Direct work attributed to: Kay
The Challenge
- There was a knowledge gap within the accounting team, making certain reconciliations incredibly difficult to process.
- All of the senior accountants were stressed, overwhelmed, and none had the support they needed.
- Vital processes needed to be established without anyone available or qualified to do so.
- Intertwined locations and entities made the accounting environment difficult for everyone. There were 7 entities controlling 2 to 4 locations each, rolling up to one umbrella company. Bills were paid within every layer and had to be accounted for in that manner. This meant that each accountant needed to wait for another accountant to finish one thing, before they could finish their own tasks.
- Transactions changed constantly because the system wasn’t locked down as it should have been.
- Cash was an abyss of confusion that was preventing operational oversight.
After grinding through the Michigan State Wholesale Audit, the month-end close was the next task to tackle.
The Solution
The Solution
Work through the information currently in the system to identify gaps in data, understanding, and the various transaction inconsistencies in the system. Power through the corrections and missing data to get caught up on the month-end close, document along the way.
Step 1:
Identifying failures & finding solutions.
Each entity and location was reviewed for potential and actual accounting impact. A review of all month-end processes and accounts was completed to find out what areas were failing and directly delaying the close. After digging into every facet of the failing operational and accounting processes, the collaborations began.
Step 2:
Getting to work and establishing accuracy.
Digging through months of data, cash logs, armed security transfers, location identification and isolation of related transactions, the corrections were underway. Once the transactions were validated as legitimate, each account on the financial statements was fully reconciled using various internal and external reports. Substantial errors were corrected, the Balance Sheet was up to date and the Income Statement reflected the one-time cleanup adjustments, which were explained to the executives promptly.
Step 3:
Implementing new processes to move forward confidently and accurately.
The Results
When the cash-in-safe, debit card processing, ATM tracking, and bank balances were corrected, revenue dipped heavily and the executives were able to see that an operational failure needed to be addressed. This was a direct result of a cash-in-safe knowledge gap within the team and triggered immediate logging and oversight where there was none before. The business was finally able to file their taxes and lock down the year. Technically the dip in revenue had a positive impact on their bottom line, from a tax perspective. From a business perspective however, this was a disaster. With half a million dollars in funds written off [missing], everyone was paying attention. A manager at one of the locations was identified for fraudulent activities and was let go. They now were able to establish internal controls to move forward and minimize risks.
The accounting knowledge gap behind money management accounts was eliminated with new processes and additional support. The month-end was now able to be processed successfully for all locations and the way forward was clear. The project was finished and the project was a true accounting success and an operational bridge was built to withstand.
Ask us how we can help.
Many companies struggle with problems like these. Maybe you have something a little different going on, or maybe you just need help and don't know what you need. You don't have to know everything about your accounting right now. You don't need to know how to do it, just how to recognize it. Reach out so we can get you there.
