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Accounting Best Practices
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The accounting department is a cost center. It does not directly generate revenues,
but rather provides a fixed set of services to the rest of a company, and is asked to
do so at the lowest possible cost. Consequently, the accounting staff is called
upon to process transactions, write reports, create new processes or investigate
old ones—while doing so as an ever-shrinking proportion of total expenses.
This cost-based environment is a very difficult one for most accountants, for
their training is primarily in accounting rules and regulations, rather than in how
to run a very specialized department in a cost-effective manner. They find a few
ideas for improvements from attending seminars or perusing accounting or management
magazines, but there is no centralized source of information for them to
consult, which itemizes a wide array of possible improvements. Hence the need
for the third edition of Accounting Best Practices.
This book is compiled from the author’s lengthy experience in setting up and
operating a number of accounting departments, as well as by providing consulting
services to other companies. Accordingly, it contains a blend of best practices
from a wide variety of accounting environments, ranging from very small partnerships
to multibillion-dollar corporations. This means that not all of the best
practices described within these pages will be useful in every situation—some
are designed to provide quick and inexpensive, incremental improvements to an
operation that can be installed in a day, while others are groundbreaking events
that require six-figure investments (or more) and months of installation time.
Some will only work for companies of a certain size, and should be discarded as
more expensive and comprehensive accounting systems are installed—it all depends
on the situation. Consequently, each chapter includes a table that notes the ease,
duration, and cost of implementation for every best practice within it. The best
practices are also noted in summary form in Appendix A.
This third edition of Best Practices contains 60 new best practices. These are
concentrated in the areas of internal auditing, accounts payable, finance, and payroll.
Some of the best practices involve solutions that have been posted on various
Internet sites, but there are fewer of these best practices than appeared in the second
edition. Indeed, a great many Internet sites listed in the second edition have
closed down, requiring the author to remove three best practices that had been
listed in that book. The area of application service providers has been especially
hard hit, with about two-thirds of the providers listed in the second edition having
shut their doors in the past two years.
Chapter 15 is new, containing 19 best practices for the internal auditing function.
Though this area sometimes falls outside of the accounting function by
reporting directly to the auditing committee of the board of directors, it more
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commonly reports to the chief financial officer, and therefore a discussion of
improvements to it appears relevant for this book.
Accounts payable remains the area with the largest concentration of best
practices, with the total now rising to 40 just in this area. A number of risk management
and investor management best practices have also been added to the
finance chapter, as well as a smattering of best practices to a half-dozen other
chapters. The result is 292 best practices to assist the reader in creating a more
efficient and effective accounting department.
Given the large number of best practices in this book, it would have become
quite difficult to locate specific items under the structure used in the second edition.
Accordingly, a table has been added to the front of each chapter, itemizing
by subcategory the best practices located within it. For example, the accounts
payable chapter sorts best practices into the categories of approvals, credit cards,
documents, expense reports, management, payments, purchasing, and suppliers.
A reference number is assigned to each best practice in the table, which one can
then use to find the best practice within the chapter. The tables also graphically
describe the cost and duration of implementation required for each item, which is
repeated throughout the text that follows the descriptions of each best practice.
For additional ease of indexing, these tables are collected into Appendix A.
Finally, a selection of best practices have an “Author’s Choice” icon posted
next to them. These best practices are those the author has found to be particularly
effective in improving accounting operations.
If you have any comments about this book, or would like to see additional
chapters added to future editions, please contact the author at brasto@aol.com.
Steven M. Bragg - Personal Name
NONE
Accounting
English
John Wiley & Sons, Inc
1-2004
New Jersey
1-407
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