Joanne Seeds – Making Sense of Numbers!

Deep, deep below the surface lies a dark secret.  No one can define it or say what it is made up of.  It is growing, becoming more and more ominous.

It is the Accountant’s nightmare.

That one account, one reconciliation, one process that no one has been able to define.  No one wants to touch it, so it grows silently waiting in the shadows.

Almost every company has one.  Someone understood it at one point but the knowledge has been lost.  Undocumented or out dated documentation has put the process at risk.  Over the years changes have been made, and now it is a large black hole.

At some point in time, someone has to figure it out.  This takes skill, knowledge and attention to detail to determine all the pieces of the puzzle.

Where do you begin?

  • Start with understanding what the process is designed to do, and the major steps required.
  • What are the components and what systems are used to transfer the information from one stage to the next?
  • Visualize all of the components and their affect on the process.

Whether you are reconciling an account or analyzing costs in the inventory system, the related components need to match.

As information moves from one process to the next, it is important to ensure that you can understand the steps, what happens, the controls and what triggers the next step.

Disconnects can occur anywhere – and within the ERP environments, this can get extremely complicated.

Once you understand the components, it is time to get further into the detail of the entries.

  • How are the entries calculated?
  • Is there any data missing?
  • Does the data leaving one system equal the data going into the other?
  • What is missing?

Communication is so important and it may take several conversations before you completely understand all of the components.

Now you become the detective.

Going through all the steps, following data from one system to the next ensuring continuity.

Using broad strokes at first, data can be narrowed down finer and finer defining what works and what doesn’t.

Success, you have defined the problem and are working towards the solution.

Your biggest problem now! Document your findings, set up controls and ensure that all parties understand their role in the process.  The better everyone understands the lower the risk of problems in the future.