SIGNS THAT YOU ARE FOOTED BY YOUR ACCOUNTANT

Who is this article for

For many entrepreneurs, the head of his financial and economic or accounting department (hereinafter, for simplicity, we will use the term "accountant") is the right hand, the main assistant and advisor in business. If you are among such wise and successful businessmen, and you are sure that your rear is strong, and it will always be so, then you probably should not waste time reading this article.

This article is written for those who believe that their business could benefit from the accounting service more, and want to know how to achieve this without repeating other people's mistakes and without relying on charlatans.

We will not only show you the signs of problems, but we will also show you how to prevent and solve them.

This article is not intended to be an all-encompassing guide, rather it is a call to think together about the issues that hinder effective communication between business owners and their financial managers. You will also be interested in the an article about property management bookkeeping.

Phrases that will make you think

 "Everything is wrong here"

Have you ever heard from your accountant emotional, often unfounded, accusations against the previous accountant, colleagues, employees of counterparty companies?

As a rule, the purpose of such statements is to anticipate criticism from management for omissions in work, to shift responsibility onto others, and to hide their own incompetence.

Insignificant, sometimes far-fetched, shortcomings are inflated to the scale of a global problem. At the same time, real problems fade into the background. But they, of course, do not go anywhere, but simply wait in the wings to turn into troubles for the company.

Such a manipulative accountant at the first signs of impending disaster will hasten to leave the company, leaving its management alone with the problems, and go to fool a new gullible employer.

What to do

If your accountant complains about the mistakes of other people, because of which he cannot perform his functions efficiently, ask him to state the essence of the problem in writing, in the form of a memo. First, it will allow him to separate the rational seeds from emotions himself, and will save you from the need to spend your energy on this. After all, manipulators usually want you to waste your energy unproductively. Second, written information is much easier to verify.

If, instead of describing the problems, you again get a lot of emotional reasons why this cannot be done, then you should know that you are facing a manipulator, and his claims have no real basis. Get rid of such a person immediately. Remember that, in accordance with the principle of professional conduct in the International Federation of Accountants' Code of Ethics, a professional accountant should not disparage the work of others or unreasonably compare it to his own work.

If you did receive a reasoned description of the problems from the accountant, show this document to a competent third-party specialist - a certified accountant, auditor, consultant. We emphasize that this must necessarily be a third-party, not biased specialist who can look at the situation from the point of view of common sense, and not through the prism of the relations and stereotypes that have developed in the company. Moreover, he must have sufficient experience and knowledge so that, without being familiar with your company in detail from the inside, he can quickly understand the situation.

Most likely, such a person will be able to assess how justified the statements of your accountant are and give qualified recommendations to correct the situation. Depending on the degree of complexity and neglect of the situation, it may be necessary to audit business processes or check the status of accounting.

An example from our practice

The chief accountant, taking advantage of the inexperience of the newly appointed head of the enterprise, hid her lack of the necessary qualifications and experience in this industry.

For several months, she managed to hide her incompetence, shifting the blame for the problems onto a second accountant, hired by the employment center, who also did not have the required level of knowledge. All this time, accounting at the enterprise was simply falling apart.

When exposure began to look imminent, the chief accountant quickly resigned.

Unfortunately, the head of the enterprise could not understand in time what kind of person he hired. And having understood, albeit with a delay, he turned to our company.

What have we found out?

After examining the state of accounting, we found out that the accounting data is completely inaccurate. Required restoration of accounting for 9 previous months.

How did we solve the problem?

Our company carried out the restoration of accounting, developed and implemented, with the participation of a new chief accountant, an adequate accounting policy. The head and chief accountant of the company have been successfully using our advisory support for nine years now.

 "I do not have time for anything"

Of course, in the work of an accountant, rush jobs are not uncommon, and often they are due to objective reasons. As a rule, these reasons are well known to the company's management. These can be, for example, recent changes in tax legislation, made at the last moment or retroactively; illness of a key employee; a crash in the program resulting in data loss.

But what if the accountant constantly, for no apparent external reason, complains about the workload and lack of time? A common reaction of managers (and, I must say bluntly, many accountants are actively pushing them to this decision) is to hire one more employee, two, three ...

