, because it isn’t a fly-by-night operation. Boland’s name had come to me from none other than Sue Grothoff, who’d sold him the software. She had enough confidence in herself and her store to offer Boland as the source of a “candid” story, and my respect remains, especially after having talked to another business customer, raving happy about her ability to understand his company’s software needs.
Boland emphasized that Clinton wasn’t out to cheat him. “Sue is a very nice person.” And he liked the software expert there, too. “He knows how to change software, but you have one person trying to meet the needs of too many customers. He’s spread too thin. Clinton never gave him enough time to get the program running at my business. And we never could seem to get together to get the twelve hours of training they’ve promised me. To be frank, I think we spent the twelve hours trying to correct the problem I had rather than on training.”
Giving Clinton Computer’s side, Grothoff said, “Because of changes that Ed wanted in the software, it took longer to adapt the program to meet his needs. And that used up the twelve hours.” Evidently, Boland and Grothoff stayed on good terms, because she later sold him a new Kaypro portable for home use.
But with his big computer system at work, Boland—for one reason or another—seems to have suffered more than his share of woes.
“Accounting Plus,” said Boland of the software he bought there, “is a very good program, but it was designed for one single company to be subdivided into departments. You could have six departments, everything from sales to used parts, and it will work beautifully. But it wouldn’t for what I wanted. It would not treat a motorcycle store, for instance, as a subdivision of a holding company. I could not pull off separate profit and loss statements or separate balance sheets.”
Clinton Computers, to its credit, referred Boland to a consultant familiar with the source code of Accounting Plus—a part of the program that would enable it to be customized. The consultant took in Boland’s North Star computer system as a trade-in. He sold him a Delta microcomputer and TeleVideo terminal in return, along with a hard-disk system upgradable to 70 megabytes. With the software customization included, the cost came to $20,000, minus the $12,000 trade-in. The consultant, like Clinton Computers, didn’t know as much about accounting as Boland had hoped. But through sheer tenacity Boland at least got himself a halfway usable program.
“I had the software changed,” he said, “so that instead of one company with departments in it, it now reads a holding company with subsidiary companies. The software was changed to print out separate balance sheets and separate income statements for me.
“On the income-statement side this machine will ask me if I want a consolidated or individual by-page income statement. It will print out a holding company and then, in successive order, on each page, the income statement for each company. When I go to the balance sheet, it will ask me that same question.
“If I tell it I want individuals and a consolidated by page, it won’t do it. I must ask it individually each time for company one, then company two, right down the line. I have to give the computer individual instructions to do that.
“And that was the best my consultant could do to change the software. It got the job done, but not all the way.
“I’ve since found out that for $400, not ,800, I could have bought an accounting package that would do exactly the same thing I wanted.”
So why didn’t he buy it?
“Why spend another $400 to delve into it further and then find out it isn’t what you wanted?” Boland asked. “I think it’s stupid to spend money at this point. I have a system I know I can make work within certain limits. I’m still in the learning phase, and I’ll probably still be there for another year, for all I know.” I thought he was too patient. If his software system was a dog—perhaps not for everyone but for him—he should change it. Four hundred dollars was a pittance compared to Boland’s total investment of $20,000.
Ideally, too, as he said himself, he would have gone to a consultant in the first place, not just any consultant but one familiar with accounting. And yet it’s understandable why he acted as he did. Why repeat the mistakes he’d seen at other companies? Why not frugality? Better to be out $20,000 than $50,000 or $100,000 after paying for a mini, a consultant, and the other trimmings. His computer wasn’t making or saving buckets of money for Clinton Cycle and Salvage as of early 1983; but it might in the future as he got his software under control and could, for instance, easily put salesmen on commission.
He told me, moreover, that he would soon stop farming out the company payroll—up to seventy people—to a computer firm. He also was mastering an electronic spreadsheet. He did not plan an accounts receivable program, because Clinton Cycle collected quickly through checks and credit cards, but an accounts payable one was in the offing.
“It’s going to give me the companies’ names, the payment terms, the volume I deal with them each month,” Boland said. “It will flag when the bills are due, and it will also generate checks.”
He was also going to crank up a mailing-list program, using a list of all buyers of new bikes within the last three years—a sensible project, considering the market for accessories and repeat sales. Obviously, here, as in other applications, the more information built up on his hard disk, the more his machines would justify the $20,000 investment. The benefits of computerization for Edward Boland might not be immediately dramatic, but with his stick-to-itiveness, sooner or later they’d almost surely come. Boland’s battles with computers were to continue. When I caught up with him in spring 1984, he said he’d bought yet another computer system.