Too Much Administration?

The American Institute of Certified Public Accountants (AICPA) is lobbying to remove the barriers to professional accountants working in multiple states. As they point out,

“Because the electronic age makes conducting business across state borders an everyday occurrence, a national effort is underway to adopt a uniform system that will allow licensed CPAs the ability to provide services across state lines without being subject to unnecessary burdens that do not protect the public interest.”

They go even further and say,

“This provision provides the right balance of trust and public protection. Removing notification is being coupled with automatic jurisdiction. By removing boundaries to practice in the U.S., CPAs will be able to more readily serve individuals and businesses in need of their expertise. At the same time, the state board of accountancy’s ability to discipline under the provision is enhanced and is based on the CPA and the CPA firm’s performance of public accounting services, either physically, electronically or otherwise within a state, rather than restricting the board’s authority to only those holding a state’s license.”

My question is why do we have state boards at all? If our goal is to protect the public, then the focus of the accounting profession needs to be international, not just inter-state. The state boards need to merge with the AICPA and become task forces of a united body, so that we can concentrate our efforts and present a united front. Yes, for historical reasons, the accreditation of CPA’s needs to be done at the state level, but in this age of instant communications, can’t we administer the program centrally?

Canadian Chartered Accountants face the same issue with the same results. We have the Canadian Institute of Chartered Accountants (CICA) nationally and provincial institutes such as the Institute of Chartered Accountants of Ontario. It just seems to me to be such as waste to have two levels of administration when one would work.

What do you think?

Nickel 'n Diming

Would you like an iron-clad, guaranteed way of annoying your clients and ensuring they think twice before calling you? A friend was venting this week about the bills he was getting from the firm supporting his accounting system.

"Every time I call them, they bill me for fifteen minutes. I've stopped calling them because I know I'll get an invoice, whether they know the answer to my question or not."

People don't like being "nickeled and dimed", i.e. seeing an invoice filled with little charges. They find it annoying and it leaves them with the feeling that they didn't receive value for their money. It can lead to their going through and questioning every line of every invoice, as well as a loss of trust in the relationship.

Here's an alternative: don't charge for telephone calls. You want your clients to call. In fact, I make a point of telling clients that I don't charge for telephone calls or emails if I can answer a question quickly. If their question is going to take some research time or I need to come on-site, then I'll tell them. That way the client feels in control. I also advise clients to keep a questions folder or error log for issues that are too minor for a special call. If I'm on-site for something else, I can address the smaller issues while I'm there. The result is that I get more focused time with the client and they see value in the consulting charges.

Here's another handy tip: if you can do the work in the client's office without incurring significant charges then make the trip. Even if you have to go out of your way, make an effort to put in at least the occasional appearance and make sure you get around and meet the people you know. You would be amazed the number of times you will hear, "I'm glad you're here. I've been meaning to call you . . . "

You won't miss those nickels and dimes when you can charge whole dollars!

Help a Young Career

"Here is what you should know if you want to get ahead . . . "

Did anyone ever take you aside and say those words to you? Me neither. Yet it used to happen all the time, back when people stayed in one company long enough that there was time to plan for the future. The older executive would take the new recruit aside and teach them the subjects that they never got in school: how to work within the system, how to form alliances, how to help one another other climb the corporate ladder.

So, what would you advise the bright young professional accountant who has just passed the exams?

I would advise them to join the Board of Directors of a charity. Why? It's not just that there is a crying need for professional accounting in the not-for-profit sector. It's also a fast way to get practical experience working with a Board of Directors. Charity Boards are welcoming. Board members have the patience to help you along. But you need to be strategic:

1. Choose a charity you believe in. Then it won't feel like work.
2. As a professional accountant, they will want you to be Treasurer. Accept the position for one term (usually 2 or 3 years) then actively recruit a replacement so you can move to another position and learn new skills.
3. Make sure you donate money as well as time to the cause. It increases your credibility.
4. Keep moving up, recruiting a replacement as you go. Always ensure you bring fresh blood into the organization.
5. Focus on how you can help others and keep relationships active. That's called networking.

Learning New Skills

The broader your skills, the farther you can go in your career. Professional accounting skills are a great base, but if you can add revenue generating experience, such as fundraising or grant proposals, you have a dynamite combination.

Networking

Networking is more than just passing your business card around at an event. It's about establishing and maintaining relationships. The best way to build a relationship is to help someone. The second best way is to ask for someone's help. Since there's no way to predict who will be able to help you in future, try to be helpful to a wide variety of people and see what emerges.

