How One Accountant’s Experience Changed a Company’s Expectation, Saving them Headaches, Time, and Money.

By PRETTY BOOKS ON August 25, 2020

BEHIND THE SCENES is a  collection of stories about relationships, challenges and wins in the day to day world of accountancy.

There is no typical day in the office for an accountant. They might start each day at the same time checking a work email, but after that, anything goes. Between business emergencies, problems emerging with books, reconciliation issues and beyond, accountants become much more than just number crunchers. They’re also firefighters, shoulders to lean on, friends, and allies.

Troubleshooting numbers and mathematical issues is a large part of an accountant’s job. However, sometimes the problem lies deeper than the math. Sometimes the problem is in the process used to make the calculation.

The accountant woke up early to a call from her new client’s accounts receivable specialist. She was trying to submit reconciliation reports for a short term loan against a tight deadline, but needed help. She had to reconcile customer receivables and was having a hard time making them balance. Understanding the urgency, the accountant rushed to the office to review the documents.

The client, like many others in the manufacturing industry, often experienced cash flow issues. They turned to short-term loans in order to be able to order inventory and fulfill customer orders. Customers of theirs would order a shipment of goods and pay when they received them, which meant the company initially had to operate without that order’s income. The client sold their customer receivables to a lending company in order to solve their cash flow issue.

At the office, the accountant was easily able to identify the mathematical issue and balance out the reconciliation, allowing the client to submit their documentation on time. She hopped on a phone call with the clients to reassure them that their reconciliation package was ready to be submitted to solve any cash flow issues.

“The uncertainty of not knowing if you’re going to be able to get the money turns to frustration and headaches for our clients. The specialist was responsible for fulfilling the banks requirement, so if they are having trouble, we’re all having trouble. And this trouble has been around for months.”

The accountant learned that the specialist had been with the company for less than a year and had taken over the responsibilities for reconciliation three months earlier. She was not familiar with reconciliation or customer billings, and was following a step-by-step guide left for her by her previous manager. In a week where things were simple, the specialist was able to follow the guide and complete the documentation. But because she did not have a thorough understanding of reconciliation, she was stranded when something came up that the guide didn’t cover.

“If they are having trouble, we’re all having trouble. And this trouble has been around for months.”

“Without fundamental comprehension, you can’t modify your approach if something goes wrong. Every time something changed, the team wasn’t able to solve the problem because the answer wasn’t written down.”

Part of the accountant’s job as a partner to the client was to identify ways to be more effective and efficient in financial management. In this case, that meant reassessing and evaluating the current process and evolving an approach that was more time and cost effective.

The accountant began by having the internal team walk her through their current process so she could identify and help eliminate inefficiencies. Through her observation, she found that the specialist was over-complicating the process by pulling data she didn’t really need and using a complex Excel spreadsheet. The reconciliation process was taking the specialist a full day to complete, and she was responsible for doing it three days a week.

The accountant studied the client’s mathematical model and business relationships of the business to understand how transactions were causing problems. Transactions change and have unexpected variables and issues, and without proper training, there is no way to adapt your method around them.

Once she identified a process that was easy to follow and would account for the changing variables, she sat down with the specialist for one on one training and guidance.

Eventually, the client decided that the accountant would take over the reconciliation to keep the specialist and CEO from dealing with unnecessary stress. The accountant was able to use her strong analytical skill set and comprehension of reconciliation to go through thousands of transactions and provide a complete and accurate documentation package in just 20-30 minutes.

“We always think about our clients and what we can do to help them. Sometimes it’s creating a new procedure for their companies in order to provide them peace of mind, sometimes it’s taking it over when they ask us to. There is a long road between where you are and where you want to be, and we’re here to help the executive teams feel like they’re making smooth progress.”

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The information provided in this post is for general informational and educational purposes only and is not a substitute for professional advice. Consult your financial, business, or tax advisor with respect to matters referenced in this post. Pretty Books assumes no liability for actions taken in reliance upon this information.
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