Process: GL – Who’s on First?

Black wall with many tools in workshop

Is the expense captured in an account? Is it the exact, technically correct accounting classification? Maybe not, but it’s been captured in a bucket that is very close.  Don’t miss the forest. This is an area that requires thoughtful balance.  Who knows the chart of accounts best in your organization? If that is you, and you are the CFO, Controller, or Accounting Manager, that’s great.  But who cares.  Sorry to be harsh but no one cares if you know it best.  There are no awards or medals for that one.  But, if you really care about speeding up the close and making it more accurate, read on.  If you are still offended, well that’s your right. The rest of us have moved on in the interests of continuous improvement.  The team members who know the chart of accounts best should be the following: your Purchasing Team – they are generating the PO’s and that is where most of the coding of expenses gets started, and your Accounts Payable Team – they are coding the invoices that no one knows where to code, or the random ones that come in.  What, someone else is coding them?  Your controller? CFO? Accounting Manager? No, no, no. There is absolutely NO VALUE to having anyone code invoices other than the two teams mentioned above.  I will grant you half a dozen a year to personally code since there are some invoices that come out of right field.  But that’s it.  Train the two teams to know the chart of accounts inside and out, where new accounts should be added if you even need that new account.  Have them write the book on the chart of accounts classifications for your company.  Have them correct you about coding.  It is one of their PRIMARY job functions.  Sure you might be responsible for the accuracy of everything, but that doesn’t mean that you actually have to do it.  You will be rewarded handsomely by doing this.  When is the best time to do this…you know the answer, but for those who have skipped ahead without reading any other ideas, I will repeat it.  Right NOW.

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