Getting to Phase 2

How much of Excel do you use?

• If you spent a little more time designing your key spreadsheets so that all of the calculations were consistent and the data flowed in a logical way, could you produce more effective reports?


• If you learned a little more about graphing or pivot tables, could your presentations be a little more powerful?

Most accountants I know freely admit that they just scratch the surface of what Excel can do.

Now, what about your accounting system?

That's what I mean by Phase 2: the time when you take a hard look at how the system is being used versus what it's capable of. How much of the initial plan got implemented? How much of it was deferred because of time or budget constraints? Back in the heat of dealing with all of the issues of going live on your system you had to make some compromises to get the system up and working. What about taking some time now and revisiting those decisions? Pull out a list of the features that were identified as "nice to have's" and start to think about implementations.

Phase 2 has been a theme in this blog since its inception. This year, I was asked to write about it for CA Magazine, the voice of Canada's Chartered Accountants. You can find the article here. In it I list some Phase 2 project ideas to help you get started.

In this blog, I would like to talk about a key Phase 2 relationship - you and your consultant. Most accounting systems are implemented by consultants. They have the technical training to set up the system, import the history and train the staff. If you have been live on your system for over a year, you should have someone back for a post-audit. They can take a fresh look at how your staff is using the system and suggest:

• Features in your current system that are not being used effectively,


• Features that you have paid for but which have not been implemented,


• Features that you could use but don't currently have,


• Software upgrade timing,


• Procedures that could be streamlined or made more effective, and


• Answers to questions / problems the staff have but have not voiced.

Depending on the size and complexity of your system, a post-audit can be as quick as two days - one for analysis and one for reporting.

BUT

A lot depends on the qualifications and experience of the consultant. If you don't have someone you trust and who knows your business / industry, then your first task should be to find one.

Oh, and if you would like to improve your Excel knowledge, let me recommend Chris Wood (aka Captain Excel).

What Makes You Proud of Your Company?

This blog is all about energizing accounting staff by providing them with the best use of their accounting system. You will be a more productive, more effective team member if your tools save you time rather than getting in the way. But, on a deeper level, even the best tools are not enough to motivate you if you're not proud of where you work.

I am proud of the work my employer does in disaster relief both locally and globally. As an accountant, I am particularly proud that we can say:

As always with United Church emergency appeals, 100 percent of all donations received will be committed to support relief and reconstruction work for people in need. There is no administration fee deducted. This is made possible thanks to the generous ongoing support of United Church members to the church’s Mission and Service (M&S) Fund. Contributions to M&S allow the United Church to absorb the staffing and operating costs of processing donations for emergency appeals.

The situation in Haiti and other Caribbean countries is serious. Hurricanes Fay, Gustav, Hanna, and most recently Ike have left as many as one million Haitians homeless and more than 500 dead. Serious flooding was reported in many areas, and the country's agricultural capacity is again weakened.

The Accounting Department is rarely in a position to save lives, but if we can reduce the cost of administration so that more money is available to the people who can, then we have played a valuable part.

Picture Credit

Energizing the Staff

If I were to create an EnergizedAccounting award, the first recipient would have to be Julie Kinkaid, a staff member of the Stewardship unit in the United Church of Canada. Charities typically have more worthy projects than funds, so staff have to "do more with less". In an atmosphere where the resources are always being stretched, people need something to re-energize them.

This year, Julie and her team decided to kick off the fall fundraiser with a little pizzazz. She also wanted to emphasize to staff just how the work of the church is funded as well as the rewarding ways the money is used. On the proverbial shoe string budget, she organized a week of events, such as a kick off (accompanied by some staff volunteer music), theme days where staff wore a specific colour, a knowledge contest, and a door decorating contest (see pictures). All emphasized the mission.

Just as in the for-profit world, all employees are ambassadors for their company, in the not-for-profit world, all staff are fundraisers. This is not to say that they all actually ask for donations, but they need to actively support the charitable mission and be prepared to talk about it to people they know or meet. What better way to help people reconnect with the mission than having a little fun at the same time?

What I loved about this campaign was that it involved EVERYONE, even the accounting department. The door above was decorated by people in one of the church's program areas. The door below is a virtual door, but real in the sense that it is where the money comes through: it is the workstation in the accounting department where the donations are processed.

