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Financial Management & Accounting Processes: To Document or Not To Document

15 Jun

Financial Management & Accounting Processes: To Document or Not To Document
By: Martin Mayerchak ( Martin Mayerchak's Blog )
Tags: Documenting

As a small business owner and CFO, a typical day for me often entails little more than a series of triage operations. In facing such a challenging routine, non-essential tasks are of course the first to slip, usually landing on the "nice-to-have at a later date" list. Not surprisingly on my version of this list, one will find several items, double and triple starred, which read "document process X" or "review and update documentation of process Y." Sadly, these important tasks can languish on my rainy day list for weeks, months and, yes, sometimes even longer. Surely you can see where I am going with this.

One has to do only a very remedial Google search to discern that among the greatest rules of the financial management profession is to document, document, document, no matter how great or small, how complex or simple, the given process. Nowhere will you ever find advice suggesting the opposite, unless of course you were seeking guidance from a former Enron executive, nor will common sense permit you to determine less is preferable to more documentation in virtually any sector. The trouble is that documenting your financial and accounting processes, particularly when you work for a smaller concern, can be a huge undertaking that you just don't have time for. Accordingly, here are a few simple tips that I have used to try to make my small firm a little more secure and a little more mature without having to sacrifice days on end.

First, as with all of your other daily tasks, prioritize. You need to focus initially on the processes critical to the organization's ability to continue operations, so those either required by law, or those needed to carry on even should you or one of the other key process owners perish in quicksand on the way to work. Second, don't worry about form or formatting yet. Simply document the given process in the manner and style that makes the most sense to you and the other key owners, which may be a map, a narrative, a numbered or bulleted list, or even just a simple flow chart with smiley-face stickers. The "professionalization" of the process document can come later as long as the product you have will insure continuity in the case of disaster. Third, when sitting down to document your key processes, don't spend extra time worrying about the future state or the ideal state yet. Rather, document the process as you and your cohorts know it to be currently. You can, and indeed should, always return later to seek those improvements, once the process itself, even in its less than ideal form, is safe and secure. Finally, do involve any and all other key process owners as you will find even in a small shop perspectives can differ on just how things get done when they haven't been formally talked or written out before.

In conclusion, given that with global warming quicksand and related hazards such as tar pits and sinkholes are on the comeback, even small business finance professionals owe it to themselves and their ventures to keep critical processes safe and secure. And though the task can be daunting, following the simple approaches laid out above will hopefully make this critical activity for any business a little less tedious and time-consuming. Ultimately, making time even in this somewhat rugged fashion will afford the organization greater efficiency, security and peace of mind.

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