Already Have an Accountant? When Accounting Review & Supervision Adds Value

I don’t think having an accountant and having an accounting review are competing ideas.

In fact, some businesses do not need another person doing the accounting at all.

They already have somebody entering invoices, recording payments, maintaining ledgers and handling the day-to-day work.

The question is whether the accounting function around that work is strong enough.

Day-to-day accounting and review solve different problems

An accountant working inside a business is usually close to the transactions.

That is useful. They understand customers, suppliers, recurring entries, documents and the practical way things move through the business.

But the same person may also be dealing with:

• daily entries;
• bank transactions;
• invoices;
• payment follow-ups;
• GST information;
• management requests;
• old pending matters; and
• several other operational tasks.

It is therefore possible for accounting to be actively maintained while some of the review work receives less attention.

That is where a separate review and supervision layer can become useful.

When should a business consider it?

There are a few situations I would pay attention to.

The accountant is working, but month-end keeps moving

If every month ends with “a few things are still pending”, the issue may not be effort.

It may be the absence of a defined closing and review process.

Reconciliations happen only when somebody asks for them

Bank, GST or other important reconciliations should not exist merely as year-end exercises.

If differences are allowed to accumulate, identifying the original reason becomes harder with time.

Management receives numbers but still has questions about whether they are final

A report is only useful if the people using it understand what it represents.

If management is regularly unsure whether balances are reconciled, whether certain entries are still provisional or whether material issues remain unresolved, additional review may help.

Too much depends on one person

A capable accountant can still become a single point of dependency.

What happens if that person is unavailable?

Can somebody else understand the pending items, reconciliations, closing status and recurring process?

A stronger accounting function should retain enough structure and documentation that the process does not exist entirely inside one person’s head.

What should Accounting Review & Supervision actually do?

The purpose should not be to duplicate every accounting entry.

It should strengthen the process around the accounting.

Depending on the scope, that may include:

• reviewing accounting work;
• tracking reconciliations;
• identifying exceptions and unresolved items;
• strengthening month-end closing discipline;
• improving visibility of important balances;
• reviewing recurring accounting processes; and
• giving management a clearer view of what is complete and what still requires attention.

The exact scope will vary from one business to another.

What it should not become

Review should not create unnecessary bureaucracy.

It should also not automatically be treated as a reason to replace an existing accountant who is doing useful work.

If the problem is that nobody is doing the accounting properly in the first place, Accounting & Bookkeeping may be the more appropriate requirement.

But where the day-to-day work is already happening, the better answer can be:

Keep the accounting team. Strengthen the accounting function.

That is a very different requirement from outsourcing the books.

If this sounds closer to the situation in your business, you can read more about Accounting Review & Supervision or start with the Business Accounting Health Check.