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Art of Accounting: System changes

October 14, 2024
in Accounting
Reading Time: 3 mins read
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Art of Accounting: System changes
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Enjoy complimentary access to top ideas and insights — selected by our editors.

Systems run a business, not people. People run the systems. Without good systems and compliance, most businesses will have as many systems as there are people. Think about any successful franchise, with McDonald’s, Subway and Jersey Mike’s coming quickly to mind. None of these could be successful without a system that is followed by everyone everywhere every time. And the people working there follow the system because they have to. Now, let’s compare this to a CPA practice or any service business.

Most service businesses and particularly CPA practices employ highly intelligent knowledgeable staff who usually know how to get their work done; and unless they are at the lowest level, they do not need much supervision on most of what they work on. The problem comes with supervising and training younger level staff and also higher level who aspire to move up to the next level and then on from there. Systems need to be established for every level regardless of the technical expertise required to get the services successfully performed. 

Usually many systems need tweaking and updating. Rather than a complete overhaul, my suggestion is to make changes whenever it is necessary. However, that is usually not possible, not practical or efficient, and that is part of the problem. Another reason for putting off changes is that many systems get embedded in the DNA of the organization, and it is difficult to change procedures that have always been done, along with changing the mindset about something that is generally working. Further, making changes takes time and might need vetting, testing or approval by a “committee.” All of these thwart changing a system or part of a system that is not working well, or as well as it should be. Another reason some systems do not work is a lack of a dedication by management that the system must be followed. If “management” doesn’t like the system, then it should be changed recognizing that there is no longer a functioning system.       

When something is discovered to not be working well, consider changing it then and there. Determine what isn’t working and why. Establish a correction or tweak that will fix it. Discuss with your partners what you found and how you want to fix it. Get acquiescence and then do it. Communicate the change or adjustment to everyone at your firm. Obviously this would be much easier for a small practice than for a regional or national firm, but the idea is to uncover parts of a system that aren’t working well or as they should be and to implement a change as quickly as possible. The process of making the change might vary with people or firms, but the need for it would not. Work it out in a way that suits you and get it done. Continuing with a system deficiency that you identified, developing a change and not doing anything about it will relegate you to remaining as you are, or leaning backward rather than pushing forward. 

Making system changes means making changes. This only is accomplished if the firm leaders are committed to improvements. Yesterday’s methods must have worked quite well to bring you to today but cannot be relied upon to bring you past today into the many tomorrows that will come.  

Here is a link to a previous column with added comments and suggestions.

Getting back to making changes. I seem to write about this a lot, and two reasons are 1) I consider having an effective workable system that is adhered to as essential to managing and operating an accounting practice, and 2) many of my columns are precipitated by calls for assistance I receive from colleagues. When a topic pops up more than a few times, it causes me to rethink it and provide some additional comments in my columns. I hold to a theory that if I write nothing about a topic, I cannot be an influencer for change; if I write something, then I might be a catalyst for change. I prefer the might over the cannot.

Do something new to make your practice better.

Do not hesitate to contact me at emendlowitz@withum.com with your practice management questions or about engagements you might not be able to perform.

Credit: Source link

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