Page 13 - Accounting Best Practices

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Introduction
2
with no approval or oversight from above, resulting in a multitude of beneficial
changes. Thus, best practices are a linchpin of the successful corporate strategy,
and can also lead to improvements even if they are not part of a grand strategic
vision.
The scope of this book does not encompass all of the best practices that a
company should consider, only those used by the accounting department. This
area is especially susceptible to improvement through best practices, since it is heavily
procedure-driven. When there are many procedures, there are many opportunities
to enhance the multitude of procedure steps through automation, simplification,
elimination of tasks, error-proofing, and outsourcing. Thus, of all the corporate
functions, this is the one that reacts best to treatment through best practices.
Chapter 2 covers a variety of issues related to the implementation of best
practices, such as differentiating between incremental and reengineering changes,
circumstances under which best practices are most likely to succeed, and how to
plan and proceed with these implementations. Most important, there is a discus-
sion of the multitude of reasons why a best practice implementation can fail,
which is excellent reading prior to embarking on a new project, in order to be
aware of all possible pitfalls. The chapter ends with a brief review of the impact
of best practices on employees. This chapter is fundamental to the book, for it
serves as the groundwork on which the remaining chapters are built. For example,
if you are interested in modifying the general ledger account structure for use by
an activity-based costing system, it is necessary to first review the implementa-
tion chapter to see how any programming, software package, or interdepartmental
issues might impact the project.
Chapters 3 through 17 each describe a cluster of best practices, with a func-
tional area itemized under each chapter. For example, Chapter 8 covers a variety
of improvements to a company’s commission calculation and payment systems,
while Chapter 17 is strictly concerned with a variety of payroll-streamlining
issues related to the collection of employee time information, processing it into
payments, and distributing those payments. Chapter 13 is a catchall chapter. It
covers a variety of general best practices that do not fit easily into other, more
specific chapters. Examples of these best practices are the use of process-centering,
on-line reporting, and creating a contract-terms database. Chapters 3 through 17
are the heart of the book since they contain information related to nearly 300 best
practices.
For Chapters 3 through 17, there is an exhibit near the beginning that shows
the general level of implementation cost and duration for each of the best prac-
tices in the chapter. This information gives the reader a good idea of which best
practices to search for and read through, in case these criteria are a strong consid-
eration. For each chapter, there are a number of sections, each one describing a
best practice. There is a brief description of the problems it can fix, as well as notes
on how it can be implemented, and any problems one may encounter while doing so.
Each chapter concludes with a section that describes the impact of a recommended
mix of best practices on the functional area being covered. This last section