Engagement
Development of processes and procedures
We write procedures for posting, billing, payables, and banking after we observe how the staff perform that work.
The source of the procedures
The procedures come from the people who post, bill, and pay, and from the books those people are keeping. We sit with them while they do the work. We do not begin with a template, and we do not begin with a description of how management believes the process operates.
Before anything is written, we read the trial balance, the receivables, the payables, and the bank activity in the accounting system the company already has. When a step exists only because one person remembers it, that step is written down. When the books and the stated process disagree, the procedure follows the books.
Posting, billing, payables, and banking appear in the procedures because we observed those routines. They are not copied from a standard list.
What the company keeps
The company keeps a written procedure for the daily work. These procedures are the accounting department's standard operating procedures. An employee who missed the meetings can follow that procedure. The staff still perform the work.
Each procedure names the step, the person who performs it, the record the step produces, and the point at which the next person may rely on that record. Posting, billing, payables, and banking are written this way because those are the routines we observed.
Questions
- Do the procedures describe work the staff do not perform?
- No. We take the procedures from the people who post, bill, and pay, and the procedures describe that work.
- Who keeps the procedures after the engagement?
- The company keeps them. An employee who was not in the meetings can follow them.
- How does an engagement start?
- We sit with the people who post, bill, and pay. Before anything is written, we read the trial balance, the receivables, the payables, and the bank activity.
- How long does it last?
- The engagement lasts through the writing of the procedures and the first period in which the staff follow them. The agreement states the end date.
- How does this fit the accounting system the company already has?
- The procedures describe the work inside that system. The ledger stays in place, and the staff continue to perform the work there.