Quarterly Update – 1995 Qtr 2

Todd Herman

The term "flexible manufacturing" stresses the ability to change the layout and setup of sophisticated machines to reduce setup and cycle time. Flexible manufacturing also requires technically skilled workers to effectively use these machines. Many recent news articles show that good jobs go unfilled because employers cannot find persons with solid skills in reading, writing, algebra, geometry, and logical reasoning.

We see a similar trend in office work, particularly at companies installing sophisticated systems to improve office productivity. Imaging and workflow systems – applications that gather and group documents electronically, allow employees to review and annotate these documents on screen, and create a transaction on a different system from the work just taken – are examples of these systems. Skills such as knowledge of systems concepts, ability to construct simple queries, and interpretation of workflow processing statistics could soon be entry level requirements for clerical staff.

More Versatile Employees Needed

In both manufacturing and office work, versatile employees are needed. Recent examples from our clients support this observation.

  • Every time a person leaves the finance department, the CFO upgrades the position to reward education and experience. Currently, an entry-level staff accountant at this client requires at least a CPA, CMA, or MBA. This CFO is intent on building a strong and flexible finance and accounting team.
  • Clerical employees with minimal skills could function reasonably well when margins were strong and paper processing was the only option. These employees now create a dilemma for the VP of Finance driving the implementation of an imaging and workflow system to reduce the company's investment in accounts receivable. Managers at this client believe that many current employees will not be able to grasp the concepts of the new systems, and will need to be replaced with more highly skilled employees earning higher wages.

Education, training, experience, and experimentation enhance versatility. We have recently enhanced our versatility to better serve our clients by:

  • Becoming a Lotus Notes Business Partner – A client called us wanting to share internal information with its customers. We understood that Lotus Notes had the security, communication, and replication features that the client needed for this project. Before undertaking the client's project, we enrolled in the Business Partner program, attended the recommended one week classes on Notes, and spent several additional days researching, using, and understanding Lotus Notes.
  • Learning Action Workflow Analyst – A client, undertaking a review of its credit and receivables function in preparation for an imaging and workflow system project, wanted us to document our work using this process mapping package. We bought and learned – at our time and expense – this package to better serve the client, but also to develop our skills.

We believe that we are currently – and will continue to be, because of our commitment to improve our versatility – well suited to meet new challenges, and avoid the obsolescence that haunts traditional accountants. Versatility is no longer required to maintain a competitive edge – it is now necessary to avoid obsolescence.

Thank you for your calls, referrals and introductions and your business – these are the keys to the growth of my practice. We welcome the opportunity to discuss your needs and explore ways that we can help support your company's future success.

Respectfully submitted,

Todd L. Herman

Todd L. Herman

Client Project Update:

I am pleased to provide you with an update on our client projects. Projects we have completed over this period are...

Identifying Changes to Methods of Calculating Returns and Allowances Reserves

Identifying changes to the method of calculating the returns and allowances reserve of a sportswear manufacturer, eliminating large variations in the reserve balance caused by the previous method.

Identifying Adjustments to Allow Merger of Account Records

Reconciling the intercompany accounts of a knitting company acquired by an apparel manufacturer, identifying adjustments to allow final merger of the accounting records.

Designing Lotus Notes Database

Designing Lotus Notes databases for an industrial coatings manufacturer, improving customer access to product, safety, and pricing in-formation without compromising system security.

Improving Inventory Account Timeliness

Designing a network-based system to accept fabric usage transactions from an AS/400 and prepare accounting entries and management reports, improving inventory accounting timeliness and accuracy for a fashion apparel designer and marketer.

Computing the Cost of Activities in the Accounts Receivable Department

Computing the cost of activities in the accounts receivable department of a sheer hosiery manufacturer, to recommend changes in processes and organization to reduce costs and cycle time.

Developing Custom Allocation Functions

Developing custom allocation functions in Visual Basic to enhance Excel budget worksheets for a children's apparel manufacturer, allowing more accurate cost allocations.

Assisting in Implementing an Operating Budget

Assisting a law firm's partners in implementing an operating budget and analyzing variances from budget, identifying cost control and billing opportunities.

Future projects we are planning include...

Receivables Report Development

Develop management reports for the receivables function of a knitwear company, to identify accounts and processes requiring special attention.

Design Order Preparation System

Design an order preparation system in Lotus Notes that will allow customers of an industrial coatings manufacturer to electronically submit orders, eliminating the need to key paper orders.

Design Transaction System

Design a network-based system to accept fabric receipt transactions and prepare accounts payable vouchers to upload to the AS/400 system of a fashion apparel designer and marketer, eliminating the need to manually voucher fabric invoices.

Imaging & Workflow System

Outline the effects of a proposed imaging and workflow system on the people, processes, and existing systems in the credit and receivables function of a hosiery manufacturer, enabling management to set quantifiable targets for improvement and to address implementation issues.