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Continuing our series, David Parmenter, CEO of Waymark Solutions, discusses three more of the biggest blunders company accountants make and how to fix them.
The annual report, while an important legal requirement, does not create any value within your organisation. Thus seldom will your team have received any form of gratitude for it in the past. Accounting functions therefore need to find ways to extract value from the process while at the same time bringing it into a tight time-frame.How many times has the final year end audited number been within 5% of the month 12 number? We spend far too much time chasing our tail. There is absolutely no reason in 99% of cases why the first cut off year-end for internal reporting should not be the same as the last cut for external reporting. Allowing the auditors the luxury of a leisurely year-end sign-off based around their workload provides them with many months of hindsight where unrecorded liabilities and the like are there for all to see. It is daft to air problems for that length of time!Action:Make it a level playing field and request a sign-off within 15 working days of year-end. Understand how to perform a year-end inside 15 working days post year-end by attending my course Quick month-end reporting.
Julius Caesar gave us the calendar we use today. It is not a good business tool because it creates 12 dramas a year for the finance team and budget holders, with each month being slightly different.Between three and five months every year will end on a weekend, and finance teams often find that the month-end processes are smoother for these months. Why not close off on the last or nearest Friday/Saturday of every month like many US companies do? The benefits of this include precise four or five week months, which make comparisons more meaningful. This also means that there is less impact on the working week as the systems are rolled over at the weekend.Otherwise every month is a drama because we close on a different calendar day. Every month we have to issue detailed instructions to do on Thursday what you did on Wednesday last month.Closing off at the weekend can be done for all sectors; some will require more liaison than others. It would also make a big difference in the public and not-for-profit sectors. You simply present June’s result and balance sheet to the board. You do not need to highlight the 2 July close. At year-end the missing two or extra two days of income and balance sheet movement will be taken up in the auditor’s ‘overs and unders’ schedule.By making this change you are beginning to create 12 non dramas a year, the El Dorado of all corporate accountants.Action:Contact your general ledger provider and ask who uses your G/L and closes on a set day each month. They will link you to them and you will see at first hand the benefits.Choose which day. It is best to be the nearest rather than the last ‘Friday’, ‘Saturday’, ‘Tuesday’ to month end etc. The last Saturday can have you closing six days before month-end, whereas the preferred option of nearest Saturday will only be a maximum of two working days out. Once you do this you will see how easy and beneficial it is!
Why do we, as accountants, need to see our emails 24/7? Are we that important that looking at our emails at the weekend is essential? Nobody dies, or is at the risk of death because we have not looked at our emails. And looking at emails first thing in the day is the most destructive habit you can have. You have guaranteed losing, forever, at least one hour, going nowhere quickly.Action:For eight weeks take up this challenge. Look at emails two or three times during the working day and never before 10.30am. Eliminate weekend email correspondence. After that time you will thank me!
LinksDavid Parmenter website