In today’s business environment, things are ever-changing. For the past two years, many business owners have had to navigate the remote work environment, supply chain issues, challenges with staffing, and many other variables. In order for an organization to survive and succeed, its policies and procedures need to be adequate for the company’s current size while allowing room for growth and adaptability.
An accounting diagnostic is a tool that can be used to promote growth and assist with navigating challenges presented in this current environment. It can be useful to companies of any size to help identify issues before they become larger problems.
Would My Company be a Good Fit for an Accounting Diagnostic?
How do you know if an accounting diagnostic would be right for your company? Below are a few scenarios in which it might make sense to complete an assessment.
- New or start-up company. Management wants to ensure proper policies and procedures are in place and adequate internal controls are established, implemented, and followed by employees.
- Mature company with low staff turnover. Management wants to review existing processes to assess whether there are any unknown issues or holes while simultaneously evaluating more efficient ways to maintain sound internal controls. Roles within processes may need to be re-evaluated to ensure proper segregation of duties.
- Mature company with high staff turnover. Management wants to establish proper policies and procedures surrounding internal controls so knowledge is not lost with turnover of staff.
- Established company that has not reviewed policies and procedures for several years. Management wants to review policies as a refresher to ensure internal controls are operating properly. Some policies may be stale due to changes in the work environment such as hybrid or remote work. Additionally, the company’s cloud-based functionality should be documented. Reporting lines and job duties should be assessed and updated so they align with changes that have been made. It may also be a good time to create a checklist of corporate governance policy best practices, including fraud prevention, conflicts of interest, whistleblowers, etc.
- Companies that have experienced major changes. Your company may have undergone changes due to a sale, rapid growth, increased staffing, or anticipated expansion. Any of these scenarios could make your company a good candidate for an accounting diagnostic to ensure finance scalability is up to par.
What Should an Accounting Diagnostic Entail?
An accounting diagnostic can help you gain insight into current processes and duties assigned within the financial reporting process and as well as identify potential opportunities to streamline activities and improve resource utilization.
An accounting diagnostic can include an evaluation of the following areas and can be tailored to fit any company:
- Cash receipts
- Cash disbursements
- Tax compliance
- Financial reporting and monitoring
- Board governance
Kreischer Miller can assist you by documenting observations from interviews and reviews of requested documentation, identifying opportunities to enhance processes, and making recommendations for improvements. If you have any questions or are interested in learning more about how an accounting department diagnostic can help strengthen your internal controls, please contact us.
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