AUTHORIZATION PROCESS
Authorization of an Accounting Company Pluscom taloushallinto Oy
Sonja Heinänen
Bachelor’s thesis November 2018
Degree Programme in International Business
ABSTRACT
Tampereen ammattikorkeakoulu
Tampere University of Applied Sciences International Business
SONJA HEINÄNEN Authorization Process
Authorization of an Accounting Company Pluscom taloushallinto Oy Bachelor's thesis 48 pages, appendices 1 pages
November 2018
The thesis was commissioned by accounting firm Pluscom taloushallinto Oy. Company is located and found in Finland, offering financial services for their customers. Pluscom taloushallinto Oy is seeking the authorization given by the Association of Finnish Ac- counting Firms. The authorized accounting company has benefits which will be show- cased in thesis work. The goal is to follow the process in the means of an actual project plan concerning the authorization and find a solution for efficient reposting to the Asso- ciation of Finnish Accounting Firms. The website of the association and interviews will be the main sources for the theory behind the authorization of references in the thesis.
The authorization process is led by the CEO of Pluscom taloushallinto Oy, Jaakko Oikemus. The thesis will start by topic introduction and is followed by discussion of the authorization in theory. The third chapter concentrates on the case company with closer look on their side on the process, what actions are needed and what are the steps and overall goals. Finally, are conclusions and results on behalf of the commissioner.
Authorization, project management, tal-sta industry standard
CONTENTS
1 INTRODUCTION ...5
1.1 Project Purpose ...7
1.2 Project Need ...8
1.3 Project Objective ...9
2 AUTHORIZATION PROCESS, THEORETICAL FRAMEWORK ...11
2.1 Association of Finnish Accounting Firms ...11
2.1.1 TAL-STA Industry Standard ...12
2.1.2 Accounting Firm Authorization in Finland ...18
2.2 Concepts and Theory (Working Methods and Data) ...19
2.2.1 Project Management and Planning ...20
2.2.2 WBS – Work Breakdown Structure ...21
2.2.3 Process Milestones ...22
2.2.4 RESEARCH QUESTION ...22
3 PLUSCOM TALOUSHALLINTO OY ...23
3.1 Current Situation of the Company ...23
3.2 Authorization and Membership Process ...28
3.3 Pluscom taloushallinto Oy’s next stages of the process ...29
3.4 Company’s Goals for the Authorization Process ...31
3.5 Risk management ...35
3.6 Possible Issues and Problems ...37
4 CONCLUSIONS ...39
4.1 The process so far ...39
4.2 How Will the Authorization Process Impact on the Company? ...39
4.2.1 What kind of struggles did the company face? ...40
4.2.2 What Could Have Been Done Other Way? ...41
4.3 Can the benefits of the Process already be seen? ...41
4.3.1 Cons of the Process ...42
4.4 How Will the Authorization Effect on Pluscom taloushallinto Oy’s Develoment in the Future? ...42
5 DISCUSSION ...45
REFERENCES ...47
APPENDICES ...49
GLOSSARY
ERP Enterprise resource system
GDPR General Data Protection Regulation
TAL-STA Industry standard
KLT Accountant examination for accounting professionals
1 INTRODUCTION
The thesis will study the authorization process of an accounting firm based in Finland.
The authorization is given by the Association of Finnish Accounting Firms. The study will follow the process and research the factors affecting to it that are meaningful the commissioner.
The plan follower will explain the authorization and membership steps which are included to the process. When a company is interested of becoming member and authorizing their business, the accounting companies must meet the requirements set by the Association of Finnish Accounting Firms, such as obey by the TAL-STA industry standard. The process requirements and actions that shall be taken are listed on the Association of Finnish Ac- counting Firms website. These will be displayed in chapter two more thoroughly.
The topic is worthy of the project plan because of its newness and unique meaning to the commissioner company, Pluscom taloushallinto Oy. Its societal meaning applies most likely on the company itself, but effects on the existing customers and potential new ones.
Topic was chosen because the company demands a follow to the authorization process and by being a follower of the plan has a helpful effect on the process, therefore thesis will have a straight link to the working like to the commissioner company. My thesis to Pluscom taloushallinto Oy is associated with a prior project in the company and signifi- cance is relevant.
The authorization and membership will favour the company in many ways, of course taking into account the current situation it benefits each accounting firm slightly differ- ently. Some of the advantages are for example, the firm can be considered to have more creditability since the company’s ways of working, programs and financial situation has been checked and the staff is well educated and their knowledge is taken care of. Being authorized will bring new opportunities and chances in many means to Pluscom taloushal- linto Oy. The thesis will follow the process and show what factors are important to the authorization and membership and the work will also display how the process impacts the company, what the future prospects will most likely look like and what kind of strug- gles they might face. Each authorization process is unique since each company is different and work is handled differently.
