What Are the Negative

What Are the Negative & Positive Impacts of Computerizing an Accounting Department? by Jackie Lohrey, Demand Media

Computerizing your accounting department can simplify year-end tax preparation.

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How to Insert an Attachment Into an Excel Spreadsheet Negative Impacts of Telecommuting What Is a Good Typing Speed Per Minute? How to Delete Synced Pictures on an iPhone How to Start a Clothing Business With Buying Wholesale Economic Definition of the Four Factors of Production Making a decision to computerize your accounting department is not as simple as “yes” or “no.” Whether you have an accounting department of one or 100, the decision you make will affect not only your accounting department but also individuals in other departments. Because of this, a thorough analysis of the impact -- both negative and positive -- is an essential first step in the decision-making process.

Time When considering time, many only think about it in a positive light. On the one hand, it is true that employees can perform tasks such as double-entry bookkeeping, filling out spreadsheets and creating financial reports faster using a computer. When you need information quickly, this aspect of time can be a major advantage. On the other hand, time has an associated cost that you must consider. For example, a computerized accounting department can take a considerable amount of time to set up and implement, especially if you have a large company and decide to implement changes in stages. In addition, you will need to spend time conducting both initial and on-going employee training. Finally, you need to consider the cost time lost if computer problems cause a system failure.

Accuracy While a computerized accounting department can lead to greater accuracy, it can only be as accurate as the information it contains. When initially entering information, a computer does not know if an employee transposes a number, misspells a name or forgets to input a receipt. In addition, it is a mistake to assume that computerizing your accounting department is a quick fix for internal problems such as employees lacking the appropriate skills, poor supervision, and management and/or inadequate company policies.

Risk Computerizing your accounting department can reduce the risk of long-term fraud and embezzlement from within your company. Computerized systems often include built-in fraud detection features such as information duplication and automated audit or transaction trails that, in combination with reporting procedures, can alert you to suspicious employee activity. However, computer systems do not come entirely without risks. Confidentiality and data integrity -- two of the most critical -can significantly compromise your accounting system and put your entire company at risk if either should occur.

Monetary Cost You may find it possible to reduce the overall size of your accounting department and, with proper training and supervision, allow less-skilled employees to work within the department. This can save on labor and employee benefit costs. An efficient computer system can also reduce costs associated with end-of-the year accounting and tax return preparation. That said, while it may be relatively easy to plan for direct costs, the hidden and future costs can be difficult to plan. The price of equipment, upgrades, data storage and technical support can place a considerable strain on your budget.

What Are the Negative & Positive Impacts of Computerizing an Accounting Department? by Isobel Phillips, Demand Media

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The cost of small business accounting software and the ease of setting up small networks make computerized accounting an attractive idea for many small businesses. Unless carefully planned and managed, the impact of computerization on an accounting department may not be wholly positive. It's important to be aware of the factors involved and their potential effect on employees and customers. Some of the negative effects may be reduced by computerizing only part of the system or by introducing it in planned stages. Cost

If the business already uses computers for some tasks, extending that use to the accounting department may not be a significant expense. There will, however, be a capital outlay and an ongoing financial cost for software, equipment, security systems and staff training. Existing staff will need training, and not all of your employees will be able to adjust to the new system. Once computerization has been fully implemented, you may require fewer employees to run it on a daily basis; this creates a human cost alongside the financial savings. Speed and Accuracy

While computers can process data more accurately and quickly than humans, computerized accounting systems are still subject to the same human errors as manual systems. Employees are likely to make a lot of data entry mistakes initially; you will need to allow extra time for checking and also for running the manual and computer systems concurrently for at least a few months. Computerized accounts are always in balance and reports can be accessed on demand, so employees spend less time on tedious tasks. Security

Computerized systems are at risk from system breakdowns, and data can easily be corrupted unless you install effective back-up procedures and ensure they're implemented rigorously. The nature of accounting software means that employees may have access to far more sensitive and confidential information about the company, its employees and its customers than under the manual system. Some employees may respond by acting more responsibly, but others may need to have their access restricted. Information

Managers can access a wide variety of reports on demand and in greater detail than under a manual system. Credit control is usually improved and employees are able to respond to account queries quickly and accurately, providing better customer service. There may be less interpersonal communication between different areas of the business if other employees can download reports directly to their computers and accounting employees may feel less valued in consequence.