Whether you are for-profit or not, the accounting department needs to be recognized and made to feel a part of the organization's mission.

Brag Bag Now Open!

Chris Brogan, a social media expert, just tweeted about a great concept called the Brag Bag. Every Friday Becky McCray, who runs SmallBizSurvival blog, posts an article encouraging people to add a comment about something they're proud of. Some people talk about personal accomplishments. Some people brag about what friends or co-workers have done. Others just leave a high-5 to the other people who left their comments. The result is an energetic, positive tribute to the human spirit.

Hmm, maybe Becky should consider opening the bag on Monday mornings, when we could all use a little lift.

Accounting is an area with many unsung heros, people who go that extra mile for others, but who often don't get any public recognition, so let's do the same thing. If you have overcome an obstacle, tackled something new or would like to recognize someone else who has, please add a comment to this article and tell the world!

[Edit - Correction per Chris Brogan.]

Accounting 501: Be Nimble

The only time my father's employer changed was when his firm merged with another, whereas I have had several employers, including myself. I didn't plan it that way. In fact, I had every intention of staying with my first employer until I retired. But my generation was the one that coined the phrase negative growth, and so many things have happened in my career that I never expected:

• International accounting firms laying off staff - It was the early 80's, before all of the mergers that turned the Big 8 into the Big 4.


• Competent managers being counseled out - There was little room in the partnership, and it was either up or out.


• Prosperous companies stumbling - During the job interview process, it never occurred to me to do a credit check on my employers. In hindsight, I should have.


• Administration is an economy of scale - When two firms merge, the accounting department is one area where the new owners look for staff reductions.

As accountants, we have some advantages:

• Transferrable skills - Allowing for regional and industry differences, accounting is pretty much the same the world over, if you keep up to date on your professional development.


• Close to the truth - You know how well the business is doing. For example, when the owner of a company injected more personal funds to keep it going, I knew long before the other employees that we were in trouble.

Bottom line: be nimble. You have to be ready to change jobs at a moment's notice. Here is some of the hard won advice that I have received along the way.

1. Update your resume - At least once a year, update your resume, ensure you can contact at least three references and think about what you would like to do if your job ended suddenly. This advice came from a manager who thought he had a secure position until he was told that there was no room for him in the partnership.


2. Be business driven - If you are seen as being Administration, then you are expendable. If you are seen as being an integral part of Operations or Sales, then your position is much more secure. This advice came from a manager as our company was being reorganized from an independent unit into little more than a sales office.


3. Specialize - I had a hard time convincing a computer consulting firm that I could go back to consulting after having been a corporate Controller. The advice the partner gave me was pick an industry or a software package, but you have to specialize.


4. Constant learning - An interview question that lost me a job was, "What was your last professional development course?"


5. Do the right thing - I have been following the Livent accounting fraud case. The accusation was that the owners, "Drabinsky and Gottlieb operated a kickback scheme with two Livent vendors which siphoned approximately $7 million (Cdn) from the company for their personal benefit". The defense has been trying to prove that the fraud was perpetrated by the company's accountants without the owners' knowledge. Even though there have been no allegations that the accountants made any substantial personal gain from this fraud, clearly their lives and careers have been affected.

I wish I knew how to handle the last point. What do you do if you suspect your employer is defrauding the company? There usually isn't a smoking gun. It's usually more a case of suspicions and trying to understand people's motives. Fraud and incompetence can look very similar in the heat of battle. Of course you should get out of there fast, but the reality is that it can be extraordinarily difficult to find another position quickly. Unless you've learned to be nimble, that is.

Motivate Your Team

“I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.” In how many MBA classes, inspirational business speeches and management books has this speech by American President, John F. Kennedy been touted as the perfect motivational mission? (Example 1, example 2, example 3).

The latest to cross my desk is an article by Bill Catlette and Richard Hadden called “Motivation through Mission”. Their key concept is, “People don’t perform in an inspired manner without a big time commitment to a compelling cause.”

It’s hard to argue with that, but consider this example. Let’s say you’re the head of an accounting team and looking ahead to 2009. You have the monthly grind of accounting statements and management reporting ahead of you. In addition, there are the budgeting and audit cycles. You are midway through a computer implementation that has been delayed due to problems converting the history, and you have to change the whole General Ledger to the new International Financial Reporting Standards. What is the compelling cause you need to get your people to perform in an inspired manner?

