2008 Review of Engagement and Trial Balance Systems

From the August 2008 Issue

Streamlining Engagement Processes The movement toward greater efficiency is gaining momentum, and it’s no wonder. Maximizing efficiency can not only decrease wasted time and thereby increase profitability for a practice, it can also help firms who have faced staffing challenges, enabling them to offer greater services to larger client bases without increasing staff.

Just as the “paperless” movement concentrated on changing old work processes that resulted in inefficient paper storage methods, the coming changes are focused on streamlining many of the other processes within professional practices. This still includes paperless document management and control, which actually was the first step in the ongoing evolution of professional technologies. The focus now is on enhancing data flow between programs and bettering collaboration in offices where multiple staff members work together on engagements.

While trial balance is in and of itself an engagement, the process is generally tied in to engagement management because it represents the culmination of the workpaper process for other engagements, and it is from the trial balance that professionals pull key information for building financial statements and preparing year-end tax compliance.

This review section looks at several programs, some that look toward the overarching issue of managing all engagements and include trial balance and financial reporting functions along with extensive collaboration tools, audit and review process management, and expert guidance. These systems provide centralized storage for all of a client’s electronic workpapers and provide integration with related programs.

A separate group of programs focuses primarily on trial balance processes, enabling professionals to quickly look at the trial balance and the journal entries or workpapers simultaneously, which makes it easy to see the effects of “what if” scenarios for optimizing general ledger account balances.

The type of system a practice needs is mostly a matter of the complexity of the firm’s clients and the number of staff working on these engagements. This is because increasing complexity requires additional scrutiny and the use of more specialized and seasoned staff. And the more professionals who are involved in an engagement increases the need for automated review and collaboration tools.

This review section focuses on the following criteria:

Ease of Use
With any program, usability is obviously subjective, but general navigational components, access to key features, reporting tools, wizards and intuitive workflow processes greatly aid in the adaptation of a new program and enable users to more rapidly reach heightened proficiency, which lets them get the real work done more efficiently.

Data Import/Export/Integration
The ability to pull client data from the financial programs is much more effective than manually entering data, both in terms of speed and accuracy. Likewise, output of data to external programs is essential, especially to tax and analysis systems.

Trial Balance Features
Key processes involved in trial balance include creating, grouping, reconciling and adjusting accounts as well as preparing financial statements and other documents necessary for compliance.

Financial Statement Preparation
The creation of financial statements that meet the standards and needs of the client, the entities they report to and the preferences of the firm is a critical, but often time-consuming process. The ability to generate these products quickly and with high quality is essential.

Engagement Process Features
Looking at the big picture of how engagement workflow processes affect each other is like watching rush hour traffic: All it takes is one or two small delays to create significant bottlenecks in productivity. Streamlining engagement processes involves managing not only the workpapers involved in an engagement, but also the collaboration required between staff and maintaining review mechanisms that let all professionals involved in a process know what steps they need to do when, and where potential issues may arise.