Accountants are responsible for presenting the financial picture of a company. They analyze and then report all the financial data that they can gather so that the rest of the management and the investors understand the actual financial position of the company. The analysis and reporting function makes the accountants a vital part of the business, but an accountant is a human and humans make mistakes.
With the advancements in technology, the accountants use various accounting software and newer methods of accounting which would significantly reduce the chances of any error, but still, there is little chance of error happening. The root cause of these errors may be a minor mistake or a case of hiding fraud done in the company. No matter the reason if an error is caused, the company will have to face the consequences.
Also, the management should take decisions after scrutinizing information in a detailed fashion. Every company wants betterment in itself, but this is the most common time of a mistake happening in the company. In any case, if an error does occur in the company, the management should take a lesson from it and then strive.
Methods for Error Reduction
There are many simple ways by which you can significantly reduce the mistakes which are made during the business process and make the process error-free.
Brainstorming is one thing that needs to be performed to reduce the error occurred in the business process. Brainstorming will allow the management to understand the various ways error can be lowered down during the business process. Any occurrence of fraud or any mistake will be considered, and how can the activity be curbed.
2. Keep it Simple
It is human nature that simple tasks are more easily understood. Keeping things simple is for the betterment of both the management and the employees. Keeping things simple can be done in many ways. Colour coding different documents are one of the methods by which simplicity can be achieved. Using the checkbox method will also help the management to keep track of the various jobs to be done.
3. Which Process Works
The management should do test runs of the various process to achieve the same result. Using new and improved methods will significantly increase productivity and reduce the errors being made in the process. The addition of new and enhanced technology such as accounting software, new machinery will help with the efficiency of the business process.
4. Good Error Detection
Without detecting what error is occurring, the management will not be able to take corrective steps for the error. It is also advisable that the administration takes steps periodically to understand where they going wrong. A periodic audit of the company will increase the chances to catch an error before it is made.
5. Try Removing the Factors Causing the Error
The factors causing the error is the factor which is not needed in the business procedure. These factors can be removed, which will leave a lesser chance of mistakes to happen. The errors that are just waiting to happen can be reduced by drawing up various workflows and finding the flaws in the process. In some instances, some other method can be combined with the customarily followed procedure, which may increase the efficiency of the plan and reduce the errors being caused.
6. Mitigation Process
Mitigation methods can be defined as the inbuilt safety methods for a process. These process will significantly reduce the extent of damage caused to the business due to a faulty or erroneous procedure. For example, banking websites need to be very secure and cannot allow any fraud, and so they have implemented a mitigation method that will lock the site for a person after a certain number of incorrect passwords put in the system.
7. Total Involvement
This method is straightforward. All the management has to do is to involve every employee in the business processes. Once an employee feels that he is an integral part of the business, he will try to prevent errors from his side. This is thinking about the future of the company as a whole and how can you improve the situation of the company.
The methods mentioned above are some of the most followed procedures of error detection and minimizing the error. In any way, this is not a comprehensive list of such methods and management can either follow a process or invent a new approach which would suit the requirement of the company. Error detection takes a keen eye and thus, it is always recommended that you seek the help of a management consulting firm. JAXA is one such firm which will assess your business process and help you achieve great success. For more details, do contact us – we would be glad to help out.