Often, the most obvious solution turns out to be the least correct one. First, it is worth asking a question - why, in the absence of force majeure circumstances, the accounting department cannot cope with the required amount of work? Maybe because the work is not organized correctly? Maybe the chief accountant simply does not know how to manage the resources already available? Or maybe the existing employees are not coping with the work due to the lack of necessary skills? If so, then increasing the number of employees will only further increase the chaos.

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What to do

First of all, you need to find out how much time employees spend on various tasks. This is not difficult to do. For a certain period of time, each employee will have to fill out, and at the end of each working day submit to you (preferably in electronic form, for example, in an Excel file) a questionnaire - a photo of his working time. It is important that every employee does this on a daily basis. At the same time, you must, during the entire observation period, control the time of the arrival of employees to work and their departure from work.

The duration of the questionnaire period depends on how often the operations performed by the employees are repeated and can range from one week to one month. For example, for employees who are busy performing the same routine tasks every day, a week may be enough.

After that, it is necessary to summarize and analyze the results of the survey. All tasks that were performed by employees must be sorted in descending order of time spent. Starting with the most "labor-intensive" tasks, you need to find out what the costs of working time depend on and how they can be reduced.

Sometimes, in the process of such an analysis, it turns out that employees are engaged in tasks, the results of which are not needed by anyone, simply because once upon a time this was the case.

You probably ask yourself a question - what if unscrupulous employees indicate false data in the questionnaires?

Don't worry too much. After all, you controlled the total amount of work time used. If an employee in the questionnaire indicates too much time to perform simple tasks that normally require significantly less labor, this will be clearly noticeable. And if an employee spends twice or three times more time than he should, this will indicate to you his low qualifications or unfair attitude to work.

An example from our practice

The accounting department of the distribution division of a large company - a food manufacturer - consisted of 7 people, five of whom were engaged in invoicing. Accountants had to work 9-10 hours, 6 days a week. However, they were catastrophically unable to enter documents into the computer system. The backlog was 6-7 days (despite the fact that the grace period for most buyers was 7 days). This meant that the company never knew the real state of the buyers' debt at all. As a result, overdue debt grew like a snowball.

What have we found out?

Our experts analyzed the use of working time by the accounting staff.

When analyzing the data, we were immediately struck by the inadequately large expenditures of working time for carrying out consignment notes. After talking with the accountants, we established the reason.

First, the company's sales department delivered products to customers around the clock, seven days a week. And the accounting department worked from 8:00 to 17:30, with a day off on Sunday. Freight forwarders who returned from a voyage in the evening, at night, or on Sunday left waybills at the sales department and went home to rest. Arriving at work in the morning, accountants picked up mountains of invoices from the night delivery from the sales department. There were frequent cases of loss of documents during their transfer.

Secondly, upon returning from the voyage, the forwarders handed over to the warehouse the goods that were not accepted by the buyers, but at the same time they never checked its quantity with the accounting department. The reason was the same - accountants at that time were simply absent from work.

When the invoices reached the accounting department, the accountants had to check the quantity of the goods accepted by the buyers with the quantity of the goods shipped and returned. At the same time, discrepancies were often revealed, the reasons for which the accountants did not know and could not find out, since the forwarders were on the road at that time. A vicious circle emerged. This was the reason that the accounting department spent too much time on a completely routine task, and the documents were carried out with a great delay, not to mention the regular shortages of goods.

How did we solve the problem?

First, we offered the client to lay off two accountants, and organize the work of the remaining three in shifts. Now, at least one accountant was permanently employed in sales accounting.

Secondly, we insisted that upon returning from the flight the forwarders submit the report directly to the accountant on duty, right there, on the spot, clarifying all the controversial issues.

Now the documents were carried out "day by day", the company always had up-to-date data on the buyers' debt, and could take timely measures to collect it.

As a result, in three months the amount of overdue debt decreased by UAH 3 million. The number of shortages has decreased significantly.

The remaining accountants now worked 40 hours a week instead of 50-60 as before. And yet everyone had time!