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ffirs.qxd 02/22/07 07:33 PM Page iii Pareto’s 80/20 Rule for Corporate Accountants D P AVID ARMENTER John Wiley & Sons, Inc. ffirs.qxd 02/22/07 07:33 PM Page ii ffirs.qxd 02/22/07 07:33 PM Page i Pareto’s 80/20 Rule for Corporate Accountants ffirs.qxd 02/22/07 07:33 PM Page ii ffirs.qxd 02/22/07 07:33 PM Page iii Pareto’s 80/20 Rule for Corporate Accountants D P AVID ARMENTER John Wiley & Sons, Inc. ffirs.qxd 02/22/07 07:33 PM Page iv This book is printed on acid-free paper. Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada. Wiley Bicentennial Logo: Richard J. 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For general information on our other products and services, or technical support, please contact our Customer Care Department within the United States at 800-762-2974, outside the United States at 317-572-3993, or fax 317-572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Cataloging-in-Publication Data: Parmenter, David. Pareto’s 80/20 rule for corporate accountants / David Parmenter. p. cm. Includes index. ISBN: 978-0-470-12543-4 (cloth) 1. Corporations—Accounting. I. Title. II. Title: Pareto’s eighty/twenty rule for corporate accountants. HF5686.C7P27 2007 657—dc22 2006038752 Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 ftoc.qxd 02/22/07 07:33 PM Page v CONTENTS Acknowledgments ix Introduction xi PART ONE AREAS TO FOCUS ON IN THE NEXT SIX MONTHS 1 Chapter 1 Accounts Payable in the 21st Century 3 Chapter 2 Timely Month-End Reporting—By Working Day 3 or Less 15 Chapter 3 Make the Monthly Reports Worth Reading 27 Chapter 4 Limit Time Invested in Board Reporting 45 Chapter 5 Timely Annual Planning Process: Ten Working Days or Less! 57 Chapter 6 Managing the Most Important Resource: The Accounting Team 67 Chapter 7 Quick Annual Reporting: Within 15 Working Days Post Year-End 75 Chapter 8 Managing Debtors 89 Chapter 9 Marketing the Accounting Function 93 Chapter 10 Client Management: Improving Relationships with Budget Holders 99 v ftoc.qxd 02/22/07 07:33 PM Page vi Contents Chapter 11 Working Smarter Not Harder 103 Chapter 12 Maximize the Use of the General Ledger 111 PART TWO AREAS TO FOCUS ON ONCE CORE GAINS HAVE BEEN ACHIEVED 115 Chapter 13 Throw Out Annual Planning and the Associated Monthly Budget Cycle 117 Chapter 14 Quarterly Rolling Planning: An Evolvement from Quarterly Rolling Forecasting 123 Chapter 15 Cost Apportionment: Do Not Do It Monthly! 147 Chapter 16 Ban Excel from Core Monthly Routines 149 Chapter 17 More Emphasis on Daily and Weekly Reporting 151 Chapter 18 Report Your Winning Key Performance Indicators 157 Chapter 19 Where to Invest in Your Accounting Systems for Maximum Benefit 173 Chapter 20 Implementing a New Accounting System 179 Chapter 21 Better Use of the Intranet 183 Chapter 22 Board Meetings Held Less Frequently Than Once a Month 187 Chapter 23 Become a “Warrior Against Waste” 189 Appendix A Part One Checklist on Those Areas Where the Finance Team Can Score the Easy Goals 193 vi ftoc.qxd 02/22/07 07:33 PM Page vii Contents Appendix B Implementation Steps to Reduce Month-End Reporting Time Frames Checklist 202 Appendix C Streamlining an Annual Planning Process Checklist 205 Appendix D Speeding Up the Annual Audit Process Checklist 209 Appendix E Part Two Checklist on More Wide-Ranging Changes Which Will Require a Significant Investment from the Finance Team 214 Appendix F How a Quarterly Rolling Forecast Can Be Laid Out in a Planning Tool 220 Appendix G Implementing a Quarterly Rolling Forecast Checklist 225 Appendix H Performing a Quarterly Rolling Forecast Checklist 230 Appendix I Useful Letters and Memos 234 Appendix J Satisfaction Survey for an Accounting Team 239 Index 245 vii