.. title: The Cost of General Accounting
.. slug: the-cost-of-general-accounting
.. date: 2016-10-10 11:55:14 UTC
.. tags: accounting, finance, automation
.. category: 
.. link: 
.. description: 
.. type: text

CFO.com_ published an article about the costs of general accounting. It is in English, so head over, have a look. The gist of the article is this: "Unlike the lower-performing companies, the leaders don’t have paper-clogged workflows and armies of people performing manual tasks."

.. _CFO.com: http://ww2.cfo.com/expense-management/2016/09/metric-month-cost-general-accounting/ 

.. TEASER_END

Two interesting metrics are given in the article related to the cost of general accounting:

1. top-performing 224 organizations out of a sample of 896 companies spend 47 cents or less per $1,000 in revenue.
2. bottom 224 performers spend $1.98 or more per $1,000 in revenue.

This differece is a staggering 400%. The performance level here is defined as how well the accounting processes are designed and implemented across these general accounting tasks:

- Maintain chart of accounts.
- Process journal entries.
- Process allocations.
- Process period-end adjustments.
- Post and reconcile intercompany transactions.
- Reconcile general ledger accounts.
- Perform consolidations and process eliminations.
- Prepare trial balance.
- Prepare and post management adjustments.

The difference, the article's author finds, is mainly due to two critical factors: "...[top-performers] keep manual processing down to a minimum" and "simplify the basic process model".   

We decided to intersperse our :doc:`running theme <blog-notes>` with this post to show that our imaginary client's accounting system may benefit from a real optmization of processes reducing the manual work.