Company profile
The Bachelor’s thesis is made for a Finnish accounting company named Pluscom taloushallinto Oy. The company has three offices located in Tampere (Pinninkatu 45 A, 33100 Tampere), Jyväskylä (PL 150, 40101 Jyväskylä) and Helsinki (Sitratori 5, 00420 Helsinki) Finland. The website address is www.pluscom.fi and contact email addresses of the staff as well as the contact numbers to each staff member is listed under the com- pany website contact section. The company started the business on 31st of October in 2002.
In 2015, Pluscom taloushallinto Oy bought the Jyväskylä business to expand from having one office in Tampere to having two in Finland. Company’s business ID is 1046280-7.
Company offers accounting and financial management services, including bookkeeping and financial statement, payroll accounting, electronical financial management and pro- fessional financial consulting. Pluscom taloushallinto Oy has staff of 19 people in total in three locations and they are expanding and growing in customer wise. Eight staff mem- bers work at the Jyväskylä office and ten persons work in Tampere. There is one staff member currently at the Helsinki office. However, the key staff members such as the CEO, Oikemus and others travel between the three offices. The job demands visiting ex- isting customers and meet potential customers.
The company’s CEO is Jaakko Oikemus, is in charge of the company. His contact email address is jaakko.oikemus@pluscom.fi and phone number +358 45 6353 901. The com- pany is owned by VP-Tili Oy, which is the parent company to Pluscom taloushallinto Oy.
The company has one KLT accountant, Jaakko Oikemus. KLT is an expert accounting examination which has been passed by 2,700 accounting professionals in Finland. The examination concerns the financial administration field and shows the reorganization of a professional skill. KLT professional Jaakko Oikemus has degree of Master of Science in Technology.
The latest revenue of Pluscom taloushallinto Oy was 971 868,70 euros of the accounting period from 1.11.2016 to 31.10.2017. The company’s revenue is divided between finan- cial management services, covering 90 percent and others 10 percent, such as program revenues.
1.1 Project Purpose
Thesis project is completed by practice-based project plan follower, meaning that the study will follow the authorization process. The thesis will be implemented through re- searching the topic thoroughly and contacting key persons in the process for additional information. The purpose of the thesis is to follow the process which the company, Pluscom taloushallinto Oy is going through. The study is consisting of the authorization and membership process of the company. In the second chapter the theory of the author- ization process will being explained.
The company has to analyse the process as a whole in order to be as prepared as possible.
A study related to project management, is to focus on the strategy of learning by doing.
These are factors which can be remembered from actions taken previously. ‘’Learning before doing is difficult to manage in practice. Identifying sources of ideas for changes that are likely to yield the results that you are seeking takes time and required a very clear view of the available sources’’. (Maylor, 2011, p. 367).
The commissioner, Pluscom taloushallinto Oy wishes to have answers to their questions, such as what will the process of the authorization signify to them. Thesis work will spec- ify the steps of the authorization process in general as well as on behalf of the company.
Company’s current situation will be described and starting point for the process in chapter 3 which will discuss entirely the meaning of the authorization and its importance for the company. The process impacts of membership and authorization on the firm and what are the outcomes including pros and cons will be reported.
The reasons why the company has decided to take on the authorization and membership process are the goals and expectations for the process. The results which ideal outcome are beneficial by creating more effective ways of working. The process would in the best case benefit the company in image wise too, such as better reputation after gaining the
authorization and becoming a member of the Association of Finnish Accounting Firms.
The goals set by Pluscom taloushallinto Oy are
• Consistent working methods
• Qualified service production
• Erasing unnecessary ways of working
• Obeying by the data protection rules (GDPR) and other rules considering the in- dustry
• Having continuous working methods for Tampere, Jyväskylä and Helsinki office
Other goals of the authorization process outcome consider the marketing means such as the company image and networking with the other members of the Association of Finnish Accounting Firms. These are important factors since the company wishes to grow and expand their business through their three offices. Reporting is one of the core objects of authorization, which is continuous after the membership has been approved. Authorized accounting firm must report to the association which goes over the written reports and comments if there is something that needs to be fixed.
These additional goals are important and valuable for the company. For example, net- working enables communication with other professionals and they might exchange ideas, advices and suggestions of how certain things should or could be done. Consulting other financial management and accounting experts can have significant and priceless meaning.
1.2 Project Need
The need for thesis and the project plan is considerable high. The company is currently on going the process of authorization and membership process and great amount of effort and information is required on behalf of the company. Since the process is complex, there is a lot that the company must need to take into account. The process steps involve the whole staff of the company to be active.
