Category Archives: Accounting

KEEP TRACK OF YOUR ACCOMPLISHMENTS

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It’s tempting when you have a job in the private sector to go day to day without noting what you worked on. In public accounting you have to keep track in order to bill the client, but in the private sector that’s not as much of an issue. When you’re really busy it seems that writing down what you’ve been working on is just a waste of time. It’s actually a very valuable exercise.

Even though I work in the private sector, I track my day exactly as I did when I was in public accounting. If I’m working on a special project, I take meticulous notes on the progress of what I call the ‘case.’ I keep a journal of all the names, dates, and summary of the conversations I’ve had with various people. I make note of any special things I do to get what I think is the best outcome for the company. I take the extra time to dig into the details. Most importantly, I take the notes as things happen. It is clear in your mind when you write notes immediately. If you wait a few weeks your notes on the distant memories won’t be as sharp and convincing.

This information can be very useful when updating your resume. You may not have any plans to change jobs, but if something happens and you have to seek other employment, it is so much easier to get started if your resume is already up to date.

I review my resume annually. I don’t necessarily rewrite the whole thing, but if I accomplished something special I add a few notes in the resume file. I might even write a paragraph or two for my cover letter as well.

This is also why I like to over-deliver when approaching all my work. I make sure I do everything with excellence. It makes my resume stand out because it is not just a list of things I have done. It reflects the care I took to deliver a high quality product that my customer, either internal or external, was happy to receive. It shows initiative and leadership.

Finally, it is sometimes fun to simply read your notes and revel in your accomplishments. I like to do this when I’m having a day where I feel like nothing is getting done. I take a ten minute break and read my ‘accomplishments file.’ Then I remember that yes, I was productive, and I will be again!

A SMALL CHANGE YIELDS AN IMPROVED RESULT

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If you want to increase your efficiency and organization at work, there’s an easy first step. It doesn’t require you to learn anything new. It doesn’t cost a dime. In fact it won’t take much effort at all, except for the mental discipline to do it.

Start waking up ½ hour earlier every day.

If you are employed, arrive at work early. By arriving before everybody else, you show initiative. It is usually quieter in the morning. If you have a pressing deadline or a complicated project that you need to start, your best ideas will come early in the morning. Use that extra ½ hour to go through your emails and answer the urgent ones, categorizing the others for a later response. Do that filing you never seem to get around to doing. Study another aspect of the business. Your value to the organization increases if you can help the business in other ways. If you work in accounting, make a point to study marketing. Write down five to ten ideas, and be creative; the list is only for you. You never know when one of the ideas on your list could come in handy in a business situation. Think about what is going on in your department, and make a list of changes you’d like to implement.

The same ideas apply if you own your own business. As a business owner you will find that your most productive hours are those with no interruption, and you will find those hours to be early in the morning.

One could argue that staying late is just as good. However, the stresses of the day drain you, and you aren’t as productive. Rather than working late, better to go to bed and get up earlier the next day. You’ll be amazed how much clearer your thinking is. Waking up early is like looking at the same problem with a fresh set of eyes. This is of vital importance when you work for yourself and the majority of your projects are self-reviewed. Working late into the night, you may puzzle over the problem for hours and never solve it. Wake up early and solve it with a better idea in a shorter amount of time. It’s a great confidence boost.

I wake up early seven days a week. On weekends I may stay up and start my day, but sometimes I am in fact tired and need sleep. If that’s the case I’ll go back to bed. Before I do, I try to write down a few ideas. Many times they turn out to be my best.

PERSUASIVE LETTER WRITING

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In the normal course of business you will receive notices from various governmental entities. Many are standard type notices, informing you of tax rate changes, new laws, or confirming receipt of returns you’ve filed.

You will also receive notices regarding errors on your tax return filings, which usually result in additional tax owed, but occasionally a refund. In some cases you may receive a refund check you weren’t expecting.

In all cases, you must investigate the problem and then communicate with the entity that sent you the notice. These communications can be written or oral. I usually choose written communication if the issue requires detailed explanation and backup.

