How can we make life easier for our accounting team while asking more of them?

It’s about automating and streamlining – and takes people, processes, and technology.

Let’s take a look!

Technology

  • Set up bank feeds
  • Record processes using a tool like Screencast-O-Matic and post the screencasts to a place that the team can access. This helps to get the most value from your top-level finance people instead of having them spend their time on more repetitive financial tasks
  • Record task checklists in a workflow tool like Asana, Monday, or Wrike. Start with recurring tasks and include decision-making trees.
  • Implement tools to automate tasks which don’t require human judgment, and to batch/streamline tasks which do. For example: memorized transactions, recurring transactions, transaction templates, Batch Enter, Find & Recode.
  • Don’t use spreadsheets or other separate stand-alone files if the main technology that you have can do the trick. Learn more about what it’s capable of. Unnecessary separate systems will cause wasted time. If a separate spreadsheet is necessary, design it to be an easily-updatable template.

PROCESSES:

  • Encourage electronic transactions and not use paper checks
  • Have vendors e-mail their invoices to a Bill.com address or Hubdoc address. Hubdoc will employ OCR and handle some of the data entry for you
  • Use a simple, standardized Chart of Accounts. Make sure it’s meaningful to the organization but don’t let it explode with details which don’t contribute to a decision-making process.

PEOPLE:

  • Control the quality of the information stream, so make sure that only well-trained, process-oriented people are sending information to the Accounting team.
  • Authorize new apps and processes such as the ones listed above. If the invoicing process can be streamlined by using TSheets for example, authorize a training and work with service providers to get the team trained on it.
  • Make sure everyone is on board for streamlining and if someone is resistant, decide whether you are going to provide coaching or engage in a different course of action. Someone resistant to process will kill a company.

How Does Receiving Grants Affect Internal Control?

By Bob Swetz

Controller Consultant | Tier One Services, LLC

Using proper internal accounting controls is important for any type of organization. However nonprofit and governmental entities that receive grant funding typically have at least one additional layer of controls to consider. These controls can be mandated at the Grantor, State or Federal level.

Grantor Level Requirements

If your organization does not fall under federal or state guidelines you may still be required to have specific procedures and controls in place that are stipulated by the grantor. It is extremely important to carefully review the grant documents to make sure your procedures are in compliance with the grant.

State Level Requirements

Some grants are funded with state money but do not fall under federal guidelines. In this case, it is important to understand the overall guidelines of the funding state department to ensure that your controls and procedures meet any specific requirements. As discussed above, you should also carefully review your grant documents to ensure compliance.

Federal Level Requirements

Organizations receiving more than $500,000 in federal funds are held to a completely different standard. If your organization falls into this category, you are not only required to have the proper internal accounting controls in place for audit purposes, but you must have controls in place to ensure compliance with federal laws and regulations related to the grant. Auditors will use the OMB Compliance Supplement for the appropriate CFDA# related to your federal grant, so it is important to be current with applicable laws and regulations.

At the end of the day, your organization needs to have good accounting controls in place that work for you. Just don’t forget that when you receive grants, others are watching.

If you have questions or want to dig deeper, feel free to schedule a 15-minute troubleshooting session with me at http://bit.ly/Scheduling_Troubleshooting or connect with me on Facebook at https://www.facebook.com/bobswetzonline.

Establishing Processes in a Service Organization

When you are providing services but certain things in the relationship aren’t working, what may be lacking is alignment.

Consider whether there is misalignment between:
* the client’s perception of the potential value of the work and what potential value you could be delivering
* that value of the work you are delivering and the value of the work that you’d like to deliver
* the client’s expectations and your expectations
* the way that the clients are operating and the way that your ideal client operates
* the way that your services are functioning and the way that they need to function in order to be available at the current cost

And what about communication? When those you serve don’t communicate as frequently as you would like, it’s because they don’t get value from communicating more frequently.

Possible paths forward:

  • Realign your expectations to match the clients’ current perceived needs. Arrange for monthly or quarterly live meetings to create deliverables on the spot. Use tech tools to turn the calls into working sessions, not just reviews or status updates.
  • Realign the clients’ expectations of what’s possible with more frequent communications. Show them what’s possible with more frequent communications and put them in a position to reach their goals by using your services.
  • Please note the potential huge opportunity for operational / process coaching here if you serve business clients. If they only want basic services, it may be an indicator that they wouldn’t pay for a premium service because they can’t get an ROI from it. This may indicate that their team doesn’t have their processes together, because assuming that there’s demand for what they do and assuming that they’re good at doing it, process excellence is pretty much the only thing keeping an organization from scaling. Process excellence arises from people (including company culture), processes, and technology. If you/your team have skills in this, you can help turn either of these companies from a day-to-day grind into a scaling joy. If that’s what the owner wants, that is.

Sometimes the most exciting path forward is mindset coaching. Dig into how the owner perceives business, leadership, processes, relationships, time, and money. What stories are running the owner’s decision-making process? What visions guide his or her life? What are the owner’s core values? Which of those stories are out of alignment with that vision and those values and are really old stories?

