HR as a Business Partner
As per the Management guru – David Ulrich, the term “HR Business Partner” means that Human Resources (HR) needs to be responsible for the strategic roles and goals of the organization and it needs to implement the necessary plans to ensure that the goals of the business are achieved. In other words HR needs to take a more active part in the organization’s growth. The term business partner covers the entire range of HR responsibilities like administrative, strategic and consulting.
In the current company the HR function has not been integrated with the core business functions and the company was of global nature with the employees and the contract workers spread across the globe. Because of the spread of operations and diversity of the workforce the HR division is struggling to meet the business requirements. The isolated business divisions need to be brought together and closely coupled to have a single unified HR business processes framework.
With the changes in the global economic environment and the increased competition in the market, the company needs to transform the working of the HR division. The HR needs to take better control of not only its own processes but engage better in the organization’s overall processes and goals. The HR needs to align itself to the possible changes and keep learning newer skills and capabilities to address the business needs better. It needs to work as a cross-organizational team so that it takes on the strategic business partner role as against the current passive role it holds.
Issues with the current HR Model
- Not much emphasis on the cost effectiveness and the operational efficiency
- HR has become a high cost, high manpower division, focusing more on the administrative functioning than on the strategic initiatives.
- There is a huge dependency on the HR for operational issues, hence a solution on the lines of Manger Self Service and Employee Self Service portals would help in taking care of most of the enquiries, issues and automate the processes.
- The HR function needs to become a supportive, active entity with more of a business partner role
Types of Account Reconciliation
One can categorize account reconciliation into primarily four kinds.
- Account reconciliation within the account: For example in the case of Prepaid Expenses account. Here the account acts as a holder on the Balance Sheet for the items which have been prepaid and is transferred once the payment is completed. Here the sources of entries are two – one, when the expense is raised in the appropriate period and the second, when the expense is actually paid. If it is paid within the appropriate period it is a wash in the Prepaid Expense Account, else it is carried into the Balance Sheet accordingly. This method requires amortization of amounts which are posted into the account leaving the balance as yet unallocated. This method can be used in the following cases
- Monthly recurring expenses
- Annual payments
- Advance payments
- Account reconciliation with an external account: This can be further divided into two sub types.
- Bank Accounts: The Company’s accounts should be adjusted to reflect the external items in the Bank Accounts. The entries are made in the company’s books in the form of deposits and payments but there can be items present in the bank statement which are not yet processed in the general ledger. The reconciliation will show two types of differences:
- Outstanding items viz., deposits and payments present in the general ledger buy not yet reflected in the bank statement. These will be automatically adjusted when the check is presented.
- Items processed by the bank buy not yet processed through the general ledger. This needs to be entered into the ledger else it will cause permanent difference between both the accounts.
- Other external accounts: Theses are usually cases where the one of the following are involved
- Medical scheme providers
- Insurance carrier accounts
- Accounts payable & receivable
- 401K accounts.
- Bank Accounts: The Company’s accounts should be adjusted to reflect the external items in the Bank Accounts. The entries are made in the company’s books in the form of deposits and payments but there can be items present in the bank statement which are not yet processed in the general ledger. The reconciliation will show two types of differences:
- With another account: One good example for this is in case of inter-company accounts. The inter-company accounts need constant reconciliation so as to ensure that they are in sync. There might be outstandings on both sides which will result in permanent differences if the opposite side is not adjusted. Reconciliations require a list of initiated transactions which should be traced to the opposite side. Having two different accounts, one for transactions that the company initiates and the other for the transactions that the company responds to will simplify the reconciliation process.
- Control account: The General Ledger control account balance is reconciled with the total of the individual accounts in the sub-ledger.
Best Practices of Account Reconciliation
Fine tuned account reconciliation activities help in increasing the ability of the manager to identify and resolve issues proactively leading to accurate postings and ledgers. The issues that usually lead to account reconciliation are mostly preventable. By laying down an appropriate reconciliation and communication framework and providing adequate employee empowerment one gain better control over their books.
