Utilising the power of the follow-up

Businesses should have an effective strategy to deal with these problems. 

     For example, pending issues such as customer complaints should receive high attention from management. An unresolved problem can hurt the company’s image and credibility, which will eventually impact the bottom line. 

     Examples of such long-lasting issues often found in departments of a business include: 

_ Production department – installation of new machines that has been dragging for several months, causing delays in resolving a bottle-neck at a work station. 

_ Sales and marketing department – delay in final decision for a new product design has caused investment delay and postponement of the product’s launch to the market. 

_ Purchasing department – delay in supplier’s factory audit has limited the number of alternative vendors for the company in sourcing raw materials. This increases the risk of material shortage, through needing to rely on only one or a few suppliers.

_ Quality assurance department – postponement of the internal quality audit has undermined standard practice in quality assurance operations resulting in ineffective quality controls.

_ Logistics department – hesitation in making a decision on the new warehouse location has caused a delay in construction and put operations at risk of running out of storage space.

 

In many cases, the main reason for the delay is down to ignorance or failure in assessing the impact and consequences of leaving outstanding work. Allowed to build up, a long list of outstanding items can become a hidden inefficiency for the company. And in the long run that inefficiency can cause the company to lose competitiveness. To deal with this problem effectively, managers should employ a practical approach to track and tackle it on a regular basis, for example by:

_ Ensuring departmental meetings include a regular “follow-up” agenda.

_ Coming up with an action plan for every unresolved item on the list. 

_ Setting up clear responsibilities for persons tasked with solving items, and giving them a deadline.

_ Asking responsible persons for more frequent updates on items where progress is slow or non-existent. 

 

December represents the end of the financial year for most businesses, and accounting and finance departments need to ensure the company balance sheet is clean after the account is closed. It is important to ensure that old items have been cleared, and proper adjustment is made to the book to reflect the correct figures. For some companies, the balance sheet may contain non-reconcilable items that date from a year ago or longer.     

If the company has instituted an effective follow-up process during the year, the annual closing should be easy. In contrast, the lack of such a mentality can cause a huge workload at the end of the year. The accounting people may have to stay late every year-end to ensure the complete closing of accounts. Cooperation from all departments is extremely important in enabling finance personnel to carry out this task. 

 

 

Yanyong Thammatucharee is senior vice president for Accounting and Finance at Central Marketing Group.