Page 298 - Accounting Best Practices

c13.qxd 7/31/03 3:23 PM Page 287
287
Total Impact of Best Practices on General Accounting Functions
cases and others, the greatest risk is that only one person knows how to process
transactions. If that person leaves the company or is incapacitated for any rea-
son, there can be a serious system failure that will quickly bring the entire com-
pany to a grinding halt.
The best way to avoid this dependency on a single person is to implement
cross-training, using other accounting employees. By doing so, there is far less
risk that mission-critical activities will not be performed in a reliable manner,
which greatly reduces the chance that any key activity will not be completed on
time. To do so, there should be a schedule of key activities for which there is a
listing of required training elements. The controller should identify those per-
sonnel who are most qualified to act as back-ups, put them through the training
regimen, and ensure that they receive continual retraining, so they can easily
step into the needed jobs. A small pay hike for those employees receiving cross-
training will ensure their enthusiastic participation in this system. The key factor
to remember is that training alone does not make for a good back-up person—
only continual hands-on practice under the direct tutelage of the person who is
currently responsible for the work will ensure that this best practice will work.
The only people who ever oppose this practice are those who are currently in
charge of mission-critical functions. This is because they feel more valuable if
they are the only ones who can complete a task and will feel less useful if there is
someone else who can also do the same work. To overcome this problem requires
a great deal of tact and diplomacy. Sometimes they continue to be hostile to the
concept and must be removed to other positions while their replacements figure
out the system without any support at all. These are difficult alternatives, but
must be followed through if there is to be an adequate degree of cross-training in
key functional areas.
Cost: Installation time:

TOTAL IMPACT OF BEST PRACTICES ON GENERAL
ACCOUNTING FUNCTIONS

This section covers the impact of the best practices described in this chapter on
the general administration of the accounting department.
Accounting processes attract most of the attention in this chapter, since there
are best practices here for outsourcing some processes, using process-centering
in other cases, and consolidating others. They are noted in Exhibit 13.9. The manner
in which these best practices should be installed is that all outsourcing opportunities
should be identified and completed first, followed by any needed consolidation of
activities into the smallest number of locations. By taking these steps first, a com-
pany does not waste time reviewing existing processes that are about to be elimi-
nated or moved elsewhere. After these tasks are completed, it is time to conduct a
thorough review of all processes, increase the number of process tasks assigned