Many organizations fail to get the most out of their accounting systems. While the system may work its clear there is significant room for improvement. Most blame the software however in many cases the problem is the result of a combination of a flawed implementation and organizational changes that occurred after the implementation.
The reality is the software you already own and have installed has functionality that is not being used, is being misused and/or is not appropriately married to your processes. This presentation will discuss why your inefficiencies exist and what can be done to resolve them.
Learning Objectives
How can you get more from your accounting system?
How can you improve both your system and related processes?
How do you marry process, technology and best practices?
What are the key areas to focus on?
Significant improvements can be accomplished by:
Properly utilizing built-in functionality
Implementing unused functionality
Marrying day-to-day processes to the system
Applying the appropriate process best practices
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Improving Inefficient Accounting Systems By Tom Sonde CPA
1. Improving Inefficient Accounting Systems
Facts Senior Management Should Know
NYS Society of CPA’s
Technology Assurance Committee
Tom Sonde, CPA
2. Why Isn’t the System Delivering on it’s Promises?
Is this Occurring in your Organization?
Simple tasks take too long to complete
Too much time is spend validating data
Employees, vendors and customers constantly complain
Too much paper is being used
There is a significant amount of manual data keying and
rekeying
2
3. Why Isn’t the System Delivering on it’s Promises?
Is this Occurring in your Organization?
Information is not easily accessible
Workarounds, renegade processes and spreadsheets exist
External databases / data warehouses supplement the
system
The promised Return on Investment never materialized
Does senior management even realize how many of the
inefficiencies have been institutionalized?
3
4. There is a Gap Between what the Software
Developers Intended and what you End Up With
“The System Can’t do That”
“The system can’t do that” may mean:
The software does not offer that functionality
- or -
“It can, but it would require some effort to make the changes
and I have more important things to do”
- or -
“I don’t have a clue if it’s possible”
4
5. Accounting & Finance Systems
Unlock the Hidden Value
Unlock the hidden value hidden
– Without creating the upheaval of an
implementation
– Without bringing in an army of consultants
– Without spending millions of dollars
Achieve a positive Return on Investment
5
6. Why isn’t your System Working the way it’s
Supposed to?
System Not Delivering
Many system issues are not the result of the software.
6
7. Why isn’t your System Working the way it’s
Supposed to?
System Not Delivering
Many system issues are not the result of the software.
They were caused by a flawed implementation.
7
8. Implementing new technology does not guarantee
efficiency
Teacher
After data is Based on the type Custodial - Plant
completes Principal or Dept. School clerk
entered, Non site-based budget of purchase, Operations
requisition form or Head approves enters data into
requisition will be purchases goes to an requisition is
fills out pre-printed and signs system from Teacher
funneled into the approver initially routed to one of Exceptional After data is Based on the type Custodial - Plant
list for items requisition requisition completes Principal or Dept. School clerk
following the following:(1) Children Division entered, Non site-based budget of purchase, Operations
needed requisition form or Head approves enters data into
requisition will be purchases goes to an requisition is
fills out pre-printed and signs system from
Site-based budget purchases Applied funneled into the approver initially routed to one of Exceptional
list for items requisition requisition
go directly to Finance Technology following the following:(1) Children Division
needed
Career
Purchases from a contract Development Site-based budget purchases Applied
Type A
company or pre-printed list go directly to Finance Technology
Finance Dept. (2) Career
Library Services Purchases from a contract
Purchases not from a contract Type A Development
company or pre-printed list
Type B company or pre-printed list Finance Dept. (2)
regardless of price Chief Academic Library Services
Purchasing Dept/ Officer-Textbooks Purchases not from a contract
Senior buyers Type B company or pre-printed list
Senior buyers
review requisition regardless of price
receives Chief Academic
proof, checks for Teaching &
purchases in Purchasing Dept/ Officer-Textbooks
errors (4) Type 2 Learning Assmt. Senior buyers
"requisition proof" Senior buyers
review requisition
receives
proof, checks for Teaching &
purchases in
errors (4) Type 2 Learning Assmt.