When writing a letter, keep these points in mind:

  1. Make it clear what notice you are responding to. Reference it on the line right above the greeting, for example re: Notice Number xxx;
  2. Restate briefly what their letter said. This should be done in a sentence or two. I also include the date of their letter in this part;
  3. Indicate your response – that you disagree with their findings, along with your reason. Include backup to show why yours is the correct position;
  4. Tell the entity what you want. You have to be crystal clear on this point. Since it is so direct, I like to include ‘respectfully request’ as part of the sentence. For example, ‘we respectfully request that the penalty be abated.’
  5. A helpful closing statement.  Indicate that you are happy to provide any additional information needed to process the request. Include your phone number (even if it is also on the letterhead) to show that you are willing to discuss the issue further in the event of disagreement;
  6. Always include a thank you line, for example, ‘thank you for considering this request.’
  7. Enclose a copy of the notice as well as any backup you’ve referenced in the letter.

One final thought – if you receive a refund check you weren’t expecting, particularly from the IRS, don’t cash it right away. Call the issuer to see if they can provide more information. If you cash the check and it turns out it was issued in error, penalties and interest may be charged until the money is returned. It doesn’t seem fair, but I’ve had it happen. Of course you may be able to sweet talk your way out of it, but it doesn’t always work. Better not to put yourself in that situation at all.

 

 

THE IMPORTANCE OF ACCOUNTING NOTES AND REFERENCES

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Accounting departments will always experience some level of attrition. Of course we would like everyone we hire to stay on forever, but that’s not realistic. While there are many ways to ease the transition, one of the most effective is to train all members of your team to keep their work well-documented.

There’s nothing worse than when somebody leaves a company abruptly and there are no notes or backup for any of their regular projects. This situation highlights the value of spending the extra time on notes that clarify your work. It is always easier to document your work when it’s fresh in your mind.

The accounting department will have frequent interactions with various outside entities, and most of those will be by phone. It’s amazing how much easier it is to remember conversations by taking notes not only about the issue at hand, but also about any emotions felt during the interaction. If the person on the other end of the line was frustrating, or perhaps they were more helpful than expected, make note of it.  Sometimes hold music can be unusual enough to write about. Don’t worry that it may seem strange to others, if it helps your memory, write it.

For financial work papers, notes regarding unusual entries made during the month along with explanations, and references to additional backup are critical. They will be useful at year end, particularly if your financial statements are audited.

Take notes and reference assuming you will not be around to explain your work at a later time. Your work should be able to stand on its own.  It shouldn’t take a committee to explain what is going on with your work papers.

It can be tempting to take shortcuts with the referencing, especially if it’s something that is prepared frequently. Never assume what you do is obvious. Think in terms of making your eventual successor’s job easier. Set a high standard they will want to uphold.

5 TIPS FOR POWER MEETINGS

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Most people consider meetings boring and unproductive.  That’s because they are generally called without a plan, are too long, and don’t engage with those that attend. Try incorporating some of the ideas listed below to super-charge your meetings:

  1. Make them short. Keep your meeting to 15 minutes or less. A short meeting translates to a power packed productive session.
  2. Regular meetings. Meet once a week if possible. Bi-weekly is okay, but anything less than that isn’t often enough.
  3. Encourage everyone to share their ideas.  Everyone should know that this is the place to express themselves. If they have ideas to make their jobs more efficient, or would like to take on something new, this is the time to share it.
  4. Provide snacks. People love to attend meetings if there’s food involved – enough said!
  5. Attendance is optional. This one is a little counter-intuitive, but one advantage is if someone has a deadline or schedule conflict, you don’t have to reschedule the meeting for everyone else.

Try this system for a month. You’ll find your team better focused and higher functioning. This is a team that’s more supportive for you.

TIPS ON TRAINING NEWLY HIRED ACCOUNTANTS

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Congratulations! The business is growing and you need to hire more people. I will assume you’re past the screening process and have hired your ideal candidate. The problem is they have little to no experience. Either they are just out of school, or perhaps have experience in areas other than accounting. Here are some ideas on setting them up to succeed.

Unless you have other experienced staff, most of the training responsibility will fall on you. One of the best ways to start is to give them a relatively straightforward task. An easy way to do this that won’t require a lot of your time, is to have them prepare reconciliations or work papers that have already been done. For example your prior month sales tax returns, or financial statement work papers. They can compare their work to the prior month. If they have questions, have them prepare a list and you can schedule a time to go over it. This allows them to go at their own pace and learn by doing.