- Prepare reconciliations on a timely basis. Account reconciliations which are due for over a month can risk misstatement of the financial results. Consider preparing certain key reconciliations prior to the month-end cutoff date – fix errors instead of document errors. The account reconciliations time frame needs to be staggered to address fraud, turnover, transaction volume, etc. thus reducing risk. On the basis of risk potential, the reconciliations need to be done either on daily or weekly or monthly or quarterly.
- There should be a consistent methodology and terminology to be followed, in other words the process should be well defined. This is because in some cases the account owner might consider transactions to be reconciled if the differences are quantified, while in other instances account reconciliations primarily involve rolling forward of activity posted to the account without validating. Hence a standard definition should be established for reconciliation across the company.
- Account reconciliations should not be restricted to roll forward of activity or identification and isolation of differences. The account should be reconciled only after the differences are investigated, the right accounting treatment identified, and applicable correcting journal entries posted to the general ledger.
- The account reconciliation should start by comparing the ending balance in the general ledger with the ending balance in the sub ledger or any connected documents, and it would be considered completed only with a matching adjusted balance in each of the ledgers.
- Usually the accounts in the company’s books increase over a period due to new processes, new entities acquired or created, new transactions etc. This results in creation of large number of accounts which might become difficult to perform account reconciliation for. The company should perform account rationalization annually to merge accounts which are not required thus reducing accounts to be reconciled.
- Dispose of reconciling items on a timely basis so they do not accumulate into an intolerable error
- A separate reconciliation needs to be performed for each balance sheet account. Accounts like retained earnings which are flow through from other activities need to have a separate reconciliation only in cases where there are differences between the ledger and sub ledger.
- The practice of linking multiple bank accounts or multiple inter-company transactions to a single general account should not be followed. Separate accounts for separate transaction flows need to be maintained.
- The management needs to be kept in loop on the status of the account reconciliation process with regular status meetings and reports. The status should include details on the number of accounts not reconciled, the age of the unreconciled items and dollar amount of the differences. The effectiveness of the reconciliation needs to be measured on a time to time basis.
- Companies should adopt continuous improvement processes for reconciling all accounts before the post closing adjustment review process.
- Because the external auditor is no longer an internal control, the complete account reconciliations should be ideally done before SEC filings to avoid a possible material weakness.
- The documentation should be detailed, with complete account descriptions, controls, policies and applicable rules. The document repository should contain the complete account and reconciliation history with all the connected attachments too. The approval and the change management workflow should be clear and documented.
- Past dues need to be highlighted with adequate prompts to the managers about the issues. There should be complete audit trail capturing all the comments and the notes. The high risk accounts have to be continuously monitored to ensure no occurrence of errors or frauds.
- The workflow for issue escalation and resolution needs to be documented clearly and followed. There should be adequate item aging and carry forward functions to lock down completed reconciliation reports
An Introduction to Time and Motion Studies
Time and motion studies are a core set of tools which are used by the managers in the industrial sector to enhance the performance or the operational efficiency. This is done by breaking down the work into simpler units and setting the execution benchmarks. This can be used in conjunction with the wage –incentive model which helps in increasing employee motivation. The time and motion studies were initially used to improve productivity in manufacturing units but later saw tremendous use even in the service industries.
Time and motion studies can be used to determine the best possible method to perform the sub tasks in a worker’s job. This is the original piece-rate compensation model to maximize the workers’ productivity and to identify and train the employees on the basis of personality and skills analysis.
There are many advantages accrued by the right implementation of time studies in any work environment. Some of the key benefits are:
• It helps in improving the existing methods of performance improvement irrespective of the industry or size of operations.
• The studies will also help in identifying the right floor plan or operation layout of the factory or facility.
• The results of the time study when implemented lead to better resource utilization, higher job satisfaction and overall efficiency.
• It can also be used to cut manual effort because of the implementation of better workflow processes.
