From the October 2010 Issue
Completing those projects you promised yourself you would complete before
the end of 2010 should be high on the list of most accountants toward the end
of the year. Thanksgiving and Christmas seem to take over many companies in
November and December, so accountants planning ahead should realize that October
is the last full month before the holiday season begins. New initiatives, which
begin in early 2011, must be planned now to ensure that you and your company
have a smooth year-end close. If you combine the impact of the holidays with
the extra work due to the year-end closing process, after this month, many accountants
will have very little time to work on project implementations until February
of 2011. In the event you’ve lost that list of things you promised yourself
you would do, here are some ideas for consideration:
1. CLEANING UP PERPETUAL INVENTORY RECORDS
Many organizations that have inventory on hand use a “periodic”
inventory system, where they only know the correct quantities on hand for items
on the day of the physical inventory count. Other companies know that their
perpetual inventory records are not reliable, and instead of trying to maintain
the records properly, they allow problems such as negative on-hand quantities
to create errors in unit cost records. If your organization doesn’t have
an accurate, real-time inventory by item, you may be missing sales of products
you have, and could be promising products to customers when you cannot deliver
because you don’t have them on hand. Peachtree supports all major inventory
costing methods, including FIFO, LIFO, Average Cost, and specific identification,
and also supports advanced features like serialized inventory tracking and automated
item reorder generation.
2. IMPROVING THE QUALITY OF INFORMATION RELATED TO MANUFACTURING AND PRODUCTION
ACTIVITIES
While the accuracy of item level inventory records is a concern for many manufacturers,
accurate reporting on the item-level costs associated with production runs of
individual items can help managers identify and correct problems in the production
process, saving time and increasing efficiency. Specialized manufacturing industry
versions of business management applications like Sage Peachtree Quantum –
Manufacturing Edition (which is bundled with the MISys manufacturing information
system) can help companies better report, monitor and track production cycle
activities.
3. CHANGING
PAYROLL SERVICE PROVIDERS
Accountants frequently express frustration with payroll services at points during
the year when they don’t have the time to re-enter the year-to-date information
needed to implement a new payroll service. Public accounting professionals who
currently offer or who are considering offering payroll services in 2011 should
be selling to new payroll customers now and adjusting their internal processes
to accommodate any new payrolls to avoid “crisis” situations around
the end of the year.
4. IMPLEMENTING A “CAFETERIA” (IRC §125) PLAN, A FLEXIBLE
SPENDING PLAN, OR OTHER EMPLOYEE BENEFITS
Companies may want to consider ways to reduce payroll and income tax liabilities
for both the company and employees by providing the option to pay for insurance,
child care and out-of-pocket healthcare costs on a pre-tax basis through arrangements
such as cafeteria plans and flexible spending accounts. Since many of these
plans are required to report on a calendar year basis, there will be a surge
of activity with most providers around the end of the year, and it may not be
possible to get the assistance needed to effectively implement some of these
plans if the process isn’t started now.
5. UPDATING FIXED ASSET AND DEPRECIATION RECORDS
Although it’s not a very exciting task, many organizations don’t
keep up with recording depreciation on fixed assets throughout the year. If
you’re one of those companies that’s behind on recording fixed asset
additions and disposals, you will want to catch up on these transactions now.
Most versions of Sage Peachtree (Peachtree Complete and above) include a fixed
asset application, Sage FAS for Peachtree, which will calculate book, federal
tax, ACE/AMT, and state tax depreciation accurately, and can be configured to
automatically post depreciation entries to a client’s general ledger.
6. REVISING PAY PLANS FOR COMMISSIONED SALESPEOPLE
Since many pay programs for commissioned salespersons are evaluated and revised
annually, you may want to perform some proforma analysis for your executive
team to use in evaluating the impact of any proposed changes in compensation
plans. Business management applications can also be configured to track sales
by sales representative (with some limitations). If automating this type of
reporting plays a role in your 2011 pay plans, you may want to review the reporting
options for your software and see if it will meet your needs for tracking sales.
7. ANALYZING AND RECONCILING OUTSTANDING BALANCES TO SUPPORTING DOCUMENTATION
Although it’s not the most exciting part of the job, you might spend some
of your October reconciling the open items on your major vendor and customer
accounts to the records of the other party. Almost every organization that sells
products or purchases supplies on account has old items in their accounts payable
and/or accounts receivable that need to be resolved. Fixing these problems could
produce some income tax benefits for 2010, and might make you less stressed
when auditors arrive.
8. REVIEW JOBS IN PROGRESS
With the end of the year approaching, now is a good time to review the status
of jobs that will be in progress at the end of the year, and begin to identify
jobs which may have revenue and expense recognition issues at year end. It may
be useful to review the activities to date and, where possible, make revisions
to the estimated time and costs to complete open projects.
9. SPEEDING UP CUSTOMER COLLECTIONS
With the recent disappointing economic news, many organizations are trying to
reduce their need for working capital by re-evaluating customer credit limits,
updating payment terms, and taking credit card payments. New services such as
Sage Payment Boss (www.sagespark.com) make it possible for companies to receive
credit card payments using many 3G smartphones. Service providers who send personnel
to customer locations like plumbers, electricians, mechanics, lawn services,
and pest control specialists can securely receive a customer credit card payment
as the work is completed, eliminating the need for customer statements and collection
calls.
10. TAKE TRAINING FOR YOUR SOFTWARE APPLICATIONS
Whether you are working around configuration errors in your accounting software,
tracking items in databases and spreadsheets, or just spending too much time
fixing errors, October is a great time to take some live or online training
on your software applications. Training courses teach users to work more effectively
and efficiently with existing applications, and can help you better understand
your options for automating manual tracking and reporting processes. You may
want to consider training courses from software publishers (like Anytime Learning
for Sage Peachtree), professional organizations, independent providers like
K2 Enterprises (www.k2e.com)
or The Sleeter Group (www.sleeter.com),
or offerings from accounting firm leadership communities like RootWorks (www.rootworks.com)
or Boomer Consulting (www.boomer.com).
It’s time to dust off that list of financial projects, roll up your sleeves
and get to work on projects to simplify your work life in 2011. What are you
doing today to make your work better, faster, easier, more efficient, and otherwise
more fun in 2011?
One of the benefits of a reliable item-level inventory database is the automatic
generation of purchase orders for replacement items based on factors such as
minimum stock levels, quantity on hand, and sales order activity, as shown in
this screen capture from Sage Peachtree Quantum.
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