Title Details

Steven M. Bragg, CPA (Centennial, CO), has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young and auditor at Deloitte. He is the author of over 30 books primarily targeted toward corporate financial leaders (controllers, treasurers, and CFOs) and their needs. Bragg received a master's degree in finance from Bentley College, an MBA from Babson College, and a bachelor's degree in economics from the University of Maine.

Janice Roehl-Anderson (Cherry Hills Village, CO) is the Principal in Charge of Deloitte's Enterprise Applications practice in the Northern Pacific Region.?She has over 20 years of global systems-related experience in a variety of sectors including Consumer Business, Media and Entertainment, Communications, High-Technology Manufacturing, State and Local Government, and Financial Institutions. Additionally, she has extensive experience with global implementations and with mergers, acquisitions, and divestitures and is responsible for coordinating Deloitte's enterprise applications-related efforts on MA&D projects.??Janice has a Bachelor of Business degree from the University of Washington and an MBA from the University of Southern California in Accounting and Information Technology. She has co-authored over ten books for John Wiley & Sons.

Preface xi

Chapter 1: The Controller’s Job 1

Main Job Functions 1

Job Description 2

Job Qualifications 5

Organizational Structure of the Accounting Department 6

Ethics 11

Chapter 2: Internal Control 13

Basic Elements 13

Controls to Use in Your Business 20

Elements of Internal Accounting Control 48

Levels of Controls 49

Fraud 50

Auditing for Fraud 54

Notes 55

Chapter 3: Planning and the Strategic Plan 56

Strategic Plan Overview 56

System of Plans 59

Planning Cycle 60

Planning Roles 62

Planning Timing and the Planning Period 63

Business Mission 65

Developing Long-Range Objectives 67

Developing Long-Range Strategies 69

Chapter 4: Long-Range Financial Plan 73

Layout and Purpose 73

Trends of Revenues and Profits 75

Capital Investments 76

Cash Flows and Financing Requirements 77

Risk Analysis 78

Breakdown by Business Unit/Product Line/Geography 81

Financial Position 81

Chapter 5: Annual Plan 87

System of Plans 87

Additional Budget Modeling Topics 100

Annual Planning Cycle 102

Role of the Controller 103

Sales Planning: The Base of All Business Plans 103

Steps in Developing the Near-Term Sales Plan 104

Methods for Determining the Sales Forecast 105

Changes in the Sales Mixture 109

Changes in the Sales Price 111

Changes in the Cost 112

Chapter 6: Sales 114

Role of the Controller 114

Sales Analysis 116

Sales Standards 120

Sales Reports 122

Product Pricing 125

Chapter 7: Distribution Expenses 132

Role of the Sales Manager 133

Analyzing Distribution Costs 133

Analyzing by Application 135

Setting the Distribution Budget 141

Chapter 8: Direct Materials and Labor 148

Objectives 148

Role of the Controller 149

Types of Cost Systems 152

Measuring Direct Material Costs 153

Controlling Direct Material Costs 154

Controlling Direct Material Quantities 155

Measuring Direct Labor Costs 158

Controlling Direct Labor Costs 159

Target Costing 165

Chapter 9: Overhead 167

Need for Overhead Controls 168

Responsibilities of the Controller 169

Account Classifications 170

Fixed and Variable Costs 172

Cost Allocation 178

Controlling Overhead 186

Production Reports 190

Chapter 10: General and Administrative Expenses 193

Functions Involved 193

Accounting for and Allocating Administrative Expenses 194

Responsibility Accounting 196

“Unique” Expenses 197

Controlling Costs 199

Chapter 11: Cash and Investments 202

Objectives of Cash Management 202

Role of the Controller 203

Cash Collections 204

Cash Disbursements 207

Investment of Short-Term Funds 208

Accounting for Records of Investment 210

Cash and Investment Controls 214

Chapter 12: Receivables 221

Functions of the Credit Department 221

Shortening the Receivables Cycle 225

Reserve for Doubtful Accounts 227

Receivables Fraud and Control 227

Chapter 13: Inventory 229

Inventory Management Systems 229

Inventory Tracking 235

Physical Inventory Procedure 241

Inventory Valuation 244

Inventory Fraud and Controls 247

Chapter 14: Property, Plant, and Equipment 251

Role of the Controller 252

Capital Budgeting 253

Postproject Appraisals 267

Other Aspects of Fixed Assets 268

Chapter 15: Liabilities 271

Objectives 271

Controls 272

Credit Agreement Provisions 274

Debt Capacity 275

Bond Ratings 276

Leverage 278

Chapter 16: Equity 281

Role of the Controller 281

Cost of Capital 282

Dividend Policy 290

Long-Term Equity Planning 291

Repurchasing Common Shares 298

Capital Stock Records 299

Chapter 17: Operational Accounting 301

Create Departmental Job Descriptions 301

Create a Departmental Training Program 303

Clear Out Excess Documentation 306

Streamline the Accounting Workflow 307

Document All Major Processes 309

Schedule the Department 310

Correct the Underlying Causes of Errors 312

Use of Best Practices 314

Outsourcing Selected Accounting

Functions 316

Chapter 18: The Fast Close 322

Different Types of Fast Close 323

How to Achieve a Fast Close 324

Enhanced Closing Process 339

Summary 339

Chapter 19: SEC Filings 341

Form 8-K 341

Annual 10-K and Quarterly 10-Q Reports 348

Timing of Annual and Quarterly Report Filings 350

Form S-1 351

Form S-3 352

Form S-8 353

Forms Requiring Payment to the SEC 354

Fedwire Payments 355

Chapter 20: Performance Measurements and Trends 356

Performance Measurements 357

Trends 373

Interrelationship of Ratios 375

Just-in-Time Ratios 375

Chapter 21: Financial Analysis 378

Analyzing Financial Statements 378

Analyzing Working Capital 385

Analyzing Financing Options 391

Services Profitability Analysis 394

The Throughput Analysis Model 397

Production Outsourcing Decision 399

New Product Decision 401

Chapter 22: Cost Reduction 404

Types of Reports Used for Cost Reduction Analysis 404

Spend Analysis Overview 408

Spend Database 409

Supplier Consolidation Analysis 410

Parts Consolidation Analysis 412

Maintenance, Repair, and Operations Item Analysis 412

Spend Compliance 413

Spend Analysis Reports 414

Workforce Reduction Analysis 417

Workforce Reduction Issues 421

Workforce Reduction Alternatives 422

5S Analysis 423

Check Sheets 424

Error Quantification 424

Fixed Cost Analysis 426

Ishikawa Diagrams 427

Value Stream Mapping 427

Waste Analysis 430

Chapter 23: Taxes 432

Tax Strategy 433

Tax Organization 434

Role of the Tax Manager 436

Tax Records 437

Tax versus Book Accounting 440

Sales and Use Taxes 441

Proper Classification of Accounts 442

Chapter 24: Selecting a Financial Information System 444

Reasons to Purchase Software 445

Defining Systems Requirements 445

Existing System Documentation 448

Joint Sessions 449

Preparing the Request for Proposal 452

Distribution of the Request for Proposal 457

Review of the Vendor’s Completed Proposal 458

Reference Calls 462

Demonstration 463

Site Visits 463

Cost of the System 464

Final Selection 465

Contract Negotiations 465

Postimplementation Review 466

Appendix New Controller Checklist 469

About the Author 477

Index 479