Weekly Tip

Where Did The Accountant Go?
By Leslie Shiner

In the old days, when I walked five miles to school in the snow, my grandfather’s company had a room full of bookkeepers and one accountant - a feared and powerful man. He supervised many employees, all with hunched backs, green eye shades, and rows of sharpened pencils.

Today, the accounting functions have changed dramatically. Thanks to the wonder of easy to use accounting software, many small companies have only one bookkeeper who is responsible for all the bookkeeping. That person turns the books over to an outside CPA who then prepares the tax return. Where, you may ask, is the accountant? Have bookkeepers of today become so much smarter than ones twenty-five years ago? No, they have not; in fact they probably have less accounting and bookkeeping knowledge than their predecessors who spent many hours toiling over adding machines, trying to find that $.09 error.

As simple accounting software has become prevalent in today’s office, much of what the bookkeepers and accountants did can be done by a computer more quickly, simply, and without math errors. This is great. Now what use to take many hours takes very few. So if you have a bookkeeper and the software, there’s nothing else to think about, right?

Wrong. The one thing a computer can’t do is analyze the numbers for accuracy or understanding. The computer can’t tell you that your bookkeeper has been coding all outgoing invoices to a liability account instead of an income account. Or that the fixed assets contain all purchases for office paper products and disposable toner. Or that even though the computer program is automatically recording all payroll taxes, the bookkeeper is showing those expenses twice because payments for those accrued costs are not being coded correctly. Or that the bookkeeper has no understanding of bookkeeping or the difference between an asset, liability, income or expense account. In fact, one unintended effect of making accounting software user-friendly is its tendency to mask the errors of untrained workers. Everything may look good, whether it has been entered correctly or not. To twist an old phrase, “That’s what the accounting report says, so it must be true.”

The tasks that the staff accountant once did have been lost in today’s small business today. What’s the solution? Hire back an accountant in your office. No need to put a new full time person on payroll, but find a way to put back the accounting functions in your office. There are several options:
• Is your CPA interested in reviewing your books - keeping contact on a quarterly or semi-yearly basis? Is your CPA even asking you questions or making suggestions? Perhaps you need to find a new CPA, one who will take more action on your behalf.
• Find a consultant. But be sure it is one who not only understands your financial software, but our specific industry as well.
• Find a way to review your bookkeeping functions. Would you take the word a designer on the needs of the client without interviewing the client yourself? Find a way to understand your own financial progress - historically and pro-actively.

The problem with most accounting problems is that they can go on a very long time before you actually notice that something is wrong with your statements. And you just can’t put your hands on the problem. It is like installing the wrong speakers for the room size - once the job is finished, it may be a while before the problem is noticed. But by then, the system no longer works as scoped and your client is inconsolable.

Therefore, find ways to have your numbers reviewed by someone who understands numbers. Ask simple questions on a regular basis to verify the accuracy of your financial statements; otherwise you may be operating on false assumptions.

Let’s bring back the accountant. But this time, let’s make him or her a valuable asset to the company: one who can not only help you determine if you are correctly recording your current information, but can also help you may decisions to become more profitable in the future. The true accountant is not dead, just a rare gem waiting to be found.

Leslie Shiner—author, speaker, and trainer—has more than twenty years experience as a financial and management consultant. She is the owner and principal of The ShinerGroup, a consulting firm helping businesses gain financial control. As a business coach, she has worked with both small and large businesses to help them better understand their business practices and maximize their profits. She is the author of “A Simple Guide to Turning a Profit as a Contractor.” Ms Shiner is an engaging speaker with a long history of rave reviews. She continues to receive high praise for her ability to make financial management interesting, understandable, and even entertaining.