Another good way to get new hires started is cross-training with other departments. A staff accountant can pair up with an AR or AP clerk for a day. I like this because it gives your current staff a chance to learn effective training skills, and the new person will become familiar with your systems and other aspects of the company. It is also beneficial to have as many people as possible trained in data entry. There are always times when the volume increases, and there are not enough staff. The ability to have the extra work done internally is more cost effective than hiring temporary staff.

I want the people that work for me to understand that every task in accounting is potentially theirs.  Yes, they may get promoted and have additional responsibility, but if something needs to be done, they may “get the call”.  People need to understand that to work efficiently, sometimes you have to do things that aren’t as fun, or not as sophisticated. I like to look at it in terms of helping someone else; if AP needs help with their filing, I’ll do the filing, even if I’m the Accounting Manager. That’s the kind of attitude you want to instill in your employees, and the best way to do that is to lead by example.

After about a month on the job, ask your new employee to start documenting what they do every day. Once you have a week’s worth of documentation, review it, and then ask them to draft a procedures write up of their job. This assists with documenting internal processes and gets them thinking about other tasks they might enjoy doing.

Some people are happy to be told what to do; others are more aggressive and will seek out new opportunities. Find out what type of person you’re dealing with as soon as you can. One is not necessarily better than the other, but you can assign tasks based on skill level and attitude. For example, someone that is more of a follower will be suitable for repetitious work, like data entry, filing, or collections. Someone more aggressive will learn those things, get better and faster at those tasks, and end up with a lot more free time in the day. You want to be ready to fill that time with productive activities. You might consider having them start on one of those special projects that are sitting on your desk!

The common theme of these techniques is building teamwork. They should understand no task is too big or small. Let them know they will be recognized for making the department more efficient. Find out their strengths and use them to your advantage. Discover their weaknesses, and find ways to help them be stronger. In helping them build skills, you build yours as well.

TRUST YOUR INSTINCTS

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While accountants always like it when things balance to the penny, we also consider materiality. For example, if your bank reconciliation is off by $20, and the account balance is $600k with millions flowing through it every month, it makes more sense to write off the $20 and move on with your life. I do it all the time. It allows me to focus on more pressing issues.

There are times though, when I see what appears to be an immaterial amount, but something about it bothers me.  Between sales, property, and income taxes, I file over 1,000 returns each year.  If I chased down every penny nothing would ever get done. However, when reconciling sales tax accounts, it really makes no sense for the general ledger not to tie within pennies of the subsidiary. In most cases the subsidiary is another software program that calculates the taxes on your invoices. In a perfect world, these systems communicate with each other seamlessly.  Since our world isn’t perfect, things happen.

Last month my general ledger and subsidiary were off by $17. The tax owed was $80k. But I was bothered. There was no reason for it to be off. I put my detective skills to work, it took about an hour, but I figured out that the software system was incorrectly posting a credit memo; the credit went to a different state than the original debit. Without getting into all the fun details, suffice it to say that this hour spent resulted in a reprogramming of the sales tax program to correct a systematic error that would have continued to occur. If I didn’t investigate $17, the next one could have been thousands, or over time it could have added up to even more than that.

Today I received an email requesting a resale certificate for a 3rd party shipment. The wording of the email was confusing; I read it quickly and thought I knew the answer, was about to hit send, then I felt again like something was wrong. I read the email a few more times, and determined there was a misunderstanding of sales tax law. As part of my investigating, I uncovered another problem.  I determined that a sale had been sourced to an incorrect state, no tax had been collected, and it was a material amount. The error I found was only thinly related to the email, but being bothered, I spent the time.

Never feel bad about spending extra time to investigate the details on something that just ‘feels wrong.’ You could uncover larger problems and solve them before they cost your company a lot of money. In communicating these issues internally, you show expertise and leadership. It also showcases your problem-solving and decision-making abilities.

Spending this extra time develops what I like to refer to as ‘the gut instinct.’ It will get faster and easier to glance at something and know that it doesn’t seem right and needs further analysis. Being able to react quickly with gut instincts is a valuable business skill. Never waste an opportunity to practice it – that $17 could change your life!