The 2 Day Close, Phase 2 – Approaching Your Staff

How do you tell your accounting staff you are going help them be more productive? You realize your company should be closing the books faster, managers should have access to accurate information sooner and you expect more from your ERP system. Process improvement in accounting is long over due, but accounting seems like a mystery. In this post you will develop an understanding of the accounting staff’s perspective, reluctance to change, and how to best introduce process improvement. This is the third post in my series created to help organizations change the culture in their accounting department.  My last post Defining Your Approach to Closing, introduced three objectives to utilize throughout this project.  

  • Continually strive for process improvement
  • Maximize software functionality
  • Engage staff in more productive and analytical tasks

During the thirteen years I spent with the software company mentioned in my last post, we applied these 3 objectives as part of our software implementation methodology. Due to our implementation methodology, a large percentage of our customers’ staff were retained and grew along with the software. At the SaaS company I founded in 2004, we had the same success utilizing these objectives to transition customers into our Cloud. In both organizations, much of our success in developing the customers’ accounting staff was based upon the manner in which we approached their staff.  This article will help you achieve the same success with your accounting staff.  

Understanding the Accounting Staff’s Perspective to Change

Every ERP system implementation requires accounting processes to change.  If processes are not changed, the implementation will not deliver the expected ROI and many will fail. Like most people, our customers’ accounting staff did not want to accept these changes and pushed back. At both companies mentioned the previous paragraph, most of our consultants were accountants so we understood the accounting staffs’ perspective and reluctance to change their processes. Accountants at every level rely on repetitive tasks to minimize risk and support their closing schedule. Accountants are perfectionists; they work hard and wish there was more time to verify financial information. Many of their processes are inherited over time and they understand these processes are flawed. Accountants are held to short-term deliverables, i.e. month-end closing schedules. Therefore, accountants do not believe they have time to improve their processes. You need to overcome these concerns with your staff to increase acceptance of this project. 

Engage, Motivate and Retain Staff

Every organization should expect push back when launching process improvement projects.  Your staff works hard and takes pride in their work. Your staff will commit to embracing the changes and will implement changes, as best they can. Managed properly, your staff’s perspective will change. As you work through the phases of this project, you will recognize your staff beginning to identify issues and recommend process improvements. When this begins, substantial process improvement will result. Remember, this project is intended to improve processes, not replace your staff. Your staff understands how to support your organization. You do not want to replace your staff with someone new who understands the software and has to learn your business, to later learn they cannot work with your project managers.  

Present the project to your staff in a positive light.  For example, one of our project objectives is to “migrate your staff to more valuable and more productive tasks”. Consider the accounting staff’s perspective when presenting this goal to them. Restate the same goal as “migrate your staff to more analytical tasks and reduce their manual tasks”. The minor change in wording directs focus to the staff’s professional development and avoids the potential of perceived individual criticism. Think through your presentation and how your staff will react to choose the best approach. Support your staff and allow them to adjust and they will grow with these changes.

Focus on the Software First to Identify Areas for Improvement

Present the project in a way that focuses on increasing software utilization first, to define processes and areas for improvement. The first step is to document all current processes, including those manual tasks performed outside of the software. Documenting automated and manual tasks will identify potential software deficiencies and training needs.  Recognize, your staff may be adequately trained on using the software; however, they typically are not trained to understand the impact the software implementation has across the organization. Unfortunately, the same can be said about the impact of the accounting processes across the organization.  The accounting staff understands the importance of timely month-end financial statements. However, they typically do not understand the impact their closing processes have on the overall organization. When accounting staff are hired, they are trained on executing specific tasks. Staff are not trained on the impact those tasks have on the organization. Therefore, when the organization changes, the accounting staff does not have the background to recognize or recommend changes to their process. Without process documentation and continuous process review, many companies follow the same processes each period without understanding why the process is being done or the financial impact.  

For example – I had a client that created a service center allocation for copier usage,  the allocation basis was number copies. They created an automated load of the basis. As we reviewed the process, gathered the copier costs and associated usage, the documentation showed they were allocating fractions of pennies across cost centers. The rounding issues created a nightmare for reconciling the cost allocations. The process was quickly changed and the copier costs were charged to a single overhead. For years, no one had reviewed the process to recognize a significant reduction in the costs of copier maintenance. Two accounting staff members spent a large amount of time each month processing and reconciling the allocation.

In the next post, you will see how the closing documentation is used to develop your project plan. The project plan defines “why” processes are being done and most importantly, it becomes a mechanism to address issues without implicating individuals.  

Meet with your staff

You are now ready to present this project to your staff. At this point you understand the positive impact this project will have on your organization. You understand how to approach your accounting staff with this project.  Meet with your team, explain the project and assign them the task of documenting the current accounting processing steps. Ask them to present the processes to you, as well as define why each task is being performed. Give them enough time to prepare, as they will be rethinking many of their processes prior to the presentation.  

Developing your approach to managing your accounting staff is typically performed by a senior financial resource, many times the CFO. Jezior Advisors offers a virtual CFO to help develop this culture in your organization. Please email me directly with any questions

My next grow – Initial Process Review outlines what to expect during your process review and how to develop your project plan.

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