Standardisation: Reducing Risk and Improving Efficiency (pt. 1)
This is the first of three articles published by Business Fitness on reducing risk and improving efficiency through the standardisation of procedures and templates. To read the rest of these articles (when published), head to the standardisation category.
Part 1: Identifying the issues
A lack of standardised procedures and templates – or a set of procedures and templates that are out-of-date or fail to represent industry best practice – not only presents a challenge for accounting firms from a risk management perspective, but it is also a major cause of inefficiency. Ultimately, inefficiency results in longer job turn-around time when all accounting firms need to be concentrating on reducing these costs.
It is simple to understand why an accounting firm should have up-to-date and best practice procedures and templates in place – but what might come as a surprise is that it is also relatively simple to understand how to go about implementing these in your practice.
In parts 2 and 3 of this article, we break this down into a 10-step strategy that any firm will find useful. Even if you are very confident that your procedures and templates are up-to-date and represent best practice, we encourage you to review your position against the steps set out below.
A quick word before you start: how to recognise if your firm has a problem
How do you know if your procedures and templates are out-of-date or do not reflect industry best practice?
We suggest that you ask yourself a few simple questions, such as those listed in the table below. We’ve also included the answers that you should have for each question – if your answer is different, it is likely the case that your procedures and templates require immediate attention.
Do all my staff know where to go to find out which tax rates they should be applying on all jobs being completed this year? Yes.
Are these up-to-date rates all included in our standard workpapers for this year? Yes.
Do junior staff frequently approach more senior staff with questions such as, ‘I have finished task X for client X, what should I do now?’ No.
Do reviews of jobs frequently revel errors such as those relating to missing information or out-of-date formulas? No.
Are reviewers ever frustrated by reviewing work presented to them in an array of different formats? No.
Are they frustrated by the amount of time it takes them to review work? No.
Is any team member (or any group of team members) allocated responsibility for regularly ensuring all standard procedures, workpapers and other template documents are up-to-date? Yes.
Does this person or group have sufficient time to dedicate to this task? Yes.
If your firm has ever been the subject of a quality assurance audit or review by your accounting member body, did that audit or review expose any weaknesses in your internal systems relating to out-of-date procedures, workpapers or other templates? No.
Have these weaknesses been addressed? Yes.
What would a quality assurance audit or review reveal about your firm’s standard systems, procedures and templates if it were to take place today? No issues or areas of concern.
