Proposal to address financial department understaffing through hiring

¶ … White Letters for Government Usage

Headline Information

Throughout the past recent months, our organization has been struggling with an understaffed Financial Department. The representatives of this department have written and sent several letters to the Human Resource Management Department, but we have yet to receive an answer.

The issue is severe from two standpoints. First of all, an organization of such a magnitude and which places an increased emphasis on the full satisfaction of its customers' needs and wants cannot efficiently operate with fewer accountants than necessary. Secondly, an organization which praises on offering increased on the job satisfaction to their employees cannot treat understaffing matters in a liaises-faire manner. This only proves lack of professionalism and reduced interest in resolving organizational problems. Foremost, the direct impacts upon the Financial Department of the delay in resolving our request revolve around reduced trust in the organization, low morale and consequently reduced performances. The tremendous amounts of work that the current accountants have to handle are far too large and the employees are beginning to voice their dissatisfactions, stating even the possibility of searching for accounting positions within other organizations. Such actions would leave our company facing even more severe problems, such as high employee turnover and the consequent costs of replacing the personnel.

Giving the HRM Department however the benefit of a doubt relating to lack of time in addressing our request, we have developed a potential solution to the incurred issues.

1. Executive Summary

2. The Proposal

2.1 Importance of Good Accounting Practices

2.2 Timeline

2.3 Resources Required

2.4 Benefits Presented

3. Conclusions and Recommendations

1. Executive Summary

Given the lack of response from the Human Resource Management Department, the Financial Department has decided to address the matter in a more convincing approach. This basically revolves around presenting the gravity of the matter, and the importance of possessing skilled and sufficient accountants. Foremost, we have also come up with a solution, which will be presented in terms of timeline, resources required and benefits derived. The following pages detail these aspects.

2. The Proposal

2.1 Importance of Good Accounting Practices

Before actually presenting the proposed solution, we should first reveal the importance of possessing skilled accountants. The organization is currently five people short, three in account receivables and two in accounts payable. The personnel shortage affects the financial aspect of the organization in the meaning that with fewer workers on accounts receivables, the collectable and aging accounts are suffering. Then, in terms of accounts payable, the organization suffers as they encounter an incapacity to regularly pay their bills. As a consequence, expenditures increase as the suppliers and service providers add penalties and interest rates to the issued bills. All in all, the organization loses money as the Financial Department is understaffed.

The accounting practices directly impact the corporate performances and this is often measured in terms of survival rate. In this order of ideas, an organization which conducts internal accounting with different frequencies, stands different chances of success. For instance:

Monthly accounting retrieves an organizational survival rate of 79.9%

Quarterly accounting reveals a survival rate of 71.5%

Half yearly accounting stands a 49.9% chance of corporate survival, and Annually accountings retrieve a survival rate of 36% (Weltman and Silberman, 2006)

Then, the quality of the accounting services also impacts the organization's chances of success as follows:

Excellent to good quality of accounting records stands a company survival rate of 63%

Average quality retrieves a survival rate of 49.8%

An inadequate quality of financial records stands a survival rate of 20.1%, and Poor or inexistent quality of the accounting records stands a company survival rate of 2.5% (Weltman and Silberman, 2006)

The frequency and quality of the accounting services are both determined by the sufficiency in accounting staff members and their qualifications. Consequently, our organization has to hire more accountants in order to increase its chances of survival and future success within the market and the industry. Also, good accounting practices help create and promote a favourable corporate image among stakeholders, as the organization will reveal integrity and lack of fraud (Messmer, 2005).

2.2 Timeline

The process of recruiting and hiring qualified, skilled and experienced staff members for the Financial Department is often an effort which requires larger amounts of time. However, in the given situation, the company does not afford to go through all the processes in the traditional manner, which takes weeks, or even months. Were we to engage in such operations, the Financial Department would only feel an even lower employee morale and would register reduced performances. All these would first materialize in expenditures with delayed bills, loses in incapability to recuperate accounts and in the end, the loss of some current accountants.

As a result then, we need to seize the opportunities presented by the market and react in a time efficient manner. The actual timeline proposed by the Financial Department relative to the hiring of five more accountants could be succinctly presented as follows:

Within the first week, the employees are asked to refer accountants they know - this process is cost efficient and relies on the idea that an employee will not refer an unqualified acquaintance

If the employees do not refer sufficiently skilled accountants, the company would post an advertisement, which would run for the second week

The third week would collect the received resumes, select the most suitable candidates and commence the selection interviews

The fourth week would make job offers for the selected five accountants, two for accounts payable and three for accounts receivable

The second month would employ two new accountants, one for accounts payable and one for accounts receivable

The third month would employ two more accountants, one for accounts payable and one for accounts receivable

The fourth month would employ the remaining member for accounts receivable

2.4 Benefits Presented

There are multiple benefits that our organization would feel as a result of hiring the new accountants. In terms of the primary identified issues, the new accountants would reduce organizational costs in the meaning that the accounts payable would be processed in time and the suppliers would not charge the company penalties or increased interest rates. Then, the liquidities of the company would also increase as the new accountants would help with the collection of the accounts receivable. Future investments would be better possible and a timely payment of debts would also help the employer. For instance look at the employees who receive their wages on time as a result of a timely collection of the accounts receivable; knowing that they can count on the stability of the pay check, the corporate employees will increase their efforts and also increase the quality of their work. Further more, this could easily materialize in a superior quality of the products and services delivered by the organization, to eventually materialize in increased customer satisfaction and ultimately, larger corporate profits.

Other benefits refer to the better capabilities in keeping the accounts in good order. This would ultimately materialize in better possibilities of attracting investors or contracting bank loans. Also, the public perception of the company would improve as the new accountants would help with the timely payment of state taxes. "Failure to file your income taxes on time is an offence. Delaying payment will result in penalty fees. To save yourself time and hassle, you should develop the habit of filing and paying your taxes on time. Being on time also reflects well on your business" (Government of Singapore, 2008).

Ergo, the return on the required investment would offer substantial benefits as the newly hired professionals would bring the organization to standards in reduced time periods.

3. Conclusions and Recommendations

Our company has been struggling with a personnel shortage in the Financial Department and we often encounter challenges in collecting the accounts receivable and paying the accounts payable. Our efforts to attract the attention and generate action from the Human Resource Department have failed. As a response to the lack of interest and professionalism revealed by the HRM department, we have decided it would be best if we came up with a solution and presented it to the management of the organization.

We recommend the hiring of five new accountants, throughout four months (the first month will be for selection, the second one for hiring two accountants, the third month for hiring two more accountants and the fourth month for hiring the remaining one accountant). on-the-job training would be offered by the existent accountants within the Financial Department. The resources required revolve around financial investment and time consumption. However, we do not afford not to hire the new staff members, as the negative consequences could be tremendous. The current investment would return within the organization, making it stronger and better able to adapt and respond to the micro and macro environmental demands.

As a recommendation for the future, the management could pay closer attention to the staffing matters and compare them with the amounts of work requested from a respective organizational department.