There’s a funny thing about growth that some companies don’t take into account when gazing at the corporate stars and dreaming about market share. You get busy. Very busy. Multitasking becomes your best friend as your team’s collective mind gets accustomed to tackling numerous tasks at once, constantly prioritizing items while leaving others on the accounting back-burner until a better time presents itself.
Naturally, even world-class multitaskers have bad days, where items slip through the cracks that ordinarily wouldn’t. And depending on the nature of that task, the reverberations of that slip-up can have a lasting, detrimental effect on your organization. That’s exactly why open item accounting is so important to the financial well-being of any business, an organizational tool that might be simple in concept but mighty in its benefits.
In fact, your open items tracking is so useful, it’s just as popular with auditors as it is with accounting departments, perhaps even more so. For that reason, Embark has created The Open Items Template For Accounting for both businesses and auditors to use as a source of direction, insight, and organization. Integrate our template into your own processes and see what a difference a finely-tuned tool can make in making certain nothing slips through those troublesome cracks again.
Open Items Overview
There’s no absolutely correct way to track open items, but there are plenty of wrong ways. As you’ll see from our accompanying template, the trick to effectively tracking your open items is providing sufficient detail without going overboard on minutia. Too deep of a dive limits its simplicity and utility while a lack of information doesn’t give enough guidance.
Again referencing our template, stick to the basics to maximize clarity and ease. Each open item should include a short description of the item, priority level, the dates opened and closed, which team member is responsible for its completion, and an open or closed status. Embedding drop-down menus into the cells will help ensure uniformity as different people update the open items, keeping it neat, tidy, and easy to understand.
Open Items Best Practices
Every company is different, so the most effective way to use an open items list is dependent on your own team, operations, and even technology. However, whether you’re printing out a blank copy of our template every day or using a more advanced tracking tool, a few best practices will always come in handy.
If your accounting department is a one-person shop, you obviously don't have to worry about distributing an open items list within a group. However, a growing accounting department means that many people are using the same tool throughout the day. Some companies prefer to email the open items list between team members, where one completes their portion and sends it off to the next person. Cloud-based solutions are also popular choices, where everyone has access to the document and completes their portion. Find a distribution system that works best for you and run with it.
Like most functions within your accounting and finance departments, proper internal controls keep everything on-track, reliable, and accurate. Integrating some simple controls into your open items can make sure your team is consistently and thoroughly addressing them. For instance, if you decide that emailing our open items template between your team members every day works best, printing out the list and having your controller sign-off on it is a quick control that enforces the process.
Ideally, you want your team to complete the open items on a daily basis. Allowing those items to accumulate even for short durations of time only increases the time, effort, and resources needed to complete them. However, if a daily process is impossible between packed schedules and overflowing responsibilities, find a frequency that doesn’t create traffic jams in workflow but also stays on top of the open items. Be careful, though, because they pile up fast and have a penchant for crashing back down to Earth like an accounting avalanche.
Now that you have The Open Items Template For Accounting and a few pointers in your pocket, it’s time to implement your own open items process to keep you on track. Trust us when we say your financials and auditor will thank you for your efforts. Of course, Embark will always be here with more of our sage wisdom and expertise to help propel your organization into a bright and prosperous future.