The most boring subject at university is now something I can take pride in.
During my university studies, one of the most boring courses was Accounting Systems Design. The major problem was that discussing remittance advices, proof of delivery, goods received notes, and bank reconciliations is extremely dry when you're not looking at a specific business context. But you do what you need to, and get through it somehow.
After working in audit for several years with E&Y, though, it was more apparent what all that theory was about. And when I got back from my secondment to Canada, I had a clean calendar and was assigned to do a management consulting engagement to a business named Computerland Solutions. This was a business in the very new PC reseller space which had expanded very quickly through the use of a franchise model - growing from a one-store shop to a national network of maybe 20 stores in a period of less than a year.
But their accounting systems, including key steps such as recording inventory movements and controlling access to cheque book payments had not been altered since the business was a single shop run by a married couple. With millions of dollars going through the business each year both in cash and in value of inventory, it was not surprising that by the time the group of overseas investors asked us to come in and take a look, there were adjustments in the order of $30m required.
I found that there were virtually no controls in place across the business.
- Many of the staff had cheque books, and when they needed something, they just purchased it. No approval of the purchase or record of the purchase went back to the accounting team.
- The sales team were able to draft invoices at will - often when only a quote had been requested by the customer - and the resultant invoice of course was uncollectable as the goods had never been delivered.
- Suppliers - including the largest PC manufacturers in the industry - would drop off inventory in the warehouse, but no record of what was dropped off was every taken and passed to accounts. So when the invoice from the manufacturer arrived for hundreds of thousands of dollars, it just had to be paid in good faith that the stock had been received and trusting there were no errors or omissions.
After reporting on these matters and recommending various significant entries that were required to correct the books, I was asked to set up new accounting systems to sustain the business moving forward.
That was when I realised how much I had learned at E&Y over the prior 4 years. I was able to implement purchase to payment processes over costs, order to receipt systems over sales, sales commissions systems, AP, AR, payroll, warehouse controls to record all inbound and outbound inventory movement - the whole lot. From scratch.
The client was so impressed, they gave us the audit ongoing as they had had quite an acrimonious fallout with their existing audit firm.
And the partner on the engagement, Gary Dinnie, assigned me to numerous other of his engagements moving forward - which was my introduction to the IT industry and ultimately led to me getting the Chief Accountant role at Unisys as a first step out of the profession.
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