Variety between clients
- Learning new accounting quickly
I was fortunate to work on Big 4 public accounting when we were assigned a variety of clients. From Retail to Big Pharma to a national Brewery, we had to learn their accounting in a week and be able to spot where they were doing it right or wrong. There were people to help, from inside the firm and the client, but you had to listen, learn and assess the risks quickly. Then plan the audit and update the plan for changes in the company business.
At one entrepreneurial company, that operated radio stations, they decided to get into the telephone business as de-regulation took hold. I found the sale-leaseback transactions on the phones and determined they were losing money on most of the transactions. It was just taking the time to do the math. - Variety of financial systems
A large national bank’s financial system is tailored to its operations. A small company can use off-the-shelf software and make do with any quirks.
And some companies need different systems for different parts of the business. A Big Pharma client needed “Best of Breed” manufacturing software to control production (including narcotics security), but a whole different system to support the chemists and different again to support sales reps in the field.
However, the basics of accounting hold throughout. Debits and Credits, what belongs on the balance sheet, and what needs to be expensed when. - Variety of control plans
Internal controls are not one size fits all. The controls in a bank or large retailer are different than an entrepreneurial company with far-flung locations that needed to adapt to local markets.
With the far-flung entrepreneurial company, many accounting duties were concentrated in one job so the field had one person to talk to at the head office. However, detailed individual operating unit budgets, timely reporting, analysis, and KPIs were needed. With creative, detailed effort, the company compensated for the concentration of duties. - Assessing the risk when errors are found
No internal control system is perfect. No company can afford to be perfect. Errors and mistakes happen. The job then is to assess the potential for a systemic issue. A new auditor wants to pull the fire alarm and run screaming from the building. Judgment is needed and developed.
Accounting can seem like a low priority, but lack of attention can leave ownership in the dark about issues that can threaten a company’s continued success. If you need an accounting professional that can come up to speed quickly, understand your system, and internal controls, and assess risk, call Mark Twain CFO Consultants.
With over 40 years of experience in entrepreneurial companies, including 6 years at the top of the profession at Price Waterhouse, our principal, John Salmon is available to meet and discuss your needs and what you feel is missing. We will roll up our sleeves, dig out reality and communicate it to you clearly.
Contact John at 312-479-0963 or you can email at jsalmon@marktwaincfo.com