Overview
From my experience, accounting at multi-unit, retail, and restaurant companies (“MURR” for short) isn’t all that difficult, but it can be tedious, because there’s a lot of it. Overseeing dozens, hundreds, or even thousands of locations that basically have their own business to account for means a lot of accounts, transactions, reports, and other data. This is where being efficient isn’t just a luxury, it’s essential. At the unit level, if you don’t run efficiently enough to plan your expenses to your expected revenues (like staffing to traffic patterns), you can go out of business fast.
In this post, I’ll help you take that same approach with your corporate accounting team, sharing several best practices that have helped my teams and myself work efficiently, and free up capacity to provide valuable insights and support strategic initiatives. It starts with the efficiency mindset: think once, apply often, refine when needed. That means not constantly rethinking through how to do the same process. Minimize the manual steps and leverage technology to do the repetitive stuff. You’ll be less tired, less stressed, and make less mistakes. And you’ll probably justify a raise or promotion. Read on for more!
Tools for success
Microsoft Excel – You’re likely already using Excel, and that’s okay. It does a lot of things well, but most people use it at a very basic level. We’re here to help with tips, tricks, training, tools, and projects. Follow us on LinkedIn to stay in the loop. Contact us about setting up training for your team. Or reach out to us if you need help with a consulting project to optimize using Excel.
XLEV8 Excel Add-in – We built the robust XLEV8 Excel add-in to help you get more out of Excel – providing all kinds of shortcuts and functions to automate bulk work like setting up or formatting endless files and sheets. A lot of that came from experience at MURR companies because there is so much repetitive work! Take a look at a quick demo or the Apps page more information. Most people easily find ways to save 3 hours a week or more, and there are several purpose-built features specifically built for accountants at MURR companies. It takes minutes to set up and start using.
BlackLine – BlackLine is a full comprehensive accounting solution that complements your general ledger accounting system, orchestrating and automating task workflows, account reconciliations, journal entries, variance analysis, and more. Because of all the data MURR companies manage, it is especially useful for data-intense processes like bank, credit card, and delivery recs, journal entries, and variance analysis. It also optimizes year-end audits, supporting a self-service approach (who doesn’t love spending less time with auditors?). As robust as it is, the core Modern Accounting Playbook solution (Task Management, Account Reconciliations, and Transaction Matching) is designed to be up and running in 2-3 months.
Use a comprehensive checklist
To ensure things get don’t go past due (or worse, missed altogether) and ensure you’re properly resourced, use a comprehensive checklist. Define start dates, due dates, and prepare/review responsibilities for all tasks. Tag them with categories, locations, teams, departments, risk, etc. so you can easily sort and filter them. Review items regularly to ensure they are still relevant and that any business changes are reflected. Collaborate with any unit-level employees that have accounting or other admin-related responsibilities to help streamline and integrate their workflows as well.
Good: Use one central, shared checklist and track changes. Update constantly and review regularly.
Best: Leverage BlackLine’s Task Management to automate the workflow, add crucial controls, centralize the list, store supporting documentation, house purpose/policies/procedures, and integrate with other accounting processes (i.e. recs, JEs).
Record activity at the unit level
It may be tempting to just record most items at the consolidated level, but you’ll unlock valuable insights when you record them at the lowest level possible. If a unit benefits directly from an expenditure, it’s best if it’s reflected there, either directly, or via a logical allocation. You’ll get the most accurate picture of the unit’s profitability.
For items that need to be allocated out of convenience (i.e. corporate labor and other costs), allocating all the costs together makes sense, especially when you’re thinking tax effects. For items purchased at scale for favorable pricing, record them as logically as you can, ideally with unit-level billing details. If that’s not possible, develop an efficient allocation process with the most fair and logical allocation driver (hint: it’s not always revenue-driven).
Good: Record expenses directly to the unit level wherever possible. Allocate other items as logically as possible.
Best: Record expenses, then record allocations separately entries to aid in research later. Use the XLEV8 Allocation JE Macro to expedite allocation entries. Leverage BlackLine to fully automate allocation and other journal entries.
