What Exactly is an Operations Review?

Sep 19, 2013

Does your accounting function have a weak link?

Whenever I meet new people and they discover I am a CPA, they generally ask  me about tax returns. I have to stop them dead in their tracks and tell them I like to stay as far away from tax returns as possible.

My job is consulting related. I work with businesses to determine their accounting efficiency which often times involves an operations review. These jobs are the highlight of my workday. When I reference the term “Operations Review” as part of the backbone of my job, most other CPA’s and business owners are not familiar with what I am referencing.

When was the last time you asked yourself, or an employee, “Why did you do a specific task a certain way?” Most likely the answer is, “that is how I was trained.” Better yet, how many times have you been faced with NOT KNOWING how an employee performs his or her job, or what is being done on a day-to-day basis?

Often, businesses do not review their processes regularly if they even have formal processes. In many situations, I find that the process has evolved and is “home grown” to meet the changing needs of the Company and if there happen to be processes, they are not updated to reflect changes in the economy, industry, software or company staffing.

operationalreviewThe purpose of an Operations Review depends upon the organization. The scope of the engagement is altered based on the existing sophistication and needs of the Company.

PHASE ONE is to identify the existing processes in the Accounting function. – WHO is doing WHAT? – WHAT other PROCESSES do they INTERFACE with? – Are the current processes DOCUMENTED? – Are their JOB DESCRIPTIONS?

PHASE TWO is to fill in the GAPS – Provide DOCUMENTATION where there is none – DISCUSS potential changes and expectations to those employees affected – PROVIDE references to BEST PRACTICES to align your processes for maximum efficiency

PHASE THREE is to IMPLEMENT and MONITOR – Develop a detailed implementation PLAN for those changes needing to be made – Assign ACCOUNTABILITY – Monitor on an ongoing basis

What are the benefits to your company ? • Reduces training costs • Transparency in job function and accountability • Ensures consistent results to internal and external customers • Reduces errors • Increases value of the business • Brings focus to employee and provides performance as well as measurables that managment needs • Increases efficiency of operations and streamlines procedures • Lowers turnover and related costs due to clear and defined job expectations

In my experience, 100% of the time, the engagement identifies those individuals within the accounting function who are the weak link. The one(s) who are prohibiting the performance of the overall department. That is half the battle, aligning the procedures with best practices is the other half.  Is it time to have your accounting function evaluated?

By: Jennifer Kinzel, CPA, CMA

Categories: Uncategorized