Catlette and Hadden’s response is, “Whether your team competes on the global stage or a three-unit cube farm, they will move faster, get more done, have more fun, and make more money if all hands on deck share a common sense of purpose and direction. Make it your business to see that they get it . . . really get it.”

Forgive my cynicism, but I have seen this all before. I had a client in the insurance industry where all of the rooms had large motivational posters, but the staff plodded through their jobs like zombies. There was no shortage of messaging proclaiming the common purpose. The issue was that there was no buy in from the employees below manager level.

How do you get buy in? How do you motivate someone? The first thing you have to do is pay attention to the emotional conversation in the room. To borrow from Stephen Covey, “Seek first to understand, then to be understood.” Start by abandoning the idea of motivating a whole team and focus on the individuals. Simply put, if you really care about each one of them, they will really care about you. If you pay attention to their agenda, they will pay attention to yours. If you are honest with them, they will eventually be honest with you. I say eventually because it may take them a while to trust you.

This conversation does not have to get too “touchy feely”. It can be limited to the job. You don’t have to take on someone’s personal problems, but you need to address their professional ones. The only way to find out what’s on their mind is to observe them and ask open ended questions. Notice when they come through for you and each other. Encourage them. Ask them what roadblocks they face.

Actually, just the feeling that someone notices and appreciates what you do can be enormously motivational. I was involved in a computer conversion where the old system was a card based “automatic” bookkeeping machine which belonged in the Smithsonian. We couldn’t convert the data. It had to be re-entered. The two women in the data entry department gamely took on this huge task and managed to convert a month’s worth of data every week until it was done. It being an Olympic year, I got some ribbon and those large chocolate coins in foil to make two gold medals, which we presented to them at a staff meeting. Afterwards, I worried that the whole thing had been a little hokey, but my boss said, “Look what they did with the ribbons.” Sure enough, both of them had pinned the medals up prominently in their workstations.

I have written before about being on a little team with big ambitions, and I have to agree with Catlette and Hadden that putting everything you’ve got behind an ambitious project (or a “Big Hairy Audacious Goal" as another consultant calls it) energizes a team. Just make sure they feel like a team first.

The Passionate Accountant

On Sunday I attended the annual meeting of a church in a well to do part of Toronto where I am not a member. The person in charge of fundraising got up and said that the central church had not reached its fundraising goal last year and was asking for a 3% increase in givings. A motion was immediately passed to increase the donations to the central church. Only two people voted against the motion, both (as I learned later) accountants.

The Treasurer then made a presentation about the financial statements and the budget for next year. He pointed to the large amounts transfered from the reserve fund into the operating fund. He said the church would not be receiving the investment income it was used to because the investments had been sold. He talked about the serious deficit and how the finance committee had a three year plan, which involved cutting some popular church events, to eliminate it. Suddenly I realized why the accountants voted against the increase to the central church: the local church couldn't afford it. They see this as a major issue. The church is living beyond its means. It was a call to action.

Unfortunately, as I surveyed the faces of the audience, I don't think the message got across. People are very good at tuning out the drone of accountants who talk about replacing the roof or repairs to the boiler. Accountants pride themselves on their objectivity and their lack of emotion.

This was the time to be passionate.

This was the time to say to the members that $800 per family average giving is just not good enough. The people in the room would think nothing of paying $200 per month for a family membership in a fitness centre, yet they do not give nearly that much money to the church that does so much for them. Accountants are not bible thumpers or sermonizers by nature, but the times have changed.

The church cannot cost-cut its way to prosperity.

People must be made to understand the seriousness of the situation and put all their weight behind the solution. We are like a people losing our culture and heritage in a new world. We must take extraordinary steps to maintain our way of life. The accountants in the room know the reality. They need to learn how to communicate their message effectively. They need passion.

French Bank Loses $7.2 Billion

Did you hear the one about the rogue trader who cost a French bank two years worth of profits? These days, it's nothing new. We seem to hear about people routinely circumventing companies' control systems and causing an uproar, whether for personal gain or not. One part of the news coverage caught my attention though:

Kerviel shocked and impressed executives with the complexity and scale of his trades. Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks.

