Quote:
Originally Posted by competentone
$250 for that!?!
It sounds like you should be working on the more serious problem with your accounting system rather than worrying about the lock-washer.
There is definitely a lot of fat that can be cut out of your business if it costs the company $250 of "processing" to make a single purchase.
It sounds like some "paper pushers" need to go.
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Sigh, it's just business in the US.
A person enters a purchase request. Of course they need a work order to charge it to so they submit a notification that someone else plans and turns into a work order. That work order is tracked and eventually reconciled.
The purchasing department issues a PO from the purchase request. It's tracked and eventually paid. The account is managed, books are kept, all that takes time. people's time. Those people doing that work have supervisors. They have people in HR supporting them. they have people in IT supporting them. There are lots of hidden costs that you will never see until you do a total detailed analysis and I've done plenty over the years. Yes there are some silly steps that don't add any value but most are required by law to comply with acceptable business practices.
Even a little business with 10 employees will rack up accounting costs at a surprising rate when you factor in all the hidden costs to support them. Figure the cost of paying an acountant (and all the costs to support them) and spread that cost over the tasks he or she performs and you get the true cost to perform those tasks.
These numbers are usually not analyzed because they are considered indirect costs but if you really look at them you will see how much it really costs to do business. $200 to $250 to fully process a PO from start to finish isn't that unusual. That's only about 3 billable hours when total costs of payroll, benefits, office space, computers, software licencing, etc. are all considered.
That is why managers usually have gray hair.
Plus a business like the one I work for that does $28 billion a year in sales has to have a pretty big accounting department.
Accountants are like lawyers. They create their own need. They make their own rules. They make their own vocabulary. You can't do business without them.