Accounting Best Practices, Fifth Edition

12–19. Document the Process

Some organizations have created closing procedures and established responsibilities for those accounting people who are involved with the production of financial statements, which helps them to some degree in organizing the flow of work. However, they meet with great resistance when they take the next step and mandate reductions in the time needed to complete the statements. Employees grouse that there is not enough time to complete their work, that upstream work is not completed on time (which does not allow them to start their tasks on time), and that management does not know all the details required to complete their tasks. As a result, though the process appears to be more organized, there is no way to reduce the time and resources allocated to it.

The underlying reason why this problem arises is that the employees are right—the managers who are demanding shorter completion dates do not really know the process and cannot understand the plethora of additional necessary changes before the process will become truly streamlined. The only way to avoid this quagmire is to document the process thoroughly. This means that a team must interview all employees who are involved in the reporting process, write down detailed descriptions of what they do, and flowchart all activities. Only after these steps are completed can one see the bottlenecks in the process that must be eliminated. For example, an employee may be using a painfully slow allocation method for ...