Reconcile at the unit level
It’s just as important to reconcile accounts at the unit level. This ensures unit-level accuracy, makes research easier, and it’s more auditable. Design your reconciliations such that you can properly show what components of the balance sheet relate to which units. Grouping them is the ultimate approach – one formal reconciliation that shows how individual units are supported. Having a consistent chart of accounts is already a good practice, but for MURR companies, it’s crucial.
Good: Use consistent reconciliation templates where it is clear how each unit’s balance sheet account balances are supported. Group accounts together where it makes sense, considering the preparer/reviewer assignments.
Best: Leverage BlackLine to automatically group accounts based on type, location, risk, etc. using standardized templates for control and efficiency.
Reconcile high-volume accounts daily
It might sound contradictory, but the more frequently you perform high-volume recs (bank accounts, credit cards receivable, delivery vendors receivable, etc.), the more efficient it is – the less time it takes overall, and the less of a bottleneck it is to your close process. It’s basically a big matching exercise. Think about laundry – if you only did it once a month, you’d spend hours just matching all the socks! It also helps you manage and dispute exceptions (especially delivery vendor receivables), which can reduce $10,000s of write-offs. Thinking through the process of how all transaction types are matched and establishing tolerable variances is very helpful here. Cash is king and keeping a close and timely eye on it can make or break a lean business.
Good: Templatize your recs and the logic/categorization used to match transactions.
Best: Leverage BlackLine to automate the entire process – getting the data, enhancing it, applying matching logic, indicating exceptions, and assigning timing difference. It can even automate JEs for items not yet recorded.
Reconcile all other accounts
For the non cash-related, lower-volume accounts, the best practice is to reconcile them monthly, but use a risk-based approach to decide. Push as much of the work as you can into the period it occurs to be proactive with errors and to get ahead of the close. For example, with a prepaid account, examine the first 3 weeks of activity, then you only have one last week once the period ends. When you take this approach, you’re always audit-ready and things are well-documented, dramatically reducing the risk of errors.
Good: Perform and review reconciliations monthly, ensuring the balances support the GL balances.
Best: Leverage BlackLine to automate as much of the process as possible, automatically rolling forward supporting items and indicating when balances are not properly supported. This focuses the team’s effort where it’s needed most.
Review P&L for all units/regions
If no one looks at a detailed P&L (profit and loss, or income statement) for each location, how do you know everything has been recorded in the right place – accurately and completely? The best processes I’ve seen are a collaboration of the unit managers and the accounting team – both separately examining P&Ls for all units and roll-up regions.
For companies with lots of units, that may sound like a lot of work, but it doesn’t have to be. One of my favorite methods is to analyze each account at a time, but with all locations in a list, comparing to budget, prior year, trends, and averages for similar units (see the screenshot below). Look for zero amounts when something is budgeted. Look for negative amounts where it’s not natural. Look for items way off from budget or prior year on a dollar and % of revenue basis. Use formulas and conditional formatting to quickly pinpoint odd items across multiple locations at the same time. You can review all the numbers without looking at every P&L, one at a time. It kind of feels like cheating, right?
Good: Look at all the accounts within the P&Ls for all units and regions for reasonableness and completeness.
Best: Leverage BlackLine for variance analysis at the account level and/or group levels to automate as much of the process as possible, automatically identifying accounts needing explanations. This focuses the team’s effort where it’s needed most and can tackle issues proactively before other downstream processes even start.
Automate journal entries
I’ve seen more errors in journal entries than any other accounting process. Accountants are great at calculating numbers, but getting the positive or negative sign right can be challenging! Templatizing the process for recurring and repetitive entries reduces a lot of risk and a lot of time. Usually 90+% of journal entries are repetitive, so it makes sense to automate as many as possible. In my experience, daily sales and payroll are the ones I see automated the most. Why not take that approach everywhere? Start with data, build in logic, and map it to the required journal entry format. The more pieces of the process you can automate, the better.
Good: Use templates to drop in source data and use pre-built formulas to efficiently and controllably build journal entries.
Best: Use the XLEV8 JE Creation Macro to expedite entries, mapping source data to the required JE output. Leverage BlackLine to fully automate all kinds of journal entries, including the workflow and posting directly to your G/L system.
