Atlanta, GA

The Practical Controller

Accounting Efficiencies, Insight and Leadership

John D. Griffin, CPA, CGMAOctober 7, 2013

Financial Management and Human Resources Forum

Today’s Goals

Practical help regarding• Closing your books earlier• Better reporting• Empowering staff• Exceeding organizational expectations• Easing & accelerating the external audit process• Managing your boss & Board• Managing yourself

October 7, 2013

Today’s Journey…

• Jan through Dec 2014 (Sep 30 YE)

• Assumptions

• Non-profit organization

• Under-staffed

• Revenues are down

• Headhunters are calling your discontent staff

• Program staff complain about reporting

• The Board is confused and less than happy

• You are the CFO/Controller/Manager – you are the leader

October 7, 20135

“The role of leadership is to transform the complex situation into small pieces and prioritize them.”

~ Carlos Ghosn

6

January 2014Focus: Listen & Look in the Mirror

The Audit/Finance Committee Meeting – Jan 12, 2013• Audit report dated Jan 10, 2013 (Sep 30 YE)

• Took 90 days to complete the audit

• Mailed two days before Board meeting • They don’t understand your November reports

• “where’s December’s results?”

• “Why did you spend ‘too much’ in temporarily restricted and run a deficit this year?” – etc., etc…

April 22, 20238

January 2014Focus: Listen & Look in the Mirror

• They lack focus on the important issues – too much “noise?”• Members only had two days to review materials• Defensive answers • But, we worked harder this year than ever!

Meet with Board members and program leaders one-on-one• Listen. Then listen more. • Do they even know what questions to ask you?• Look in the mirror and be honest (from their point of view)

April 22, 20239

“Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall.”

~ Stephen Covey

10

February 2014Focus: Clear Reporting

Create more “strategic” reports for Board & management• Put yourself in their shoes• Be clear. Be concise. Have a point of view.• Focus on one or two main points each month• Brainshark

October 7, 201311

February 2014Focus: Clear Reporting

• Always put your issue in context• Headline your reports – like a newspaper

• Get to the point, then give details…• Consider a “flash” report if timing is too long

April 22, 202312

Monthly Number of Vouchers Processed

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Cumulative YTD

2009 10,277 14,235 14,778 24,739 22,610 19,811 16,947 26,012 24,101 18,233 26,141 29,246 247,130

2010 11,425 15,229 17,654 26,223 27,572 22,440 18,240 16,932 18,487 19,953 22,283 25,536 241,974

2011 12,581 17,552 22,962 22,368 33,255 27,035 19,526 20,916 18,679 22,107 21,965 25,658 264,604

2012 17,324 20,474 32,275 30,275 90,416

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Invoices Processed(yearly comparison)

2009 2010 2011 2012

Monthly Number of Vouchers Processed

Finance Saved $300,000!

• Overall AP volume increased by 30% in 2012 compared to same period 2009. • FTEs should have grown by 30% (4 additional FTEs)• Due to efficiencies in AP, actual FTEs shrunk by 15% (2 less FTEs) • By focusing on efficiencies, AP saved the Company $300,000 (6 FTEs)

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Cumulative YTD

2009 10,277 14,235 14,778 24,739 22,610 19,811 16,947 26,012 24,101 18,233 26,141 29,246 247,130

2010 11,425 15,229 17,654 26,223 27,572 22,440 18,240 16,932 18,487 19,953 22,283 25,536 241,974

2011 12,581 17,552 22,962 22,368 33,255 27,035 19,526 20,916 18,679 22,107 21,965 25,658 264,604

2012 17,324 20,474 32,275 30,275 *90,416

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

5,000

10,000

15,000

20,000

25,000

30,000

35,000Invoices Processed(yearly comparison)

2009 2010 2011 2012

“The more articulate one is, the more dangerous words become.“

~ May Sarton

16

“The growth and development of people is the highest calling of leadership.”

~ Harvey S. Firestone

18

March 2014Focus: Staff

Get the right people on the bus• You’re only as good as your staff• Talent really matters (or, train as best you can)• Reorganize if necessary• Ensure staff are properly leveled & JDs are current• Establish back-ups (you are not your staff’s backup!)• Meet together often – and don’t forget to listen

October 7, 201320

March 2014Focus: Staff

• Use direct delegation

• Use “process” delegation

• A Junior Accountant can “manage” a Senior Accountant in a specific process – it’s ok…

• Simply make a request of staff

• A simple, yet effective tool• Provide CPE/continuing education – budget for it • Engage them with your local state CPA Society

April 22, 202321

“Leadership is the art of getting someone else to do something you want done because he wants to do it.”

~ Dwight D. Eisenhower

22

Table Discussion

What issues do you have with your independent auditors?

24

April 2014Focus: The Audit

• Start reviewing minutes of Audit/Finance Committee

• Board hired new independent auditors – oops, forgot to tell you!

