If you've ever taken a deep breath and thought, "I wish my accounting department were more effective," you're not alone. A few years ago, rating an accounting department on effectiveness simply meant looking at financial capability and data entry skills. However, the world is evolving and accounting departments need to evolve along with it.
If your accounting department lacks the skills to work as a team, you may be at a disadvantage. Stephen R. Covey's book, “The 7 Habits of Highly Effective People,” offers powerful insight into the attributes and habits of these people.
Do you think your concepts can be applied to your accounting department?
Habit 1: Be proactive
Being proactive is taking responsibility. Many people associate being proactive only with members of management or a sales department, but an accounting department is no exception. An accounting department must assume control and responsibility for numerous tasks, such as providing timely financial information, safeguarding assets, and preventing fraud. For example, any accounting department can only deliver financial results at the request of management, but a highly effective accounting department can be proactive and deliver those financial results before the due date, in addition to asking blunt questions of management, performing critical data analysis for management and provide dynamic reports.
Habit 2: Have a goal in mind
Covey illustrates that “having a goal in mind” means starting each day, task, or project with a clear vision of the desired direction and destination, and then continuing to flex your proactive muscles to make things happen. An accounting department has many tasks to complete in a given period of time, and all of these tasks must have a judicious path defined in how to accomplish them. Whether these tasks have written policies and procedures in place or just informal steps to be completed, it is critical that the desired objective has been assessed. For example, a highly effective accounting department, when performing month-end closing, must time each delivery and work to determine the steps necessary to successfully achieve the desired goal.
Habit 3: first the most important
Covey defines this as organizing and executing your priorities. As an accounting department must prioritize daily, weekly and monthly and be able to align its critical action items, this routine is filled with expected and unexpected tasks. Managing your schedule and workload to focus on these priorities is vital for the department to function effectively. For example, a member of the accounting department receives an unexpected request to run certain inventory reports for management, but is in the middle of month-end closing. Therefore, the accounting team member must communicate with all parties to be able to properly manage their workload and prioritize which action items to take first.
Habit 4: Mindset Win X Win
This can be described as agreements or solutions that are mutually beneficial and satisfying. An accounting department works with many different people, both inside and outside the organization, and these relationships are critical to maintaining effectiveness. The accounting team can collaborate with many other departments including management, sales, operations, payroll, information technology and others - sharing information and expertise can be valuable to both parties. The accounting team may also have important relationships outside the organization with customers, suppliers, bankers, lawyers or third parties, where maintaining a strong relationship creates a foundation of trust and interdependence. For example, a customer requests that the billing method be changed from regular mail once a month to electronic delivery. A highly effective accounting department will understand the importance of the customer request and work within the organization to accommodate that request, and as a result, the new process ends up benefiting both parties.
Habit 5: Seek first to understand, then to be understood
Covey emphasizes that "seek first understand, then be understood" means putting yourself in the other person's perspective, listening emphatically to both the feeling and the meaning. An accounting department must use the communication and listening component in everyday tasks as it must obtain information by communicating with various parties to perform almost all tasks such as financial reporting, customer billing, supplier payments, inventory management, budgeting and more. While information can be obtained in different ways, the accountant who listens and understands is vital in how he will use and complete the final delivery. For example, a sales manager requests a sales report from the accounting department, which shows specific customer sales data. The accountant listens carefully to the sales manager's requests, asks quality follow-up questions, and provides the manager sales reports several examples of sales reports based on the request. The end result is not just astandard sales report, but also a specific and valuable sales report that benefits the sales manager.
Habit 6: create synergy
Synergy means innovating and solving problems with those who have a different point of view. In other words, synergy can mean "two heads are better than one" and creative cooperation. An accounting department not only cooperates with its own team, but must also synergize with all departments in an organization to be successful. A successful management team in an organization often has dynamic leaders from all departments who communicate regularly to meet the many needs of the organization. For example, the accountant may be entering weekly payroll data into the general ledger, based on a manual process that the organization has been doing for many years. What if the accountant consults with the information technology (IT) department to see if there is a way to automate the payroll process? Cooperation and a different point of view can result in an automated process for entering the payroll, allowing the accountant to spend his time in more critical areas.
Habit 7: Tune the instrument
"Tuning the instrument" means seeking continuous improvement and renewal professionally and personally. The accounting department must continually find ways to improve and educate itself in all of its roles and responsibilities. As the accounting industry is always changing, it requires the accounting department to be up to date on its discipline. An accountant may train with an immediate supervisor, but may also undertake many activities on their own, such as conducting research and participating in continuing professional education training. A successful accounting department must have varying levels of accountants who are constantly learning and striving to gain more knowledge. For example, the cost accountant has his daily tasks related to inventory and costs, but occasionally needs to help the budget team. The cost accountant is eager to gain more experience in the area of budgeting and attends continuing professional education courses.
Could Covey's 7 Habits of Highly Effective People apply to your accounting department and create a highly effective team? We believe so!
Get in touch with TATICCA – ALLINIAL GLOBAL, which offers integrated auditing, accounting, tax, corporate finance, financial advisory, risk advisory, technology, business consulting and training services. For more information, visit www.taticca.com.br or e-mail taticca@taticca.com.br. Our company has professionals with extensive experience in the market and has certified methodologies for carrying out activities.