Supervising the accounting office was my least favorite tasks as a CFO/controller. I’d rather create a new spreadsheet or write a report on our DMS system. I used the phrase “herding cats” to describe the difficulty involved in coordinating the efforts of so many office staff members with different personalities and skills levels. As my career progressed and I ended up supervising more and more offices and staff members – it became apparent that I would need to find a solution using technology to make this task easier. My goal was to produce a financial statement on the 3rd working day after deal cutoff (creating the 3-day close method) and I found this much harder with a larger office. Normally you would think that a bigger office staff (larger dealerships) would mean a faster close – but the need to coordinate their efforts became greater as the sales volume and staff size increased.
When I supervised a small office, I could just look out at the billers desks and see how high the stack of deals was and go grab a few and post them. A larger office meant that I was having to roam around area where all the billers worked and count how many deals for each and try to balance to stacks to make it even and reach our deadline. There were way too many for even a Super Controller to post to get caught up. It was at this point that I came up with an idea – why can’t we flag deals for billers like we flag time for technicians? Imagine if your billers were fighting for the next deal to post – even going into the F&I and sales office asking for more deals? A backlog of deals is the number one reason why it might be the 4th of the month and you don’t have a financial statement. Although getting the deals into the office earlier in the month is your best solution, I don’t think we’ll be able to influence the sales and F&I department enough to get them to turn in the deals faster.
In fact, weekly sales commission cutoffs haven’t improved the flow because it is the managers who control the flow of deals and they are paid monthly. Instead, weekly sales commissions have only made the close more difficult because the office is trying to pay a weekly commission payroll and close the month at the same time. In addition, it generates more payroll checks which causes higher bank fees and chargebacks. How can you start flagging the office for the deals they post?
First you have to change from being an old-fashioned desk based accounting office to a task-based accounting office. You need to separate both your tasks and staff into 3 categories; CAT – confidential, accurate and timely, B-Better and A-Anyone. I’d love to have an office full of Cats – but normally only your office manager and the payroll clerk fall into that category. We’ll spend half at day at my Profit Academy in Las Vegas November 19-21st working on understanding how to separate tasks and your office staff into these categories. How long does it take to switch from a desk based office to a task-based office? For some it can be a matter of weeks, but for others with a seasoned staff – the change is difficult.
The best place to start is when you are hiring your next office replacement. Instead of hiring to replace a desk – move some of the lower level items from other desks and hire a new A person. Move the important tasks to your B level staff that wants to grow into a “CAT.” There are many things that you can do to motivate your office; bonuses based on deals worked, a bonus for having a certain amount of B or higher tasks assigned – or my favorite which is 4 hours free time off if the close is completed in 3 days. Please email me if you’d like the 3 day close plan or a list of the accounting office tasks.