Solve the Mystery of Staffing Your Accounting Department You are either spending too much or too little time and money to get what you need (and should expect) from your accounting and finance depa

Ken Kaufman President and CFO, CFOwise

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MAY 24, 2010 You are either spending too much or too little time and money to get what you need (and should expect) from your accounting and finance department. Most startup, entrepreneurial, and growing businesses struggle to solve the mystery of how to properly and effectively structure their accounting and finance department to maximize the value they receive from it. There are basically three Tiers to running an accounting department, whether large or small. Tier 1, which is the lowest in terms of compensation and hierarchy, includes data entry and other routine tasks like receiving, entering, and paying bills and entering timecards for payroll. The middle Tier includes somewhat higher level tasks like reconciling accounts, ensuring receivables are entered accurately and correctly, managing cash, and providing some reporting to management.The highest Tier focuses only on high level accounting entries, financial statement reporting and analysis, accounting/ERP system design and structure, training others in the accounting and other departments, forecasting, and helping make strategic decisions

that impact the company's operations, bankability, taxes, competitive advantage and much more.

Big opportunities can make or break a business. See how these small-business owners got the job done. Go Now Giving one person the responsibilities of all three Tiers is irresponsible, especially if you expect that person to perform them all efficiently and at the lowest cost possible. Either the person does not have the right background to do it all, or, if they do have the right background, you end up over-paying them to do routine and simple tasks. Knowing that most companies cannot afford to hire someone in all three Tiers right away, what is the best way for a business to get everything it needs for the best price? Start by hiring a very part-time independent bookkeeper or bookkeeping solutions that can recommend an affordable accounting system that they know and can train others to use to fulfill Tier 1 tasks. This person will fulfill items in Tier 2 and a little bit of Tier 3 initially, and they can be as affordable as $100/month. The bookkeeper is essential because they will make sure your business is compliant and even getting a little bit of strategic data. Then have this person train lower cost employees to handle the Tier 1 functions. This will be a very good and healthy start, although some of the Tier 3 functions will not be covered. This will be OK in the interim, but ultimately

most businesses cannot neglect Tier 3 for too long without suffering negative consequences. Finding the right part-time bookkeeper is not always easy. They need to know your accounting system and have some experience in your industry. Some CPA firms have bookkeepers on staff that they hire out to their clients, but more affordable options exist in the form of independent bookkeepers if you put in the effort to find them. There are usually ample options in every market, and they are often more affordable and more flexible to best fit your needs. As the company grows the part-time bookkeeper may need to put in more time, but the bulk of the work will be absorbed by lower cost employees in Tier 1. The uncovered parts of Tier 3, like forecasting and strategy, will need to be solved by another part-time addition to the team, and they are usually referred to as a part-time or outsourced Chief Financial Officer, or CFO. The CFO Services these professionals offer have grown in popularity and demand over the last decade because of the affordable and high-impact solutions they offer. For more information on the right time to engage these services, read my recent article, 4 Signs You Need a CFO. Ultimately the part-time bookkeeper will become overwhelmed by the time and expertise demands of the company and it will make sense to bring on an Accounting Manager or Controller full-time to handle all of the Tier 2 functions as well as assist in the fulfillment of the Tier 3 functions. The last full-time hire in a company's accounting and finance department should be the CFO. Not only is the CFO the most expensive position in this department, but it also requires the least amount of time dedicated to it. It will also need to become full-time when an organization grows so large (usually over $50 million in sales) and too complex (multiple locations,

