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10–11 ELIMINATE REPORTS Filing Best Practices
Most companies are awash in reports. Typically, someone asks the accounting
department to generate a report, which it does—and continues to do for the fore-
seeable future because no one has told it to stop doing so. The majority of these
reports are really only needed once—perhaps to check on the profitability of a
specific product line, or the cost of a service, or the usage of some equipment.
Even though their usage is limited, the accounting department continues to churn
them out and distribute them because the recipients are not aware of the cost of
creating them. A further problem is the distribution of the reports. It is common
for someone who does not realize the expense of distributing a report to have it
sent to everyone in the company who might use it and to many who most cer-
tainly do not. Over time, the accumulation of, in many cases, hundreds of reports,
and the enormous distribution lists creates a startlingly large filing burden. Not
only are these reports stored, in case someone needs them, but they are distrib-
uted, and it is the job of the filing staff to do both things.
The solution to the reports problem is to reduce the number of reports as well
as the number of recipients, but the method of implementing this best practice is
worth some careful consideration. A common approach is to simply stop distrib-
uting reports and to see who complains. However, this is not a very astute politi-
cal move by the controller, since an abrupt halt to reporting can irritate the heads
of any departments who are receiving the information. Instead, it is better to use
the following steps:

1. Issue a list of outstanding reports and distributions. Sometimes it is suffi-
cient to bring to the attention of other departments the extent of the report list
that is being used. If issued along with a list of report recipients, as well as a
plea from the controller to review the lists and cross out any reports and
recipients that are no longer needed, it is usually possible to put a consider-
able dent in the accounting department’s reporting and filing chore.
2. Notify recipients of the cost of reports. If a simple notification of the number
of reports does not result in any significant change, it may be necessary to
notify management of the total cost of creating and issuing those reports. If
the cost is considerable, the management team may authorize the elimination
of several additional reports.
3. Combine reports. Once the report list has been pruned with the previous
steps, it is time to interview the report recipients and see what information on
each report is actually being used. It may then be possible to combine the
data on several reports, resulting in fewer reports that are really needed. For
many companies, these first three steps will bring about a sufficient reduc-
tion in the number of reports without having to proceed to the final two steps.
4. Charge recipients for reports. If there are still a number of reports left to pro-
duce, it may be necessary to charge back the recipients for the cost of both