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General Best Practices
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user access. The best approach will depend on a company’s budget, existing sys-
tems, and information distribution requirements.
Cost: Installation time:
13–12 TRACK FUNCTION MEASUREMENTS

The role of the accounting department does not just include completing daily
transactions and issuing financial statements. In addition, it must issue periodic
measurements to the rest of the company that show the results of key activities. A
poorly organized accounting department may issue this information only grudg-
ingly when senior management demands it and then stop immediately once the
complaints cease. This approach does not allow the accounting staff to derive a
set of standard procedures for the collection of measurement information, nor
does it build up much goodwill with the management team.
A better approach is to create a standardized set of performance criteria that the
accounting staff will calculate and distribute at set intervals. An example of such a
report is shown in Exhibit 13.5. By using this report, management can spot opera-
tional problems at once and correct them. Also, the controller can play a key role in
determining which measurements are used; this can be a pivotal item in some situa-
tions, for other department managers may not want to have their poor performance
measured and reported. Also, with a standardized set of measurements, the controller
can build the measurement task into the accounting department’s daily work sched-
ule in a manner that does not interfere with other operations, while also allowing for
the construction of a procedure that standardizes the calculation of each measure-
ment (ensuring the consistency of calculations from period to period). These are all
good reasons for implementing a reporting system for key corporate measurements.
Cost: Installation time:

13–13 USE BALANCED SCORECARD REPORTING

The typical controller only reports on the financial situation of a company. Unfor-
tunately, this is the information that is the result of many other activities that the
accounting department does not normally have anything to do with. For example,
profits are impacted if the customer is not satisfied (impacted by quality, pricing,
and on-time delivery), if internal business processes do not function properly (which
are impacted by such issues as machine utilization and the level of automation),
and if employees are not well trained in their jobs (which is impacted by training
and any factors leading to high employee turnover). A controller is not accustomed
to reporting on any of these issues, but they all impact company profitability, the
controller’s primary reporting responsibility.