Situation: A small company has a long term clerk employee. This individual is responsible for AR/AP, Payroll and also HR manuals and reports to the CEO. This individual has been a good employee, but doesn’t perform well in this role. How would you structure accounting and bookkeeping in a small company?
Advice from the CEOs:
- This is a key role, but there are a number of options. One is for the individual to continue reporting to the CEO, but train someone else to back them up. This will enable you to either shift the individual to another, more appropriate role within the company, or to continue with minimal disruption if the individual leaves.
- Because of history and loyalty, this is a difficult emotional issue for you as CEO. It is important to consider what you would do if you could remove your emotions from the issue. If the answer is that you would eliminate the clerk position and hire a qualified, experienced bookkeeper at the appropriate salary, then this is your answer.
- Packard’s Law – from one of HP’s founders – is that no company can grow beyond the capabilities of their employees. Hire the right person. This individual must be process-oriented – someone who routinely checks their own work to make sure that it is right. There is an adage in accounting that good accounting is 20% knowledge and 80% double checking the work. Hire a person who loves to do this.
- Take care of this position in the best interests of the company, and look for another, more appropriate within the company job for the clerk.