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Why is the administrative accountancy process so important

According to a CISCO systems report; 70% of all businesses that experience a major loss of data go out of business within 12 months. It is possible to deduce therefore, that a partial loss of data poses a threat to your business. This raises the all important question, what data could you be missing from your business?

One must remember that human fingers grace our keyboards, rapidly entering (or not entering) data into the companies accounts system. Those human fingers often belong to persons within under resourced departments, and are connected to clever minds that have worked out how the software functions, rather than being taught the absolute scope of the software, its risks, its limitations and its time saving short cuts.

Humans send out and receive goods, sometimes without the correct information recorded on the docket and financial is sometimes bundled together or incorrectly allocated within the software, as it seems like a sensible idea.

The role of a finance and administrative process consultant (F.A.P.C), is to help businesses remove gaps or risks from the wider process (outside of the software) as well as what goes on withnin the software.

  1. The scope of the project is to ensure the coorect and accurate collation of data, and seeing that it is entered into the accountancy system with minimal risk to the integrity of the data.
  2. The second step is to identify the processes that the management team believe that they are using in respect to any action or decision that may generate income or lose money.
  3. The third stage is to review these processes with the management team, and either agree to make those processes official policy, or to stop them or to modify them.
  4. The agreed policies are then written down as a protocol (instruction manual) on how to ensure the financial data pertinent to the business is collated (before it gets to the accounts department) and how that data is stored both as paperwork and within the accountancy software.
  5. The (instruction manual) is then presented to the management team and all parties are  coached to use it.
  6. The process is then reviewed to ensure that there are no deviations and that the resultant data (now contained within the accountancy software) is good.
  7. Consideration is also given as to how best to back up and store idata. Once agreed, frequent exercises will occur to check that data can be restored, and that the softare functions correctly thereafter.

The resultant data will shape and improve the quality of the firms P&L, balance sheet and management accounts. These can in turn be used more effectively by the chartered accountants and management team to make informed decisions based on a clearer understanding of the business.

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