Interscholastic "requisition proof"
Buyer requests Requisition proof
Other purchases
quotes/bids from is generated from
are routed to a Buyer receives
New Technology
vendors (fax, mail, information
buyer - based on buyer's copy Supplemental Interscholastic
or phone) Request entered into Buyer requests Requisition proof
assignment Funds-Budget & Other purchases
for Quotation form system quotes/bids from is generated from
Management (3) are routed to a Buyer receives
If errors Type 1 vendors (fax, mail, information
buyer - based on buyer's copy Supplemental
If no errors found are found or phone) Request entered into
assignment Funds-Budget &
on requisition proof for Quotation form system
Management (3)
If errors Type 1
If no errors found are found
Purchase order is Senior buyers will on requisition proof
generated from the correct errors and
requisition proof another proof is
the next day Brown/yellow copy generated Purchase order is Senior buyers will
Finance Dept. generated from the correct errors and
sent to school Vendor receives
matches invoice to requisition proof another proof is
(brown copy is PO and ships
receiver's report the next day generated
receivers report) order to school Brown/yellow copy
Purchases orders Finance Dept.
Buyer signs and sent to school Vendor receives
printed at Senior buyers matches invoice to
Blue copy sent to dates PO; sends (brown copy is PO and ships
Southside location separate POs (5 receiver's report
Controllers Office to vendor by mail receivers report) order to school
and delivered to copies) Purchases orders
or fax Vendor sends Buyer signs and
Admin Bldg. System generates printed at Senior buyers
invoice to Finance Blue copy sent to dates PO; sends
payment when Southside location separate POs (5
White PO copy Dept. Controllers Office to vendor by mail
both invoice and and delivered to copies)
routed back to or fax Vendor sends
receiver's report Admin Bldg. System generates
original buyer invoice to Finance
are entered into White PO copy payment when
system Dept. both invoice and
Orange copy kept School confirms routed back to
original buyer receiver's report
on file at purchase by
are entered into
purchasing office sending receivers
system
report to Finance Orange copy kept School confirms
Dept. (5) on file at purchase by
purchasing office sending receivers
report to Finance
Dept. (5)
Inefficient New Inefficient
Old Process Technology New Process
8
9. Successfull Implementations Address both Process and
Best Practices in addition to the Technology
Best Practices
Technology
Process
The Foundation of a Successful System Includes Process and Best Practices
9
10. Who’s to Blame?
Why Doesn’t your System Perform as Promised?
1 Project Implementation Team
2 Process Owners
3 Training
4 Consultants
5 Other
10
11. Why Doesn’t your System Perform as Promised?
Team not adequately represented by process owners
Project Project team didn’t have a true understanding of the underlying processes
Team Team assumed “built-in” Best Practices were all that was needed
Project lead was an external consultant who focused on the technology
Process owner requirements were based on the old system
Process Process owners had limited experience with large IT projects
Owners
The end-to-end process was not adequately addressed during the system design
Inadequate training was provided
Training Training was technology focused and excluded process issues
Training manuals and related documentation were inadequate
11
12. Why Doesn’t your System Perform as Promised?
Consultants understood technology, not your business
Consultants System knowledge resided with the consultants and was lost when they left
Consultants viewed the IT department rather then the end-user as their client
The project was sold on a fixed fee
Scope creep occurred
Other Not enough resources were available
Common The wrong resources were involved
Issues Resources were diverted to unexpected issues
There was an aggressive “go-live” date
Issues were addressed by postponing them - “It will be addressed during the
next phase or upgrade”
12
13. How Can you Improve your System and Related Processes?
To be effective
a system must
address:
• Process
• Technology
• Best Practices Accounting
System
TECHNOLOGY
14. Improvements are can be Achieved Across your
Organization
The methodology can be applied to any area or function
General
Ledger
Accounts
Billing
Payable
Budgeting HR Purchasing
14
15. Best Practices and System Functionality Knowledge
How do you obtain knowledge of Best Practices and
System Functionality?