Kerviel (the rogue trader) appears to have had inside knowledge that he used to his advantage. This bald statement flies in the face of the reason for internal controls. Every employee should understand their employer's control systems. The problem is that people rely on the "systems" rather than taking personal responsibility. I'm willing to bet that the knowledge Kerviel used focused more on knowing which people would approve his trades without looking at them than at uncovering some hidden weakness in the system.

As a manager I worked for once commented, "computers do not control people, people control people". It doesn't matter how good the system's reports are if people don't look at them and act on them.

Think of that the next time someone from accounting sticks a pile of 50 payments on your desk for your signature. By signing them you are saying "I agree." By initialing the work of a clerk in your department you are saying, "I agree". Think I'm exaggerating? Next time you're standing in line at the bank, watch a junior teller take something to their supervisor for their initials and watch how much attention the supervisor pays to the transaction.

Then take a look at your own organization. In an energized system, everyone understands their responsibility and fulfills it.

Smile!

On page B5 of today's Toronto Globe and Mail newspaper is an announcement by UBS Investment Bank. It caught my eye because of how glum the three executives pictured appear. The announcement is for the promotions of Jim Estey, Rick Meslin and Alain Auclair, something you would think would make them smile.

The same paper has a clue as to why these men aren't happy:

GENEVA -- Swiss bank UBS AG, already writing down the value of some assets by $3.4-billion (U.S.), warned investors yesterday that its fourth-quarter results may be hit by a further downturn in the U.S. housing and mortgage markets.

but I would argue that now, more than ever, is the time to be showing some energy. Maybe a sunny smile conveys the wrong message, but they should at least be displaying steely resolve or iron determination.

The leader's attitude has everything to do with the success of the organization. This is just as true for your internal team as the external shareholders. If you can't see your way through to a better future, then start planning until you do. While business is all about being objective and hard headed, leading is all about inspiring and energizing the team. This may be particularly difficult if you are introverted or not a people person, but it is vital to your success. If you can't be the cheerleader for your team, find someone who can and work with them.

So, smile!

What Would You Do With a Half Hour?

Re-energizing the accounting staff is a major part of re-energizing your system. Here's a question to ask them: "What would you do if your work took a half hour less each day?" After you weed through the joke answers, you'll find people who have great ideas about addressing those important but not necessarily urgent tasks that are dropping off the list because of a lack of time.

Now, take those good intentions and strategize with the staff member about how THEY are going to recover that time. Look for ways that you can leverage your existing technology to achieve them. Make sure the strategy is documented on the employee's goals for their next review.

Result: they will feel empowered, listened to and more energetic. Oh, and you just might end up with a better accounting system!

Re-Energizing an Old System - Reporting

Businesses transform, sometimes daily. Accounting systems evolve.

How do you know whether your accounting system has fallen behind the business?

Reporting

1. Ask people if they use their reports.

   A client of mine acquired a small business in northern Ontario. They asked me to go in and review the accounting system. I worked with the local Controller and asked him if I could interview the General Manager, so we made an appointment. I asked her what she thought of the financial statements and her reply was classic, "Oh, I don't use them. Too many numbers." It was true. The accounting report was on legal landscape paper with a column for everything you could think of. All the information was there, but you had to analyze carefully to find it. The Controller was crushed. He had worked so hard to get everything into one report. Later he said to me, "If she had only told me, I would have given her what she wanted."
   

2. Don't wait for them to ask for new ones.

   They often assume that what they are getting are the only reports available.
   

3. Don't just accept what they say.

   Sometimes even when you ask they are not forthcoming or can even be hostile. I asked a production manager what would help him schedule jobs for the tool and die shop. His first answer was, "There's no way you're replacing me with a computer." That night I used a spreadsheet to make a mock version of the kind of report I had in mind. When I showed it to him the next day, he tore it apart. Why did I use the shop number? Customers always call using their P.O. number, etc. etc. But we had moved from discussing whether he needed a report to just what report would help. Eventually we found what he needed, and no, he was never replaced by a computer!
   

Reporting is the key because it supports good decision making. It's not just the reports, but also how they are formatted and how quickly they are produced.