The Top Ten Things that Will Get Controllers Fired!

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10.  Controller does not pursue self-improvement by attending classes, reading periodicals in their field.

9.    Doesn’t care anything about learning the Industry they are working in.

8.    Lacks the vision to implement improvements in accounting systems, processes and procedures.

7.    Fails to develop or mentor staff and often feels threatened by subordinates.

6.    Arrogant

5.    Fails to grasp the importance of Fast Closes and producing Financial Statements on a timely basis as defined by management.

4.   Always puts personal needs ahead of company’s needs.

3.   Does not ask questions or seek support from their system’s software vendor and outside accounting firm.

2.   Is seen as ‘in over their head’.

And NUMBER ONE REASON CONTROLLERS GET FIRED:  The CEO, CFO or Ownership of the company does not trust and/or respect them. (The reason is immaterial).

 

ARE YOU A SCALABLE CONTROLLER and what exactly does that mean?

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A few years ago I began seeing the word ‘scalable’.  It  generally referred to whether typeface could be enlarged.  But today ‘scalable’ means a great deal more than just that.

From Wikipedia:

Scalability is the capability of a system, network, or process to handle a growing amount of work, or its potential to be enlarged in order to accommodate that growth.[1] For example, it can refer to the capability of a system to increase its total output under an increased load when resources (typically hardware) are added. An analogous meaning is implied when the word is used in an economic context, where scalability of a company implies that the underlying business model offers the potential for economic growth within the company.

We talk about businesses and how they handle growth.  Some businesses prosper in a growth mode and others self-destruct under the weight of too much business.  For example,  you opened a store on ETSY.  You sell just one thing, crocheted dolls.  It takes you one day to make each doll.  Your opening inventory is 25.  Day One you receive orders for a 1000.  You don’t have enough money to buy the yarn for 975 dolls or the time to make them and customers won’t be charged until you ship.  This is the most basic definition of ‘scalable’ (or not) in a business sense.

Recently on a Linked In Group (FSN) that I love participating in, someone wrote in about how to develop a program of study for a new role he was assuming at his company (a very large and well known one).  He is obviously intelligent and recognizes the need for learning all there is to his new role.  He is on the right track.

If you are a CPA you’re required to earn 40 CPE hours a year (at least in my state).  If you attend classes (in person or online) are you just going through the motions or are you selecting classes that will enhance your knowledge?

The entire point of this dissertation is to get you to look at yourself and ask ‘Am I still relevant’?  Warren Buffet is in his eighties but no one thinks of him as less than relevant.  This is not about your age, but your abilities.  Who wouldn’t want a seasoned professional on their team if they bring a lot of experience and forward thinking to the table.

Below are ten questions you need to ask yourself to determine your scalability.  We all should know what a passing grade is.

  1. How many newsletters, journals, magazines related to Controllership, Management Accounting, Finance and other related subject do you subscribe to?
  2. Do you attend CPE classes or other classes even if you don’t have to?
  3. Are you working on a designation such as CPA (Certified Public Accountant)  or CMA (Certified Management Accountant)?
  4. Do you have a Linked In account and, if so, do you belong to groups of accounting and finance professionals?
  5. If they are close enough, do you belong to any accounting Chapters?
  6. Do you spend time improving your Excel skills?
  7. How many accounting related books have you purchased in the last year? Whether you or your company paid for it.
  8. Are you a member of AICPA or IMA ?
  9. Do you welcome new challenges in your position as Controller?
  10. Are you passionate about accounting?

Let’s create another scenario.  Lately at the office there have been a lot of closed doors and whispering coming from the CEO and CFO’s offices.  They seem to be gone more than ever or always tied up on conference calls.  Something is going on but they may choose not to bring you into the loop until further down the road.  Fast forward…..It’s Monday morning and you’re getting that first cup of coffee.  The CFO passes you in the hall and says ‘I need to talk to you, bring your coffee’.  What he tells you is that the company has made a commitment to acquire 25 locations, thus doubling the company’s size overnight.  Are you scared? Excited? Angry?  How you react is going to determine your future.  If the CFO views you as weak or not up for the challenge, he and the CEO are probably already putting out feelers to replace you.  If that’s the case, it is almost too late.  Do not kid yourself.  You better start thinking about how you are viewed in the C-Suite.

Make no mistake…………..this is a serious issue.  It is the difference between surviving or failing at a company with a bright future.  As a consultant who has seen the demise of more than one controller, I can tell you that there is definitely a common thread between them.  Next week, I’ll write about those in my  ‘THE TOP TEN MISTAKES THAT WILL GET A CONTROLLER FIRED!”.  Stay Tuned!

 

 

 

WHY SALES EXCEPTION REPORTING can pay for itself! – (Part II)

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If you did not read the blog post last week regarding the Sales Exception Reporting mechanism, please go back and read it now.

We ended our discussion last week by stating that for the Sales Exception Report to work you have to set certain criteria.  In most large companies with a big product ‘catalog’ they have some kind of grouping.  Let’s take a cosmetics company.  They will group their product as follows:

  • Face
  • Lips
  • Eyes
  • Hair

You might call these ‘departments’ just as you would in a Department Store.  So let’s set up our report as follows:

  • For ‘Face’ Department show all sales with Gross Margins less than zero or greater than 50%.
  • For ‘Lips’ Department show all sales with Gross Margins less than 5% or greater than 30%
  • For ‘Eyes’ Department show all sales with Gross Margins less than 2% or greater than 60%.
  • For ‘Hair’ Department show all sales with Gross Margins less than 0% or greater than 25%

Now we have the parameters for our new report.  For some, you may need to ask your software vendor to design and deliver the report.  You may be able to build an Excel spreadsheet that can handle it but a hard coded report is preferable as long as it is not cost prohibitive.

Accurate cost of goods sold per unit of measure of product is critical.  If you don’t have an accurate and reliable (not perfect) costing system, the report will not be effective.

In reviewing your report, you are looking for two things:

  • Is the cost right
  • Is the Selling Price Correct

Compared to fifty years ago when prices did not change from day to day at the grocery store or the gas station, prices were much more stable.  But now, even with the technology that allows price scanning (UPC Coding) we believe we are keeping up.  But a price scan depends on what a human being entered into the system somewhere along the line.

Who among us has not been to the grocery store or a big box hardware center and seen the price ring up incorrectly.  The item has been put on sale based on the signage where you picked it up but the sale price has not been entered.  Conversely,  prices increasing the Selling Price may not have been updated.  Someone needs to monitor how items are being priced and more significantly, losses that may be generated through bad costing or errors in unit sales price.

Sales Exception Reporting is the essence of ‘Management by Exception’.  Not looking at everything but just those things you defined as outside the expected result.

If you have any questions on this topic, please feel free to contact me.

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