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Turn Over a New Cliché: Adopt Best Practices
Turn over a new leaf. Make a New Year's Resolution. Make a fresh start. Get your ducks in a row. All familiar clichés, but their message is valid: At this time of year, you probably feel like renewing your commitment to running a more successful, productive business.
There are numerous ways to do this, but you might consider adopting the concept of best practices (if you haven't already). Most industries have them, primarily larger businesses. Best practices are a set of operational guidelines that are expected to produce a favorable outcome. Run your business using these techniques or methods, and you're likely to be more successful.
Accounting has best practices. While they're not carved in stone, sticking with some tried-and-true, common-sense procedures will likely lead to increased efficiency. Perhaps adopting some or all of them will make a difference in your business. QuickBooks can help.
The Three I's
Let's look at the three stages you'll encounter when you decide to apply best practices to your company.
Identify.
What problems are you trying to solve? Where are your bottlenecks? Are collections a problem? Cash flow? Timely, accurate payroll? Have you seen a reduction in your customer base? Are your bills being paid late? Having trouble keeping up with inventory?
Bring your employees in on this process. They're on the front lines, and will have insight into where your systems are breaking down. They'll be pleased to be asked, and they may have ideas that will evolve into best practices.
Figure 1. When you're formulating ideas that could evolve into best practices, use your best resource: your employees.
Implement.
Turn your ideas into policies, and formalize them. Make a big deal out of introducing them to all staff related to accounting, and explain the rationale behind them. They're intended to improve your company's financial bottom line, which should translate into a positive outcome for everyone. Don't turn your presentation into a critique of past performance; emphasize the constructive nature of the changes. Put it in writing, too.
Here are some examples of best practices that other businesses have implemented.
· Invoice at the time of service/shipment, instead of once or twice monthly.
· Set a specific time interval to deal with collections, like once a week. If you're running QuickBooks 2011, you can use the Collections Center. Previous versions have numerous helpful reports, like A/R Aging Detail, Open Invoices, and Collections Report.
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