Best Practices System Functionality
Professional organizations User manuals
Conferences Vendors web site
Other companies Books
Books Consultants
Consultants
15
16. Understanding System Functionality
System Functionality - What You Need to Know
You don’t need to become a technology expert
– You don’t need to understand the nuts & bolts
– You simply need to understand what it is capable of
You need to be able to speak intelligently with a systems
expert
– Is what your are asking for possible?
– How long will it take to complete?
– What will it cost?
– Will it impact other users?
16
17. Conduct Process Reviews
Obtain an Understanding of End-to-End Processes
Interview process owners (end-to-end)
Develop process maps
Understand inputs and outputs
Document requirements
Use your knowledge of system functionality and best
practices to develop improvement recommendations
17
18. Improvements are Easier to Address then an
Implementation
The Time Required For Improvement Varies
Improvements can be accomplished within a day or can
take months
– Quick hits
– System adjustments / Process realignment
– Significant changes
Usually the system work can be performed by in-house
staff or using contract labor
Implement quick wins to gain credibility and traction.
18
21. Accounting System Improvement Methodology
Understand Conduct
System Process
Functionality Reviews
Understand
Best
Practices
21
22. Accounting System Improvement Methodology
Understand Conduct
System Process
Functionality Reviews
Understand
Best Identify
Practices Opportunities
22
23. Accounting System Improvement Methodology
Understand Conduct Develop
System Process Future
Functionality Reviews State
Understand
Best Identify
Practices Opportunities
23
24. Accounting System Improvement Methodology
Understand Conduct Develop
System Process Future
Functionality Reviews State
Understand Quantify /
Best Identify Prioritize
Practices Opportunities Opportunities
24
25. Accounting System Improvement Methodology
Understand Conduct Develop Obtain
System Process Future Agreement /
Functionality Reviews State Funding
Understand Quantify /
Best Identify Prioritize
Practices Opportunities Opportunities
25
26. Process Reviews Uncover Opportunities
Look for opportunities to:
– Make an individual process more efficient
– Better utilize the system
– Apply Best Practices Process
Technology
Best
Practices
26
27. Improvement Opportunities - What to Look For
Obtain a through understanding of the process before developing training
Training Training should incorporate both process and technology
Training should be developed with the process owners skills sets in mind
Anyone that requires access to data should have the appropriate access
Ideally access should be provided electronically rather then on paper
Access to Data
Access to data should be timely
Reports should be developed with the user in mind
Review how process owners are using their reports
Reporting
Identify user needs that are not being met by current reports
Reports for routine activities should include all required data on a single report
27
28. Improvement Opportunities - What to Look For
Employees, vendors and customers should utilize system self-service functionality
Self whenever possible
Service Employees should take advantage of vendor provided self-service capabilities
Question why every piece of paper in a process is necessary
Paper Wherever possible replace paper with an electronic solution
Fully integrate all systems
Integration Require large volume vendors to provide electronic feeds
Invoice large volume customers electronically
28
29. Improvement Opportunities - What to Look For
User Manuals, Develop user manuals, policies and procedures that cover the entire process
Policies & rather then a “How to use the software” solution
Procedures
Ideally all data should be fed to the system electronically
Data Manually input data should never be keyed more then once
Input Eliminate manual forms by requiring staff to complete electronic forms via the
web or directly into the system using self-service functionality
29
30. I Challenge You to Try This!!
You’ll be Amazed at What You Find!
Set aside five to ten hours over the course of a week or
two
– Select a simple process area
– Sit with the process owners and review the process in detail
– Review the system documentation to understand the
systems functionality
– Identify best practices
30
31. Free “How to”
Helpful Hints for Improving the
Productivity of Accounting
Tom Sonde, Principal
(973) 722-9304
tsonde@silverroad.net
SilverRoad.net