Case Study Number Two

D & K Accounting Services have been asked to visit a potential client as his in house accountant has retired and his bookkeeper is about to retire

This is what we found:

The Business had a bookkeeper who had a good knowledge of computers and had attended a Sage training course, she had been with the company for many years, had implemented many systems there and worked there four days a week.

  • The bookkeeper had numerous controls in place to follow the manufacturing process from order to despatch.
  • The bookkeeper did not keep up to date with paperwork and had two desks piled high with stacks of papers.
  • The bookkeeper had numerous filing systems in both filing cabinets and lever arch files in various offices dependant on where a particular order was within the manufacturing process.
  • The bookkeeper was chasing paperwork from various departments, often physically going round different buildings to chase.
  • The bookkeeper did not balance and reconcile regularly and did not produce reports or write cheques on a regular basis.
  • The bookkeeper did not understand the nominal chart of accounts fully and "left out" things she was unsure of until someone could tell her.
  • The bookkeeper would not do anything she did not get checked by the accountant and would not implement any changes.
  • The bookkeeper worked manually to agree figures before entering them onto the computerised system and kept full manual records, even down to which customer had had what value of stamp used on an envelope. Everything was worked out manually beforehand.

The Result:

The client was aware that his accounts needed to be quite detailed and that there was a lot of paperwork involved. He was aware that the bookkeeper wasn't fully trusting of the computerised package. D & K Accounting Services went onsite to the client's premises and immediately put into place a simple filing system using one set of files for sales and one set of files for purchases and archived the various other filing systems. We then went through the stacks of paperwork on the desks and entered and filed them accordingly. We put in place a "goods in" and "goods out" tray system and made the warehouse and despatch managers aware of it and most importantly we brought the accounts up to date. With the accounts being up to date the owner knew his exact position, he was able to assess his profit and loss accounts at any time, he knew his bank position and what cheques were uncleared, he now had a monthly cheque run and his customers began to receive monthly statements. The banks were reconciled up to date using online banking records and the despatch department knew which orders on the system were outstanding. Everyone onsite knew where to find appropriate records and exactly where and how they would be filed.

Following implementation of the above systems, the business now saves considerable monies in not having to pay the salaries of both the in house accountant and bookkeeper and D & K Accounting Services visit his premises weekly for approximately five hours to keep it up to date. This client's year end was run and handed to his accountant 10 days after the closure of the year, a feat never dreamed of by the client.

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