4 min
Head of the Accounting Department Service Group, BDO Unicon Outsourcing
Oftentimes, the costs of the accounting department’s business processes may be quite high. Veronika Arakelova (BDO Unicon Outsourcing) shares her insights on the ways to address this problem.
1. MONITOR THE ACCOUNTING DEPARTMENT’S PERFORMANCE
Start by making sure that internal processes are efficient and accurate. Tax audit is among the most important control tools. Tax risks are the most serious risks among the pitfalls that a company may encounter.
Failure to identify them attests to major issues with the accounting department forcing the management to investigate the root causes: employees’ incompetence, failure by production units to provide the accounting department with necessary information in a timely manner, or conflict between managerial decisions and laws.
2. OPTIMIZE IT-TOOLS
Typically, use of outdated accounting software is the primary cause of excessive labor inputs in accounting departments.
Subject the software products used by the company to expert review and check the market for new releases. You may have overlooked advanced automation tools that make it possible to cut labor inputs and improve data recording speed and accuracy.
3. SYNCHRONIZE UNITS’ OPERATIONS
Give attention to the processes both in the accounting department and in the related units responsible for supplying it with necessary data and documents. For instance, the accounting department may underperform due to delayed provision of information by production units.
The management in a certain company found out that two different software products were used for management and financial accounting. As a result, two departments used to enter similar data to different software programs at the same time.
This problem went beyond higher costs due to duplication of work in two different modules. In addition, it inevitably led to discrepancies in the data presented: for instance, if the departments processed a different number of documents or made errors in data. As a result, the discrepancies between the financial statements and management reports proved critical.
The company automated exportation of data from the accounting database to the management accounting software, which made it possible to save on labor inputs and optimize staff numbers. The management became able to obtain more accurate information, which in turn improved the efficiency of tax planning.
4. CHECK YOUR EMPLOYEES’ SKILLS
Oftentimes, problems are due to the fact that the accounting department employees lack the necessary experience and information. As a rule, internal accounting is sealed off from innovations in financial practices related to legislative changes and various updates. This information may be unavailable in public sources, and therefore, professionals may fail to obtain it.
This is the reason why the company management should take ongoing effort to raise employees’ awareness by providing them with advanced training opportunities, extending continuous support to the methodological department, and conducting regular audits in order to detect problems promptly.
5. ENGAGE A COUNTERPARTY FOR AN APPRAISAL
The responsibility for the organization of business processes rests with the company’s management. However, if the management realizes that the accounting staff costs are excessive, it should engage external specialists in order to (at the very least) appraise the professional skills of company employees and examine all processes that could have impacted the situation.
Accounting is an area where a certain level of professional experience and expertise (normally, unavailable to the owners of the company) is absolutely necessary to appraise employees’ performance adequately and calculate the staff numbers required for the job. Oftentimes, problems are specifically due to sub-optimal pattern of business processes that cannot be restructured without a non-biased external opinion.
Besides, the company’s regular employees are busy with the current tasks that are sometimes scheduled for a half-year ahead and they may lack the time to focus on the ways to improve the processes they use on a daily basis. In addition, neither these employees nor the company management have a strong background in monitoring diverse management models available to the professionals engaged in business process optimization.
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