At Plumb, we act as an extension to your accounting department and management team. For 20 years, Plumb has been providing accounting department’s with outsourced accounting services and software solutions.
Typically, our outsourced accounting engagements start from a problem that our client is facing. In this article, you will learn what could be hurting your accounting department and how to correct the problem.
Written by: Margo Whitchurch, Outsourced Controller at Plumb
1. Accounting Software:
Is accounting software expensive? Yes.
Is wasting time on accounting software that doesn’t meet your needs expensive? Also yes.
Whether you’ve outgrown your current system or it hasn’t met your needs from day one, your software is costing you money. While the cost to upgrade may be a stretch for you and your company, accurate numbers and visibility into your business are priceless. Ask yourself what drives your business and then assess your current software. Are there current limitations that are preventing you from getting the information you need? What numbers do you want to see, and how accessible are those numbers?
In addition to purchasing the software, invest in training or at the very least a support contract. I see many clients that have purchased excellent software, but the staff are not properly trained or aren’t aware of important features.
2. Reluctance To Let Staff Go:
An all too common problem I see is employees on staff that don’t fit the position or the company.
I hear many clients say, “Oh, I can’t let her go, she’s been with us for 30 years”, or “Well, we needed an AP accountant position to be filled quickly and he was the only one available”.
Evaluate your staff and their skills. If your accountant has been with you for 30 years and consistently delivers what you need, then nothing needs to change. If your AP employee has improved with guidance and training, he or she might be the right fit after all. But if you’re constantly dealing with resistance to change, lack of interest in training or skills improvement, or recurring issues that don’t improve with guidance, it may be time to start interviewing new candidates.
3. Lack of Written Procedures:
What is your company’s policy regarding procedures for staff?
Do your employees have reliable, updated instructions for all aspects of their job description?
When a new problem is solved, are the steps to resolve the issue documented so others can follow the same process?
When a staff member goes on vacation, or worse, quits or is terminated unexpectedly, could someone step in and fill the position based on a training and instruction manual? Investing the time in creating procedures and keeping those procedures updated is invaluable. While every company experiences issues that have no procedure manual, setting up your people for success with the basics will save time, money, and confusion. Even better, when documenting procedures, you may find opportunities to improve efficiencies, adjust job duties, and create or eliminate job positions.
4. No Separation of Duties:
If your company is operating with a very small staff, separation of duties can seem near impossible. How can you separate accounting duties when you only have one bookkeeper and/or accountant?
Separation of duties isn’t just about assigning different tasks to different people, it’s about protecting the company from conflicts of interest and fraud.
For example, if your bookkeeper is the only person who can write checks from your accounting software, make sure he or she can’t sign those checks. If one person enters all the bills, make sure to review those invoices or your aging reports to make sure the bills are accurate. While you don’t need to micro-manage every step of the accounting process, it’s important to make sure that more than one person must be involved to complete the accounting cycle to protect your business.
5. Waiting Too Long to Seek Help:
One of my favorite things about my job is seeing a company’s accounting become streamlined, organized, and accurate.
Sometimes an external view of accounting that Plumb provides is exactly what a business needs to:
- Grow to the next level
- Improve accounting efficiencies
- Establish proper procedures
In conclusion, if you’re currently thinking you may need outside accounting help, chances are you already do. Waiting longer will cause more clean-up for an outside consultant.
Take the steps now to establish good accounting procedures at your company before clean-up is required. And if you decide to seek outside software or accounting help, I know a great company. 🙂