Reading the recent articles on management report packs, David Carter objects that most of this stuff is ancient history. Too many accountants think their role is to sit on the touchline as a spectator and add up the score after the game is over. Not good enough: it's time for them to take part in the game itself.
Recently we've had a series of articles discussing what top managers would like to see in their monthly management report packs. And a very worthy discussion it is too. Don't get me wrong: obviously it's important that the top brass have the information for their monthly board meeting. But board meetings are simply an exercise in back seat driving. By the time they get to the boardroom the events under discussion may have happened over a month ago. Meanwhile, the people out in the field are grappling with today's problems.
Forgetting for a moment your services to top management, what help do you as an accountant give to your customer-facing staff, to the people who actually do the work? Are you the typical accountant who sits out the game on the touchline? Then, after the game is over, you add up the score and say who won? Or do you make a point of getting out there onto the pitch where the action is, getting your hands dirty, part of the team?
How to help customer-facing staff How can you help the customer-facing staff? Let's take an example: suppose your company has a sales manager with a monthly sales target to meet.
In your score-keeping role you might wait till the month is over, then produce a P&L that tells how she failed to make her budgeted sales this month.
But in your team-player role you might write a Daily Sales Report which shows her the value of sales invoiced so far this month. And if, seven days before month-end, it's clear she's going to miss her target, you give her an Outstanding Orders report in due date order. She has a quick look, sees there are a couple of orders due for delivery early next month, gets the customers' agreement to bring delivery forward, and successfully makes her target.
Simple reports like these are terrifically helpful to operational staff. They don't have the skills to write them themselves and, anyway, they are usually too busy rushing around responding to customers. Accountants are just the right people to write reports ' they are used to analysing data, and usually they understand the business better than IT people. In particular, as I have pointed out elsewhere, where reports need to identify gross margins as well as sales, accountants are the only people who are capable of writing them
How relevant are you, exactly? In my experience, however, many accountants refuse to get involved in the operational side and are largely irrelevant. Their minds locked into the routine of the monthly reporting cycle, they potter around their office looking after the payroll or talking to the bank. But no-one would ever dream of asking for their opinion on how to run the company.
The degree of irrelevance depends on the nature of the business, specifically, how fast-moving it is. In project-type businesses with few orders and lengthy delivery cycles, reports are primarily concerned with costs, which feed through from the accounting ledgers. Here the information provided by the accountant is crucial and highly valued.
Front-office systems hold the key data But it is in a fast-moving business that the accountant faces a real danger of becoming irrelevant. The key information that managers need to run the business ' orders, products, margins ' is held in the order processing front office system run by the sales department. P&L-type reports based on the accounting ledgers are simply too high-level to be of any practical use.
If you are an accountant in a fast-moving business, you need to be able to produce reports not only from your accounting ledgers but from your front office package as well. I'll be publishing some articles soon on how to do this.