Improvement – every manager wants it for their respective department units. Some are in the position to want improvement badly, while some notoriously bypass the opportunity to have it in their hands.
In an accounting department unit, improvement is, however, an imperative. No other department unit carries the burden of the costliest mistakes than the accounting unit. Why not? –It is the unit responsible for managing the financial assets and other forms of resources of the company, or even a non-profit organisation.
In practise, the accounting unit answers to a lot of regulatory bodies. The financial and accounting information it produces is always up to the acceptable standards of these bodies. And through this output, it is not difficult to assess the performance of the unit. Plus, you can add the audit systems that countercheck the output of the accounting unit.
However, this is not the only way to evaluate the performance of a company’s accounting unit. There are lots of other ways identified in strategic management accounting essays and other scholarly works. But if you are looking for something comprehensive, then you should opt for the accounting company scorecard.
Reinforcing this claim, the accounting company scorecard is largely comprised of financial and non-financial parameters.
Introducing the scorecard
Before heading out to the careful easing out of the scorecard, managers or department heads would normally pick specific people to delegate the tasks. Apart from choosing the top figures, managers should choose those people who are already buying in to the idea of using a company scorecard for their unit.
In other words, people who will be responsible in carrying out the introduction should be the ones who already have faith in the benefit that the scorecard is anticipated to bring (into the accounting unit and the company, as a whole).
Such people will find it natural to absorb the implications of these three missions:
1. Begin with a targeted assessment by identifying the following:
a. departments that interact with the accounting unit
b. the nature of internal transactions (distinguish major and minor elements)
c. the nature of external transactions (distinguish major and minor elements)
2. Create a set of parameters to be used for the scorecard selection (using the assessment’s findings)
3. Start looking for predesigned accounting company scorecards
Bear in mind that no scorecard is a 100% fit for your company’s accounting unit. The ‘borrowing’ of a predesigned scorecard serves to give its users (mainly, the accounting unit) a concrete idea as to how they can effectively use scorecards to measure their performance.
The moment the accounting unit starts to get the complete picture, they will certainly find other crucial elements that should merit its presence in the accounting company scorecard. Using the predesigned scorecard, they can begin to develop a new and better scorecard – something that will accommodate the parameters unique to the company’s accounting unit.
Moreover, this development of scorecards should not only happen once. Let it be an annual or biannual update.
If one puts it plainly, a scorecard is only a piece of sheet. As such, it is deemed to be a futile attempt to catalyse any form of improvement. Yet, if managers consider the dynamic potential of these performance inputs to cause positive change, then it is not just a scorecard; it is a viable system.
Lindsey Fisher is a practising accountant who loves to write essays on business and post it for everyone to read and reflect. Join her in his quest to scribble the latest reviews for trending accounting and managerial evaluation tools!