If you can cause a transformation in that, it will cause a transformation in all aspects of the leader’s life and business and you & your team will ultimately have a proactive client instead of a fire-drill client.

The processes that you want to focus on are not creating uniform processes for each client. Instead, create uniform processes for how you train and equip your team. Create engagement workflow templates and you be the one to customize them when you bring in a new client. Create a knowledge base for internal purposes. Create forums for your team members to communicate with each other – not about engagements, that’s in your workflow management tool – but about higher-level things, broader-impact things, like software and excellence and gratitude.

I know firsthand that client engagements that aren’t working bear the highest cost of all – not having the time to cultivate new business + having to handle too much yourself because of the craziness.

Nourish your team and get those engagements aligned.

Does Your Organization Need a Disaster Recovery Plan?

By Bob Swetz

Controller Consultant | Tier One Services, LLC

Many of us seem to think that a total disaster is something that happens to others, but not us.

Unfortunately, disasters can happen to any organization at any time, and we need to be prepared.

Disasters can also come in more forms than you might think. Many might think of a fire, flood or some sort of natural disaster, but they can be more subtle and unassuming. I have witnessed several “data loss” disasters over the last six months that could have been prevented with the proper planning.

Here are a few things to consider:

1. Do you back up your data on a regular daily basis?

2. Have you considered the types of data that need to be backed up?

3. Do you store your backups off-site?

4. Do you test your backup restore process?

5. Do you have an agreement with a third-party to restore your data in the case of an emergency?

This is not a comprehensive list by any means.

I do want to point out, however, that 4 and 5 are often overlooked. I have seen organizations that thought they were backing up every night, only to find that it wasn’t working. When disaster struck, they were 6 months behind on backups. I have seen organizations whose entire network was taken down by a virus. One of them was out of business for over a week.

Consider regular tests and off-site recovery as part of your plan so you can substantially reduce your downtime if your facilities or equipment are unusable.

Having the proper backup procedures in place and taking the next step to a full-fledged disaster recovery plan could save your organization someday.

If you have questions or want to dig deeper, feel free to schedule a 15-minute troubleshooting session with me at http://bit.ly/Scheduling_Troubleshooting or connect with me on Facebook at https://www.facebook.com/bobswetzonline.

Why is Segregation of Duties Important in My Accounting Department?


Part 1 of 3
By Bob Swetz
Controller Consultant | Tier One Services, LLC
“Every business needs to be protected in order to survive and thrive.”

What is segregation of duties?
Segregation of duties is the concept of splitting key duties within the same accounting function among multiple personnel. For example, printing, checks and signing checks are in the same accounting function. Ideally, these duties should be performed by separate staff members.

Why is it important?
Allowing the same staff member to perform all or most of the duties in the same function creates an opportunity for that person to cover up improprieties. Let’s take the case referred to above and say that one staff accountant enters vendor bills, writes the checks for those bills, mails them and then to top it off does the bank reconciliation. That staff member could easily write checks to themselves, cash the checks and mark them as cleared in the bank reconciliation without anyone ever knowing about it.
It’s important to remember that controls such as adequate segregation of duties are not intended to point fingers or suggest someone is doing something wrong, they are just good business practice to safeguard the organization’s assets.

I have a small accounting department, so what can I do?
Creating and maintaining adequate segregation of duties is probably the most difficult control challenge a small organization faces. Check out how to face this challenge with a one-person accounting department in Part 2 of my series, How to Segregate Duties with Only One Accountant.

How to Consolidate Financial Statements from Multiple QuickBooks Files

 

Two ways to consolidate are:

EXCEL TRIAL BALANCES

[1] Export all trial balances to Excel, position them on the same tab but each below the previous one, tag add a column to tag each account with the entity name, combine the DR and CR into one DR (CR) column.
[2] Create your financial statements with your desired accounts and headings
[3] On your tab with the trial balances, create a column called Balance Sheet and assign a B/S account from your B/S page by linking to it…for all line items. Add another column for Income Statement Accounts.
Be sure to skip all intercompany accounts.
[4] On your financials, use the SUMIF function to pull from the columns on the T/B tab using your mapping.

Pros: You can easy-to-update, professional-looking consolidated financials.
Con: It takes a while to set up the first time.

 

QUICKBOOKS ENTERPRISE

[1] Make sure the Charts of Accounts are identical across all 3 entities for any accounts that you wish to consolidate. Account number, spelling, parent/sub status.
[2] Also make sure that any intercompany accounts are all on the same line, i.e. if you have an asset in one and a liability in the other, change one of them to an asset before consolidating.
[3] Use the tool in the Reports menu to consolidate.

Pro: Doesn’t take a lot of time.
Cons: You have to set up those intercompany accounts each time so they get zeroed out, and you end up with consolidated financials that are in Excel and are very cheesy-looking.

