Error reduction and risk
Matthew Leitch examines how eliminating mistakes can improve business performance.When you are at school and university, getting things right 96% of the time will get you a top grade. Work is different, and most trainee accountants soon realise that being right only 96% of the time at work can be disastrous.
Checking what we do and trying to be as reliable as possible are at the core of our training and built into many of the traditional techniques of bookkeeping and accountancy. Double entry bookkeeping requires double entries in part because of the inherent error checking it provided before computers did the job. Bank reconciliations are a chore we do not regard as optional.
But not every job creates the same pressure to be consistently correct. There are jobs in marketing where it is hard to know if you have been right or not. A sales person who made the right choice 96% of the time would be a star. Consequently, there are big differences between functions within organisations in their attitude to errors and their skills in preventing, detecting and correcting them.
Most of the time accountants focus on errors made within their own work but there are some very important exceptions. This article looks at some of the ways that accountants can be useful outside their department because of their attitude towards errors and skill at reducing them.
This is an extract from the Business & Management Magazine, Issue 260, December 2017.
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Full article is available to Business and Management Faculty members and subscribers of Faculties Online.