Dive In!

Some Board members take a passive role. They read what they are sent and respond. Others take a more active role. They research the organization's needs. They participate in planning. They take an active role in furthering the organization's objectives. That's the kind of Director you need to be.

Rewards

Charitable work is often called its own reward. That's true, but there is a practical side as well. The issues you face on a charity Board, such as prioritizing resources, dealing with personality conflicts, wading through government filing requirements and forecasting the political future, are exactly the same issues you face on the Board of a for-profit corporation.

So, go get 'em, Tiger! And remember to mention me in your memoirs.

Systematize / Projectize - Which?

Month end again. The normal processes kick into gear as we ensure there is a good sales cut off, the expense reports have been submitted, the banks reconciled and the overseas operations results are ready for consolidation. On the whole, month end is a well oiled machine where everyone knows what is expected of them. That's the mark of a good system, particularly if all of the processes have been documented and people check them off as they are completed.

Most of the work of the accounting department can be systematized, i.e. turned into a pattern of regularly recurring processes, but what about the surprises? You know, the President is looking at purchasing that little plant in Omaha, you need to have a Sarbanes Oxley review, the accounting software needs to be updated, the Chairman wants a five year forecast, etc. When the accounting staff have their hands full with the system, how do you handle these unpredictable requirements?

The answer is to projectize. Let's face it, even though nobody can predict what surprises lay in store for you next month or next year, you know for certain that they will be there. Why not include them in your planning?

Personal Goals

You know some of the projects that have to get done. In fact, some of them may have been waiting a long time for someone to have enough time to address them. At a recent client, I commented on how enthusiastically one of the staff had taken to the new reporting software. "That's because the new Controller included it in her personal goals for the year," the Assistant Controller said.

"Great," I replied. "What's your goal?"

"Clean up the GL," she said, with a sad smile. It was a big job.

Delegating projects to people is good, but that's only just the start.


Resources, Tools & Time

Of the three techniques available to a project manager, finding the time can be the hardest. Whatever else you do, the accounting system must be maintained. On the other hand, project work can be fun. It's a break from the routine. People get a chance to learn new skills and work independently. What better way to prepare someone for their next career step than to give them a project to manage?

In my experience, the best way to make room in the schedule for project work is to be open with the team about what you are doing. Then enlist their help in finding faster ways to do the normal work, such as automating or eliminating manual processes, getting transactions booked properly the first time rather than adjusting them at month end and reducing any duplications between separate systems. If the whole team is motivated to save time, the results will be much better than a solo effort by you. You might have to make it clear that your objective is only to save time, not to reduce headcount.

Resources and tools are other issues that you have to address. Your team members may need training to take on the projects, whether a formal course or coaching from someone more senior. An outside consultant may be necessary, but encourage your team to work independently. Have them create a project plan and come back to you with any additional resources they think they need. Finally, insist on regular updates and status reports. After all, as head of the department, you are still responsible for delivering the goods.

So, should you systematize or projectize the accounting department? The answer is: both.

Spring Cleaning

Okay, I was not cut out to be a gardener. How do I know? I was raking last year's leaves from the garden when I realized that this year's crocuses had already sprouted, flowered and died. I never saw them because they couldn't get through all the dead leaves. Time for spring cleaning!

Is there any dead wood in your accounting system? When the year end is done and the audit over is a good time to look at the system and decide if anything needs to be tweaked.

Lessons Learned

A great tip from the world of project management is to have a Lessons Learned session with the team where you go over a recently completed project (e.g. the audit) and ask what everyone would do differently in a similar future situation. This is not a finger pointing or blaming exercise, in fact great care should be taken to emphasize that the session is about the future rather than the past. If people are open about their experiences, a lot of good can come from these sessions. To get more value from the meeting, arrive with a few open ended questions to get people talking. To continue with the audit example you might ask:

1. Did anyone have to create a manual spreadsheet that we could have the system produce if a change was made to the chart of accounts?
2. Could any of the auditors' requests be combined so that two requirements could be completed at once?
3. What could the auditors have done that would have achieved the same results more effectively or efficiently? (They need feedback as well.)
4. Could the timing of any of the audit be improved?
5. Was anything else dropped as a result of the extra work required for the audit?

Another candidate for spring cleaning is financial reporting. Governments, regulatory authorities and operations managers often require more detailed information. Ask if it would be possible to produce this information more quickly or effectively with a change to procedures or to the accounting system setup. You would be amazed at how often issues like this go unexamined until someone comes along and stirs things up a little.

Just like the leaves in my garden.