A Point of Conflict in Accounting
A common point of conflict in the field of accounting
exists between non-management level employees and management concerning the
logging of time it takes to complete projects for clients. The amount of time
an employee logs dictates how much the firm will charge the client. If a
project takes less time than projected than the firm charges the client less
and makes the client happy – everyone wins. If an employee take longer than the
budgeted amount of time then the firm has to charge the client more money to
cover the cost of the employee. The added cost makes the client unhappy and the
firm will come down hard on the employee. This will motivate employees who fall
behind under report the amount of time it took them to complete a project.
Though this falsified report seems to not hurt anyone the company ends up at a
deficit because they still have to pay the employee for the extra time but they
do not get to charge the client extra money to compensate. So management is
constantly engaged in a campaign to persuade their employees to be honest with
reporting their hours.
A Possible Conflict
A partner, Pam, notices one of her senior associates,
Sebastian, working long hours on his only project. After a few weeks, Sebastian
finished his work and turned in an excellent project. Pam then checks to see
how the client should be charged for Sebastian’s work. Though pleased with his
work, Pam was a little hesitant to check the hours, as she was certain he went
way over to create such a quality project. To her surprise, the hours were
within the budgeted amount. She promptly called Sebastian into her office where
she inquired about the hours expended. A little defensively, Sebastian said that
he worked what he stated. Furthermore, he asserted that even if he had worked
longer it was only his own time that he wasted so it should not make a
difference. With an impressive employment of judicial invention, Pam explains
to Sebastian that, outside of the fact that understating hours is unethical and
a lie, it really is not fair to the company that we give clients projects that
cost more than we charge them. In the future, clients will be expecting projects
of a quality that cannot be replicated in the budgeted amount of time. It is
only fair (JUSTICE) that the client be charged the amount that reflects the
true cost of labor.
Very interesting post. As I read it I was on the side of sebastian. It was only his time that was being wasted, why worry others? But then your topic about how that client will always expect that level of service for that price makes a very good point. I was convinced, well done.
ReplyDeleteI agree with Joseph, I couldn't see the problem until the quality aspect was brought to my attention. However, if an employee is constantly willing to work more hours, turn in excellent projects, and understate their time; doesn't that solve the problem? Wouldn't that just hurt the employee and not the company?
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