January is “in the books” as they say. How’s the month end coming?
This isn’t a month-end tirade. Instead, I’m feeling nostalgic so I thought I would share a story from my past. It’s been some time since I’ve been subjected to the time pressure of month-end & period close activities. For as much accounting has its common elements, every company’s month-end experience is different. I’ve worked for a number of different companies in a number of different sectors, and no two were the same.
One of the things about Accountancy, and it’s often cited as one of the profession’s advantages, is the ease with which one can move between industries. The common elements enable it; bank rec’s, financial statements, “the binder”, you know the drill. I think this is true to a point; however, I have also noticed that we can build up domain expertise as well as anyone in an organization. I’d be interested in hearing your thoughts on this bit.
Today, I’m thinking about some work I did for a mid-sized media company here in Vancouver. I was brought in as a chair-warmer Analyst while the company restructured and relocated its back office to Toronto. My predecessor had jumped ship early (before his job was scheduled to disappear), but Toronto wasn’t quite ready to steer the department so the local Controller (who was also on the block) needed someone to wait it out with him.
This was not one of those nightmare month-ends ( I’ll save my nightmare stories for closer to Halloween… and maybe April Fool’s).
I had some pretty standard stuff to do; the bank rec wasn’t pretty, standard payroll auditing for a few hundred employees, a systems conversion meant that we had to chase down some entries that got dropped from one of the back office systems, and then there were the Revenue Reports for the managers. The Controller did all the financial reports. He would often describe his month-end consolidations style as the brute force method. He understood 1) the importance of having a process and 2) the tenacity that is a requirement for the profession.
I’m going to focus on the Revenue Reports for the managers that were part of my month-end process. I would collect data from the accounting system, from the system that recorded the advertising sales, and the system that generated the physical page layouts (capacity). This business has a number of publications being produced. Each publication required a report. After which, the completed reports were emailed and yes, were printed, for each of the managers.
You’ve probably guessed buy now that I put all of this data into a spreadsheet. Thinking back, could the company have benefited from Indicee? It probably would have taken a bit of work to set it up and the reports would have looked a bit different, but Indicee probably could have provided the information I was putting into these reports. But that’s not what I want to tell you about.
I want to tell you about how I learned the process of completing these reports. The incumbent, clever fellow, had developed his process for these over a number of years and in relative isolation. He had it down to a science; but, all that knowledge was locked up in his head. When he walked out that door, the process walked out the door with him. Typical in mid-market companies. Documentation on complex processes that have evolved over time tends to be weak. In this case, the damage would be shortlived because these reports were being killed when the head office transition was completed. In the meantime though, I was left to decipher and de-engineer the reports and get them out to the managers.
To the point:
In the course of my investigation, I found that neither my boss nor some of the other managers actually knew what large parts of the reports meant! Or why they should care! The process of creating the report, even with practice, was big. Why was I going through all of this if the end users had no clue what I was giving them? Why had my predecessor done so over the course of a number of years? A pretty big portion of the reports were just wasted effort.
My theory is that reports evolve over time. This one had evolved, but it hadn’t “lost it’s gills” so to speak. It was standing upright and talking, but it had a tail.
http://www.cafepress.ca
Tightening up your month-end throughput means recognizing the Darwinian nature of your reports. Questioning your end users, your internal customers, is key to understanding what parts are no longer relevant. You’ll need to be persuasive within your organization in order to overcome the natural tendencies toward the status quo. Be prepared to quiz people. This part is easier said than done, but with tact and a collaborative attitude gains can be made. I suggest using the analogy of accounting as a manufacturing process.
Month-end, like any good manufacturing process, needs to be free of waste.
It’s a question of throughput.
That’s my story for today. For more on stories, I recently produced a guest blog post on the Sage Peachtree Community site called, The Importance of Stories. Don’t worry, month-end will be there when you get back.
Enjoy.
Caught in the echo chamber of 
When they say “custom-built”, they are talking about in-house, from scratch software – think some proprietary system no one’s ever heard of. Purchased applications would range from Quickbooks to SAP. Imagine. I feel like this is something that entered the course curriculum at its inception back when code was being written using Hieroglyphics. Am I wrong?
