Reducing the Cost of Compliance: Standardised Templates and Workpapers

Reducing the Cost of Compliance: Standardised Templates and Workpapers

This is one of a series of articles published by Business Fitness on the steps to reducing the cost of a compliance job. For more articles on this topic, head to the compliance category.3

 

 

By far the easiest way for an accounting practice to reduce its compliance costs is to implement processes and systems which reduce the number of hours spent on a job by the most expensive team members in the practice – the reviewers! This is where the impact of relying on standardised workpapers, checklists and questionnaires is the most obvious.

By requiring staff to rely on best practice versions of these templates when preparing a compliance job, an accounting firm should be able to cut down on review time by 50% to 75% (indeed, this is typically what a client of Business Fitness – relying on Business Fitness’ own set of TemplatesNow accounting and tax templates – will achieve).

Standardised workpapers, checklists and questionnaires ensure that every job is prepared in the same format and according to the same procedure, making it much easier and much faster for the reviewer to review.

In preparing and implementing standardized templates, accounting practices should:

1. Design templates so that they facilitate maximum delegation: Senior team members should only be doing what only they can do – everything else should be delegated. Best practice templates should facilitate this by guiding junior team members on what the process is and why they should be focusing on.

2. Flowchart or document procedures with the steps involved in completing the job: For each type of compliance job, the steps involved should be clearly set out and understandable by all team members. The procedures should make reference to the specific templates (workpapers, checklists, questionnaires etc) that should be used to carry out any step in particular.

3. Include checklists which cover the steps required for any particular assignment: Checklists are vital. Their purpose lies in ensuring that none of the fundamental activities are overlooked and that all issues are raised and resolved. A best practice checklist should provide a choice of what will (or will not) be needed to be looked at or carried out for a particular job, should be able to be completed on-screen (i.e. without printing) and should provide supplementary explanatory information for more junior staff.

4. Include workpapers that are based on the most up-to-date regulatory and legislative rates and information: Best practice workpapers should provide for all reconciliations and should allow for review and sign-off.

5. Specify particular document filing protocols for the saving of documents within the practice’s document management system: This should include protocols for linking together different documents associated with the same job.

6. Make use of PDF editors to link, mark-up and sign-off source documents that are filed electronically.

 

 

Of course, having a set of standardised templates is just part of the story – communication is also key. It is a good idea for accounting team members to sit with reviewers during the job review process (at least for one job) so that they can note and learn from any items that were not sufficiently dealt with or any areas where information was lacking.

This combination of best practice, standardised templates plus strong communication will help to ensure that the bulk of the time is spent on preparing, rather than reviewing and revising, the job. The objective should always be to have the accountant get the work done correctly the first time and thereby avoid rework and associated ‘back and forth’ between the accountant and the reviewer.

 

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Written by HowNowHQ View all posts by this author →

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