Accounting you can actually use

The problem it solves

Receipts arrive as text messages, some as photographs and some from memory. The same expense is classified two different ways depending on who records it that week. The chart of accounts came loaded with the software when it was installed, so it describes another company's operation, and nobody has had a free week to revisit it since.

What that arrangement produces is predictable. Statements arrive late and corrected more than once, so the owner learns to wait for the second version before looking at anything. When the person who records is away, the month stops, because the process is written down nowhere: it lives in their particular way of doing things. And nobody can say what evidence each transaction requires, so some have a document, some have an email and some have an explanation.

Everything downstream inherits the disorder: the monthly close, any ratio anyone wants to calculate, the file an institution asks for, and the questions the owner would like to put. The most expensive part, though, is what happens at every change of staff. The system is rebuilt from nothing because it was never documented, only practised, and with each rebuild the company loses the ability to compare itself with its own past.

What it covers

The workshop builds an accounting system that can be used, which is a different thing from one that is correct. It starts with the chart of accounts, and not for technical reasons: the chart decides which questions you will be able to answer a year from now. In a group exercise each company builds it from their real operation, from the lines money actually comes in through and the ones that consume cost, rather than accepting the structure that arrived by default.

The second block defines the document flow and the minimum evidence for each type of transaction, which is the boundary between a record and an assumption. It settles who records, who reviews and who approves, and assembles the monthly accounting calendar with concrete dates, because a process without dates depends on somebody remembering. That discussion usually surfaces steps nobody is currently assigned to and which run purely on habit.

The third block puts classification criteria in writing, starting with the ambiguous cases this company repeats every month. The objective is concrete and testable: two different people should record the same transaction the same way. They are drafted in the room, in the language the company actually uses rather than in technical vocabulary, because a criterion that has to be interpreted settles nothing and leaves the decision back in the memory of whoever is recording.

The closing block covers the tool, the handover and the relationship with the outside accountant. The tool is chosen after the process and against selection criteria, not on a corridor recommendation; changing software has never repaired a process that was never defined. The handover is prepared with enough documentation for someone else to operate the system tomorrow, and with the outside accountant the company agrees what it delivers, on what date, and what it expects back.

What participants learn

• Design a chart of accounts that reflects how the company genuinely earns.
• Define the document flow and the minimum evidence for each type of transaction.
• Assign an owner and a date to every step of the accounting month.
• Develop written classification criteria so two people record the same thing the same way.
• Evaluate tools after the process is defined rather than before.

Agenda

1. 01A chart of accounts built on the real operation
2. 02Document flow and minimum evidence
3. 03Who records, who reviews, who approves
4. 04The monthly accounting calendar
5. 05Classification rules in writing
6. 06Tools after process
7. 07Handing the work to someone else without losing continuity
8. 08The working relationship with your outside accountant

What the organisation leaves with

• A draft chart of accounts built on the company's real operation.
• The document flow in writing, with the minimum evidence each type of transaction requires.
• A monthly accounting calendar with an owner and a date at every step.
• Written classification criteria for the cases this company repeats, ready to hand to whoever takes the seat tomorrow.