Accounting Best Practices, Fifth Edition

13–4. Eliminate All Transaction Backlogs

Accounting departments get in trouble when they develop a permanent backlog of standard accounting transactions, usually in the areas of cash receipts processing, billings, and payables. When a backlog arises, the focus of the department shifts to the servicing of this backlog, to the exclusion of all other value-added activities, such as improving processes or providing better customer service. Also, backlogs tend to create piles of paperwork in which other documents can be lost, resulting in extra search time to locate needed materials.

A crucial best practice is to eliminate these backlogs, usually by allocating extra staff time to them. Once the piles are eliminated, the controller can focus on increased levels of training and process improvement in order to reduce the number of people required to keep the backlog from reoccurring. If a company has a highly variable amount of transaction volume, some backlog may reappear in periods of high activity, though this can be avoided through the careful use of the preplanned hiring of part-time workers to assist the regular staff. There is also likely to be some buildup in the backlog on a temporary basis at the end of each month and especially at the end of the fiscal year, as closing activities take priority. However, these are temporary issues whose impact on the backlog can be eliminated ...