• Meet with new auditors – often

• Ask their opinion on Board financial management reports

• Crowd the preliminary work

• Get PBC lists early

• Delegate PBC lists to staff – matrix review of all PBCs

• Prepare your own statements – even if only a draft attempt

• Ask the auditors, often, “Are you happy?”

October 7, 201325

May 2014Focus: Process Improvement

• Image all documents

• Invoices, JE back-up, W-9’s, ACH info, policies, etc.• Consider workflow, even if just using email

• JE sign-off – in-system

• Both “Prepared By” and “Approved By”

• Eliminates auditor comments of unapproved JEs• Centralize accounting – eliminate shadow systems• Standardize reporting

October 7, 201326

May 2014Focus: Process Improvement

• Payroll

• Institute variance reporting to further identify errors

• Web-based W-2’s • Internal audit/review

• Don’t audit everything

• Use a risk based approach – and really follow up

April 22, 202327

June 2014Focus: Strengthen the Monthly Close

• Engage AP

• Teach AP about accruals and what to look for – not the invoice date!

• Call top x% vendors – vendor statement review looking for invoices & accruals – start 4 days before month end

• Provide all subsequent invoices over $X to accountants

• Focus on reconciliations

• Only reconcile prioritized accounts during close

• 100% reconciliation in May and Oct

• Question underlying processes

October 7, 201328

July 2014Focus: Shorten the Monthly Close

• Cut it in half – I double-dog dare you!• Better use of estimates – six hours spent clarifying $200?

• How crucial is precise investment income?

• Estimate routine transactions/revenues based on budget or prior months

• Consider non-operating section for internal financials• Review for accruals prior to month end, not just after• Agree with CFO/management on materiality

• Will a 2% variance really change management’s decisions?

October 7, 201329

“I think a major act of leadership right now, call it a radical act, is to create the places and processes so people can actually learn together, using our experiences.”

~ Margaret J. Wheatley

30

August 2014Focus: Policies & Documentation

• Travel reimbursement review limits – audit %, not all

• Tell staff they’re important - get them their money quickly!

• Eliminate receipts for transactions under $xx• Assign a staff accountant to research and list all new GAAP, with

applicability, for your review• Set policies for monthly/YE accrual limits

• Discuss with auditors• All policies & procedures online, in one place

October 7, 201331

“If you didn’t document it…you didn’t do it!”

~ John Griffin

32

September 2014Focus: Audit Prep

• Management prepares audited financials

• Grow your staff’s skillsets – let them do it

• Staff draft financial statements, FUP from March• Review footnotes now for changes, early internal review

• Review prior year audit entries • Never make the same mistake twice• Review, correct & document management letter findings

• Controller reviews PBCs instead of prepares

• Tier PBC due dates

• Legal & others review FSs prior to auditor

October 7, 201333

October 2014Focus: Work Hard

• Close YE much earlier last year

• Frequent short update meetings with staff

• Auditors complete report – earlier than ever

• They say, “You’re their favorite client!”

• Internal financials provided to CFO and Board earlier than ever – actionable information

• Get ‘er done!

October 7, 201334

November 2014Focus: Benchmarks

AP• Cost per check• Timing – vendor to org, approval to AP, etc.

T&E Reimbursement• Timing – input to approval; approval to payment

Payroll• Error rate % - based on manual payments• Number of unsigned timecards, etc.

October 7, 201335

Management is doing things right; leadership is doing the right things.

~ Peter Drucker

36

SELF5%

PEERS5%

Boss5%

STAFF85%

(Bill Hybels & John Maxwell)

The Traditional Leader

The 360 Leader

SELF50%

PEERS15%

CFO20%

STAFF15%

(Bill Hybels & John Maxwell)

0

Boss5%

SELF5%

STAFF85%

PEERS5%

December 2014Focus: You!

Myers-Briggs ISTJ• ISTJ = Introverted, Sensing, Thinking, Judging• aka, the Financial Manager…

April 22, 202340

December 2014Focus: You!

ISTJ• Quiet and reserved• Loyal, faithful and dependable• Believe in laws and traditions• Difficult time saying “no”• Work long hours • May be unwittingly taken

advantage of

• Must see practical application

• Tremendous respect for facts• Not naturally in tune with own

feelings and feelings of others• Family-minded• Don’t give themselves credit for

own achievements• Tremendous amount of

potential

April 22, 202341

December 2014Focus: You!

• You are the leader

• Your staff, your boss, your organization needs you

… even your member organizations… and those they serve

April 22, 202342

I think it is important for people who are given leadership roles to assume that role immediately.

~ Bob Iger

44

Year in Review

• Month/Year-end close completed earlier

• Audit completed earlier

• Earlier Audit Committee meeting

• Auditors praise your efforts – even in executive session!

• Your boss looks good

• Better documentation

• Staff engagement & morale – better than ever

• It was a great year – celebrate with your entire team!

October 7, 201345

The leader has to be practical and a realist, yet must talk the language of the visionary and the idealist.

~Eric Hoffer

47