Use statistical accounts
Statistical accounts are one of the most underused but impactful features in most companies’ G/L systems, especially for MURR companies. They work very well for memorializing and controlling non-financial data like traffic counts, headcount, unit counts, weather, labor hours, guest satisfaction, etc. They also work well for breaking down sales by type, daypart, revenue center, source, etc. These accounts are updated just like balance sheet and income statement accounts. Using them makes it very easy to access useful data for internal reporting and sometimes for additional details along with formal financial statements. It makes it really efficient to be able to query the data along with traditional account data. Here’s another article that covers some statistical account examples.
Good: Use some statistical accounts for a few different metrics.
Best: Use an extensive number of statistical accounts for all key metrics, and break down sales or expenses in ways that help proactively address unfavorable trends and understand what’s happening in the business.
Automate the A/P process
Having a software solution that drives the A/P process with automated workflow routing, coding, document management, and a vendor portal is extremely valuable. For MURR companies, that value is heightened because of the decentralized nature of the business. It’s a more efficient approach for people all throughout the business, especially when you can build in the delegation of authority. It cuts down on paper, which can save a tremendous amount of time and money.
I once worked at a ~40-unit restaurant company that was extremely paper-driven. Invoices, receipts, statements, mail, etc. were originally received at the restaurants, and then sent via express delivery to the corporate office, where it was filed and stored. I did some rough analysis and found that this ~$200 million annual sales company spent over $1.5 million printing, shipping, storing, and archiving paper documents that could be digitized. That’s not counting how inefficient it is to file it and sift through it later!
Good: Digitize as many documents as you possibly can all throughout the business (especially A/P).
Best: Use a full A/P workflow system to not only digitize, but manage the entire A/P process.
Streamline the reporting process
Being able to report relevant information to the right people in a timely manner is a strategic advantage. It’s also a lot more fun because you can see the impact it has on them. Imagine taking an entire month to close the books…it literally never ends! The world moves so quickly now that it’s old news by then and there are new fires to put out! After closing the books faster with the best practices above, it’s time to streamline the reporting. If you have a robust reporting solution available, use it. Build out a variety of reports you can use to shape the narrative. Leverage charts to add visuals that are easier to digest. Schedule reports if you can. Provide insights on what’s going on so you’re not left guessing what the audience is thinking.
If you don’t have a robust reporting solution, Excel can still be pretty useful. As with anything else in Excel, I try to use an input ➡️ formulas ➡️ output approach, limiting the manual steps. Macros often help to tie everything together and ensure that steps are followed specifically and consistently. One of my favorite approaches is leveraging a trial balance report, because it has everything – income statement, balance sheet, and statistical accounts. Each account is tagged with location/region, and one or more roll-ups/categories. Key tip: make sure you are aligned with everyone on how accounts are tagged or you’ll spend endless hours reconciling and researching. Two key Excel functions are used to drive all the calculations: VLOOKUP and SUMIFS. You can build just about anything with these. If you have 100+ locations, it may not be feasible to do this for every location – you may have to run the data at a regional level. If your reports spit out data to several different sheets, the INDIRECT function can be extremely helpful (related article).
Good: Build out various reports – P&L, sales/traffic trends, cost of goods trends, inventories, fixed assets, operating expenses, etc. within one or more Excel workbooks with minimal manual steps once you have the source data.
Best: Use a robust reporting solution to build reports where they can be run at scale, scheduled, and distributed automatically. Use the XLEV8 Refresh PowerPoint Slides macro to quickly refresh dozens or hundreds of slides with valuable tables, charts, and text, picking out the key ones to share in discussions with business leadership.
Summary
Because of the repetitive nature, accounting is a function ripe for streamlining and automating a large number of processes. Multiply that by the number of locations MURR companies have, and you can see why optimizing the accounting function is so appealing. Oh, and accountants don’t tend to be cheap employees. They are usually pretty smart, but that potential is often stuck on the accounting hamster wheel. Apply one of the best practices above each month and within a year, you’ll reduce errors, increase morale, and save a significant amount of time, reducing the need to hire so much as you grow.
Do you have any best practices or tips and tricks from the MURR company perspective? Share your thoughts in the comments below!
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