An auditor's Valentine's Day planning checklist

Just like tax deadlines and statutory financial reporting periods, Valentine’s Day comes around every year. In the spirit of professional co-operation and mutual aid, an auditor who wishes to remain anonymous has shared a planning document that reveals a truly methodological approach to the annual Valentine slush-fest. Who said accountants aren't romantic. The planner is reproduced below, but has our mystery contact covered every base, or do you have evidence to support or contradict their processes and recommendations? Feel free to add your Valentine’s Day ideas, case studies and action points using the Comment link below:

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Valentine’s Day Planning Checklist

Success in any endeavour – whether financial, professional or romantic – depends on good planning. The Valentine’s Day process should be broken into phases, each of which should be resourced adequately to ensure effective execution in a timely manner. For clarity, the objects of our attention will be referred to as “clients”:

Identify target client(s) – V-Day minus 14
1. This may be a given with well established clients, but requires careful management and “Chinese Walls” precautions in multi-client engagements.
2. Complete all the usual Know Your Client paperwork and ID/residence checks for new prospects. First-hand confirmation rather than photocopied documentary evidence is advised.

Analytic review – V-Day minus 10
To assess the time and cost implications of your Valentine-related activities, it may help to classify your relationship according to its profile within the following characteristics:

  • Long term/short term Sustainability and going concern tests apply here; gestures and gifts need to match your commitment to the client and the rewards that are likely to accrue.
  • Matrimonial/casual Failure to differentiate the client’s objectives on this score could result in short-term frustration with the latter category; an inappropriate approach in the case of the former carries the risk of costly litigation.
  • Emotional/physical “Tone” is an important consideration here. Failure to strike the right balance on this scale could jeopardise your relationship with the client.
  • High maintenance/low maintenance The key component in your cost calculations. The liabilities associated with high maintenance relationships need to be offset against the expected returns over the full client relationship lifecycle.
  • Pro-active/reactive Are you seeking to effect or enhance your relationship with the prospect or client? Or is the engagement more of a defensive manoeuvre to minimise disciplinary action or unwanted attention? In each of these cases, appropriate levels of confidentiality and anonymity will need to be applied.
  • Male/Female Equal Opportunities regulations may restrict your course of action on this front, but for operational purposes, it may help to consider “hard” assets such as technology, bottled products and sporting goods for the former and “soft” offerings (floral tributes, stuffed toys, or travel and entertainment-based incentives) for the latter.

Risk Assessment – V-Day minus 8
The likelihood and severity of failure of the Valentine’s Day plan should be apparent from the issues identified during your analytic review. Grade the risks associated with each factor and build project milestones and internal controls into your action plan to pick up any risk factors that manifest themselves and put in place actions you can take to mitigate them should they occur.

It can help to “grade” your clients and prospects according to their characteristics and risk profiles, and to scale your Valentine’s offerings accordingly. The effort and time expended will vary for each:

A Grade Low risk/high reward with low maintenance requirements (Preparation time: 5 days)
The ideal client for accountants seeking a satisfying, high margin relationship. Floral tributes, dinner & a movie or spontaneous gifts/surprises from your tailored client schedule are appropriate here.

B Grade High risk/high reward with high maintenance requirements (Preparation time: 4 days)
Highly speculative relationships such as this call for a decisive approach. A transfer of high-value asset categories (jewellery, vehicles, property) could generate impressive returns, but retain receipts and ownership documentation should your plans go awry, particularly if alcohol features in your final.

C Grade Low risk/low reward with low maintenance requirements (Preparation time: 3 days)
As with all client grades, procurement (V-Day minus 3) and postal dispatch (V-Day minus 1) of a Valentine’s card is advised. Flowers, chocolates and gifts related to client hobbies and interests are suitable; assess current market rates for appropriate investment levels (eg M&S £20 Valentine's dinner deal). Enhanced gift

and/or delivery options may be needed if you judge the risk or reward levels to be volatile during the final stages of your V-Day preparations.

D Grade High risk/low reward with high maintenance requirements (Preparation time: 2 days*)
Consider recycling unwanted Christmas gifts. (*A high risk/high maintenance client at the extreme end of the reactive profile may necessitate changes of mobile phone number, address or identity, requiring extra time and resources on your part).

Completion procedures
Carry out a comparison of budgeted to actual results and review unanticipated errors in you plan. As part of your final assessment, consider whether to seek re-appointment next year, and amend your working papers accordingly.

NB All of the action points and analytical processes in this Valentine’s Day planner are predicated on a suitable Letter of Engagement being in place.

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