Cash Crunch! Nonprofit Edition

 

The best paths out of a cash crunch depend on the cause of the problem. Some examples are below; I hope one or more is helpful.

We’re going to skip the obvious “Get more grants! Do more fundraising!”

Cause: Solution

Embezzlement: Plug the leak, make them give it back, get a line of credit if necessary to see you through until you do.

Unreimbursed grant expenses: Speed up your processes so you can invoice faster. Engage in faster communications with grantors so they don’t forget about you. Set up electronic inbound payments for the grant funds.

High monthly burn not covered by grants: Take a look at any expenses that aren’t providing the organization with value and cut them. Start with the largest ones, not your deluxe paper clips.

Typical seasonal flux: Consider a line of credit. This financing tool is what a lot of seasonal organizations use to get them through the predictable, seasonal tough times if they haven’t saved up from the abundant times. And next season when the organization has plenty of cash, squirrel more of it into a savings account and then you’ll be your OWN line of credit!

Disallowed grant expenses: Use technology to collect backup documentation so you can submit all of those documents to grantors. For example, use Expensify or Entryless so authorized employees can snap a photo of their receipts or scan them, and send them ultimately to the accounting system. And review grants/authorizations with everyone empowered to spend so no one spends on something not covered by a grant.

Overspending grants: Quickly realign your authorization policies for spending as well as the clarity of your accounting on a grant-by-grant basis. Even basic accounting systems such as QuickBooks and Xero are able to produce an income statement by grant if you set them up to do so.

Do members of a team want a guided approach to complete a project, or be left to their own creativity?

Do team members want a guided approach?

Be absolutely, crystal clear on the problem to be solved by the project.

Be absolutely, crystal clear on what sorts of things matter and don’t matter on the project and what is flexible/not flexible, for example:

  • timeline
  • method for solving the problem
  • technologies used
  • processes used
  • people involved
  • team-level communication channel & schedule
  • what, specifically, constitutes success

Be absolutely, crystal clear on your level of commitment and your “why.”

Then let each team member know that you are (or whoever is) available for whatever degree of support they require to get the job done and enhance their own value.

If a team member wants checklists, provide checklists.

If a team member wants to be left alone to do the work with latitude and independence, provide a deadline and a problem to solve.

If a team member wants daily meetings, provide daily meetings.

If a team member wants to you to be available via IM, be available via IM.

If a team member wants you to review completed milestones, set up a system to be notified of those milestones.

Is it worth it to track inventory quantities, not just dollars?

 

How much money do you stand ready to make & keep from this data?
Uses of quantity-specific inventory information include:
* prevention & detection of theft and loss
* guard against being overcharged by the supplier
* highest ROI on giving of samples
* shaping of messaging & promotion strategy to focus on highest-margin products, not just highest or lowest sale price
* cash flow management from clarity on reorder points so disbursements aren’t accelerated, or on the other end of the spectrum, she isn’t left without product when a customer needs it
* prevention of losses when she has too much of a non-selling or slow-moving product and has to let it go at a fire sale
* once her business is large enough such that she has to file on the accrual basis, you can help her to make sure she’s not paying too much in income taxes (or too little and then pay extra for it later with money and time)
* assist in setting sales targets & plans for achieving those targets
Track.
Profit.
Repeat.

Five Ways to Ring in 2018

Happy new year! January is the month of new beginnings and a perfect time to strategize about projects that will boost your business prosperity. Here are five ideas to get you thinking about new beginnings for your business in 2018.

1.Learn new technology.

Every year, tens of thousands of new online software applications are invented that will save us time and money. Learning at least one new app will keep us sharp and hopefully improve our business. There are many to choose from, and one way to narrow it down is to find one that will help you do your job better.

Look for an app that supports your administrative work, such as a new phone system, video conferencing, scheduling, cloud storage, shipping, document management, or data entry automation. Or you might have a need for apps in marketing and sales, such as social media, customer relationship managers, email list management, or web applications. If you’re not sure where to look, ask your friends what has saved them the most time.

2.Upgrade your accounting system.

If your accounting system is not updated to the current version, it may be time to perform the upgrade. Check with us for advice on the current version and any new features that you can benefit from.

3. Develop your 2018 prosperity plan.

The word “budget” has somewhat of a negative connotation, but a prosperity plan sounds like fun. They are the same, of course, and the idea is to determine what goals you want to reach so that you have a clear path to making your desired prosperity a reality.

4. Create a theme or mantra.

Want to stay more focused in 2018? A theme or mantra can remind you to stay on track with a particular project or goal. Brainstorm a phrase that will guide you in 2018. Here are some examples:

  • Customer service excellence
  • More me-time
  • Enthusiastic, engaged employees
  • Expanding digital presence
  • Going green
  • A prosperous new product line

5. Delegate something that isn’t getting done.

One way to feel amazingly rejuvenated and re-energized about your business is to give someone an item that’s been on your to-do list for far too long. It magically gets done right before your eyes!

We’re wishing you a most prosperous and happy new year.