Is your Accounting Department suffering from any of these 7 dysfunctions?

Posted by Ben Kaplan on October 9, 2014


Every workaround and every manual process that you’re required to do outside of your accounting system represents an inadequacy of the system.  We’re not saying it’s a bad software solution; we’re suggesting it just wasn’t designed to align with your business.

So let’s examine a couple of routine responsibilities (period end closings and responding to requests for information), and see if inadequate systems and processes hamper the execution of those responsibilities.

Do any of the following sound familiar?

Period-end Closings Taking Days - Are you always waiting for other locations or subsidiaries to send you a file to import?  And, as a result, your period end closings are takings days, or worse, weeks to complete.

2 Labor Intesive Manual Reconcilliations - Are your other locations and subsidiaries on a different software system forcing you to go through labor-intensive manual reconciliations of their imported file entries before you can start a close?  That is – if they are giving you files and not emails or faxes containing their information!

3 Multi-Location Accounts Do Not Match - Do accounts from multiple locations and subsidiaries not match the accounts in your main, consolidated system? This can often manifest itself as many manual adjustments, reallocations of amounts, or just ‘plugging in’ an amount into your reports to attempt to associate amounts to something close to what you need.

4 Closing Delays are Increasing Costs - How much is it costing you in labor and opportunities lost for every day you delay having your accounting books closed and reports distributed each period?

5 Your Analyses are Compromised - So you have finally reduced some of your closing time, but have you found you did it by minimizing your chart of accounts so as to minimize the reconciling process of matching accounts from your other locations and subsidiaries during the closing process? Fewer accounts help reduce adjustments during close, but compromise analysis – which would be better accommodated with more detail.

6 Your Team Can't Easily Identify Profitable Clients -  Are you noticing that few, if any requests are made for changes in reporting information from managers or executives?  It’s usually a sign that they have given up asking – as the effort to accommodate a request is too labor intensive and often takes multiple closings to perfect. Do you feel like you are working to satisfy your software system rather than working to manage your business.  Do you know how profitable each of your customers is?  Do you know the profit contribution of each of your vendors?  Having many locations and subsidiaries should not be the reason.

7 Staff Required To Create Duplicate Entries - Is your staff required to enter the same information multiple times?  Are they entering the same vendor, customer or items as many times as you have locations or subsidiaries?

Is the period end process so painful it has obscured everything except surviving the process? Have you and other stakeholders resigned yourselves to an approach that can be summed up by saying, “Just give me what you’ve got and I’ll do the best I can with it”?

Often we see that everyone involved in the process is discouraged from suggesting or making any changes because they understand those changes will only make an already painful routine more painful.

Inadequacies nurture dysfunction:  Getting through the closing process has become the priority at the expense of producing better information with which to guide the business.  You probably feel like you are barely managing some days.


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