Page 1 |
Previous | 1 of 7 | Next |
|
This page
All
Subset
|
speeding Up Closings by Richard A. Patterson The need for timely financial information by decision making executives and the urgency of communicating periodic as well as annual results of operations to shareholders and other interested parties is well recognized. These requirements have placed an increasing responsibility on financial management to speed up the information system. The purpose of this article is to discuss Certain techniques that have proven helpful in accelerating the closing of the books and preparation of financial and other operating reports. The most important single factor contributing to faster closings while attaining the desired level of accuracy is a strong system of internal control coupled with well organized and documented accounting policies and procedures. The first step for a company embarking on a "speed-up" program is a re-evaluation of those factors influencing the capabilities of the accounting system with corrective action taken where necessary. Tighten Up the Accounting Procedures One of the most important of these factors is the standardization of the accounting system. Preprinted standard journal entries should be utilized to insure that all entries are recorded and to reduce routine clerical effort. Standard charts of accounts and preprinted standard trial balances should be developed. This is even more important in a multi-unit company where the consolidation process is time consuming. It is also helpful to maintain individual divisions, plants, or subsidiary companies on a consistent accounting basis without regard for changes in tax laws, etc. Most changes necessitated by tax considerations can be made on a consolidated basis instead of at local levels with attendant re-training and other complications. The number of general ledger accounts should be kept at a minimum with liberalized use of subsidiary ledgers. Although the subsidiary ledgers should be retained on a permanent basis, they do not necessarily have to be formal ledgers, but could consist of handwritten work papers. This approach reduces the number of journal entries to be written, speeds up posting and balancing, and allows several people to work on various aspects of the ledgers simultaneously. Another technique for reduction of clerical time and effort is rounding. Although there are some general ledger accounts such as Receivables and Payables which generally are recorded to the penny, many accounts (and related journal entries) can be rounded to the nearest dollar, reducing the number of digits to be written and balanced by a considerable percentage. In large companies many reports can be rounded to the nearest thousand or ten thousands. 2 THE QUARTERLY
Object Description
Title |
Speeding up closings |
Author |
Patterson, Richard A. |
Subject |
Management Accounting -- Management Fiscal year |
Personal Name |
Patterson, Richard A. |
Portrait |
Patterson, Richard A. |
Office/Department |
Touche, Ross, Bailey & Smart. Detroit Office |
Citation |
Quarterly, Vol. 13, no. 3 (1967, September), p. 02-08 |
Date-Issued | 1967 |
Source | Originally published by: Touche, Ross, Bailey & Smart |
Rights | Copyright and permission to republish held by: Deloitte |
Type | Text |
Format | PDF image with OCR under text, scanned at 400dpi |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi. Digital Accounting Collection |
Date-Digitally Created | 2009 |
Language | eng |
Identifier | Quarterly_1967_September-p2-8 |