History
The time and motion studies are the keystone of the scientific management movement started in the late nineteenth century in the United States of America. These are the results of the work done by the stalwarts of the scientific management movement – Frederick Winslow Taylor, Frank B Gilbreth and Lillian Gilbreth.
Fredrick Winslow Taylor is the father of scientific management and in fact the movement itself is also known as Taylorism. He published his path breaking book, The Principles of Scientific Management in the year 1911, wherein he describes in detail how scientific management methods can help in improving worker productivity in an industrial set up.
The core idea behind the scientific management was a clear demarcation between the responsibilities of the manager and the workers. The managers involve primarily in planning whereas the workers are responsible for the execution of the tasks. The key concept for the Scientific Management is the organized study of work. In this the work is broken into simple elements and the worker’s performance is enhanced using systematic improvements.
Though the model has been written off many times since its conception, one can safely conclude that the model will be in force as long as industrial society prevails.
As per the research done by Taylor, any work can be broken down into smaller entities and these simple tasks can be planned so that the productivity can be enhanced by the use of scientific management principles. As per Taylor the scientific management is a better way to ensure that work is done effectively as against the more often followed initiative and incentive scheme. To determine the best way to perform a task, Taylor experimented using Time Studies. Time studies were done using a stopwatch to measure the time taken by a worker to perform the different actions to complete the task. The objective was to identify the best way to do a particular job.
The research on time study has evolved scientifically from the time of Taylor and Gilbert. Even in the current times, manufacturing companies still use the principles of time study to develop the best way of executing a particular task and thus increase the efficiency. The Gilbreths developed the micromotion analysis which involves elimination of unnecessary movements and simplifying of necessary movements to enhance efficiency.
Taylor made use of Gilberth’s motion study principles in his time study and thus redefined it to gain better acceptance among the management and the workers. The resulting time study model could be divided into the analytical and constructive categories.
The time study analysis required to dividing the worker’s task into simple basic movements, removing the useless movements, identifying and timing the quickest motion paths and types and using the time taken to perform these activities as the standard time for completing the tasks.
In the constructive time study, the elementary movements required in any activity were grouped together in different combinations. These were recorded and indexed so that this knowledge repository can be used to determine the time required to execute similar tasks in any job or factory setting.
The results of these time studies done by Taylor are the Principles of Scientific Management.
These concepts played a key role in the growth of Ford and the way the organization operated. The Ford model was supply driven where standardized goods were produced by semi-skilled employees with high-efficiency due to the implementation of Taylor’s Scientific Management principles.
Currently the lean production organizations use the time and motion studies to set up the standards and obtain continuous process improvements in the demand driven markets.
Leveraging Facebook Promotions
Social media marketing is a major part of every business strategy for companies both big and small. Companies such as Dell, Caterpillar, Amazon and others are leading the social media bandwagon and showcasing the benefits that they are able to harness from it. Thanks to social media, aggressive marketing is no longer a privilege that only the big players enjoy. Social media have created a level playground wherein everyone – small or big, can leverage the benefits.
To gain from Facebook promotions, it is important to have a well thought out promotion strategy in place.
- The first step is to decide the objective of the promotions. Is it to have a growing fan-base? Do you want to get the market to sample your product? Are you trying to increase the product awareness?
- Next, you need to frame the strategies for achieving these objectives. These could involve price discounts, freeware, coupons, samples, contests etc.
- Once the strategy is in place, you need to choose the right Facebook application. It is important to go through the promotion guidelines laid out by Facebook so as to not violate any rules.
The reason Facebook promotions are a big success is because of their ability to localize the promotions and the in-depth customer profiling they offer. Customizing your campaign to meet the customer’s needs and tastes is the best marketing promotion and thanks to Facebook, it is a possibility! Utilizing third-party tools such as Edgerank Checker would help in creating focused campaigns which can convert into valuable leads for the company.
It would be a good idea to analyze some successful examples of Facebook promotions before you start on your own.
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