international expansion, multiple business models, etc.) for a part-time solution to truly cover all the needs of the business. You can solve the mystery of properly staffing your accounting department by understanding these three Tiers of tasks and leveraging part-time and full-time resources to get exactly what you need at the very best price available. Ken Kaufman, Founder & CEO of CFOwise®, serves as the Chief Financial Officer for a dozen start-up, emerging, and medium-sized businesses. With almost two decades of experience and as an adjunct professor and published author, Ken focuses his professional efforts on helping entrepreneurs maximize cash flow, improve profits, and obtain clarity. https://www.americanexpress.com/us/small-business/openforum/articles/solve-themystery-of-staffing-your-accounting-department-1/

7 INTERVIEW QUESTIONS TO ASK WHEN STAFFING ACCOUNTING POSITIONS Posted by Carole Clark Thompson on Jun 20, 2013 2:14:00 PM

Behavioral Focus Interviews (or BFI’s) are widely used in recruiting accounting candidates as well as most professions. The idea behind this interview format is that past behavior is an indicator of future behavior. In an era of career changers and vanishing professions, the Behavioral Focus Interview is an effective method of determining if a candidate will be the fit you seek to fill your opening.

Core competency interviews highlight many essential attributes that are sought in any candidate for any position. The accounting field relies on competencies such as meeting deadlines, attention to detail, communication, teamwork, problem solving, accountability, setting and achieving goals. In all cases a Behavioral Focus Interview uses questions in a format of situation, action and result. Here are several you could use when staffing accounting candidates: 1. Meeting Deadlines: “Tell me about a time when you had various tasks to complete in order to meet accounting deadlines.”

2. Attention to Detail: Any accounting function must be completed precisely. “Describe the skills and tools you use to ensure that your tasks, reports, projects are completed precisely with complete attention to detail.”

3. Communication: Accurate accounting relies on effective communication within the accounting department as well as with other departments. “Describe an example of the effective communication necessary to complete an Accounting function.”

4. Team Work: Team Work is critical within the Accounting Department because all functions in all areas must come together to produce the Financial Reports. “Give me a recent example of you partnering with a member of your accounting team to ensure that all functions were completed accurately and on deadline.”

5. Problem Solving: With the closest attention to detail, the best communication, and the most effective team work; problems will still present themselves. “Tell me about a time that you utilized your problem solving skills to reach a resolution to an unexpected problem.”

6. Accountability: Everyone makes mistakes. Taking accountability for your errors is the key to successfully reaching goals. “Describe a recent situation when an error was discovered and how you responded to the situation.”

7. Goals: Each and every company, department and individual has goals. These may be goals that are set for you or goals that you set for yourself. “Let’s talk about a major goal that was set and how you were involved in reaching that goal.” In all behavioral questions, the desired response should be in the form of: situation, action, result. If a candidate does not provide those three crucial details, drill down with follow-up questions to determine the three key aspects of the Behavioral response. It is always a good idea to provide the candidate with the required format before asking the first question with something like “We are going to go through a series of Behavioral Interview Questions. Please respond to each with the situation, actions taken, and results.” Take note of candidates who struggle to respond. They either may not be able to answer the question or may not be able to display the desired behavior. If you hear, “Hum, there are so many examples, let me pick one” or “Oh this happens all the time, let me think of a good example.” These could be stall tactics. A well-qualified candidate should have a strong articulate response that can be used to quickly provide an example of the behavior. If you do not receive the specific details in a response, drill down for more detail. Observe the delays or pauses in the interview response. Ask additional questions to prompt or assist the candidate in providing you the information you seek. If you develop the impression that the candidate is having trouble thinking of a good response, this candidate may not possess the experience or have the qualities you seek in a candidate to fill your position. These types of behavioral focus interview questions give you good

insight into the way the candidate thinks, processes information and ultimately resolves situations. http://blog.hiregy.com/blog/bid/307515/7-Interview-Questions-to-Ask-When-StaffingAccounting-Positions