The annual board meeting just wrapped up. You know what’s coming. “We need to document our accounting policies,” says a board member. “What if Jane CFO wins the lottery and never comes back? Our company would be a disaster!”
Organizations often focus on the wrong reasons to document their accounting processes. The chances of someone winning the lottery and not showing up for work are so unlikely the accounting team isn’t motivated to do it. Or, they don’t know where to start or don’t understand the benefits. The three top reasons for implementing accounting policies and procedures are to develop consistency, accountability, and standardization.
1 – Consistency. With documented processes, all employees are following the same practices throughout the different accounting modules. Checklists, policies, and processes look and feel the same, have the same flow, and are logically consistent whether entering a journal entry, adding an accounts payable bill, or performing the bank reconciliation.
2 – Accountability. When employees know they are going to be held accountable, they do a better job. Having documented processes and procedures provides a measurement tool for management to use as part of the employee review process. That’s accountability.
3 – Standardization. Each time a process is completed, it is done the same way, whoever is tasked with it. Whether it is the person hired to do the job or someone filling in, the accounting process is done exactly the same, every time. Standardization is a huge benefit when it comes to how your accounting processes are accomplished.
If you need help developing accounting policies and procedures within Microsoft Dynamics SL, contact Synergy.