By being able to reach the expectations, company must consider the limited time and information of the process that they have. The process touches every single staff member since everyone takes a part to the process, furthermore, Jaakko Oikemus being the project leader in the company and informing the staff of the schedules and tasks.
One of the larger parts of the process is reporting to the Association of Finnish Account- ing Firms that Pluscom taloushallinto Oy is required to undertake. Reporting continues after being authorized. Therefore, the process continues through reporting after the ac- counting firm is authorized.
1.3 Project Objective
The goal is to follow the process and project plan of Pluscom taloushallinto Oy. The other goals for the thesis are to gain more knowledge on the company’s behalf what the process outcomes for them are. Pluscom taloushallinto Oy is keen to see the pros and cons of the process to their business, which will be seen once they have been authorized by the As- sociation of Finnish Accounting Firms. The aim is to reach the goals company has set for themselves. The goals are realistic and good for their core business. By reaching the goals company has more knowledge of how things are handled in each of their location, since the ways of working are same. Thesis will follow the on-going authorization process and the stages. The project stages will be illustrated in chapter 2.
This topic was given to me by the CEO, Jaakko Oikemus, of an accounting firm called Pluscom taloushallinto oy. Thesis topic is current and outcome benefits the company. The core base is of thesis is to study and research the authorization process and get a better understanding of what the process includes, what actions the company has to take in the process and how it will effect on commissioner.
At the moment, the accounting company is not really active in social media but the pro- cess and authorization will give numerous opportunities in using different social media platforms and sites, such as Instagram and LinkedIn as the company’s advantage in the future. However, currently company has a Facebook page but doesn’t post often. The authorization process would benefit their visibility in different social medias since one of their goals for the actual process is to keep in mind the company image. In addition, it gives great chances to expand the business through social media since there are many competing accounting firms. However, the authorization process also includes the mem- bership application of Association of Finnish Accounting Firms automatically, which would benefit the company two ways.
The project plan of the authorization process is unique and there is not too much infor- mation of the topic in internet nor articles or books. However, there is a lot of information on the Association of Finnish Accounting Firms website about the topic and when the companies contact them, they eventually receive additional material and data.
I contacted the Association of Finnish Accounting Firms, Kati Stenman, who works as the recruiting coordinator of the members and is also the KLT coordinator for further information of the authorization, the Association of Finnish Accounting Firms.
2 AUTHORIZATION PROCESS, THEORETICAL FRAMEWORK
2.1 Association of Finnish Accounting Firms
The Association of Finnish Accounting Firms (Taloushallintoliitto, TAL) is a Finnish association dealing with accounting firms, founded in 1968 and went by the name ‘’Kir- janpitotoimistojen Liitto r.y.’’ meaning of Accounting Companies Association. The asso- ciation cooperates with authorized accounting companies based in Finland and consulting businesses national organization. ‘’Now representing over 800 authorized financial man- agement businesses, which are taking care of almost 130 000 Finnish companies and associations financial management’’. (Taloushallintoliitto, 2018.)
Nowadays their mission is to help the members of the association by making the industry more desirable, helping with member firms financial profitability and assistance profes- sionals personal success with their career. The association respect its values which has been set to the organizations practices. These work as guidelines for the members as well and the values of the Association of Finnish Accounting Firms are listed in the graph below. The core values are expertise, transparency & communality and customer oriented approach.
In addition, the association demands its members, the authorized accounting firms to con- sidering the values in their business actions, for example personnel shall be able to grow their knowledge through education and training, such as workshops. Transparency and communality means openness and community focused organization model between the association itself and its members. The association supports the members in different way, for instance organizing training and courses or help the professionals to succeed with their career. The last value is customer oriented approach, which means that client comes first and making sure of it, the association has set rules and regulations that the members must follow. Customer focused approach is important and seen in the TAL-STA industry standard as well.
PICTURE 1. The values of Association of Finnish Accounting Firms (https://taloushal- lintoliitto.fi/tietoa-meista/organisaatio/liiton-arvot-visio-ja-strategia).
The Association of Finnish Accounting Firms and the finance industry provide base for the good industry practice, which is developed and established description of the proce- dures. Following the good industry practice, a company can produce reliable and right information as well as services to its clients and other parties. The good industry practices are combined in the Association of Finnish Accounting Firms TAL-STA industry stand- ard, binding to the authorized offices. Association of Finnish Accounting Firms controls that the member offices obey by the rules but also trough the TAL-STA. Being congruent with it is linked closely with the industry professionals. (Stenman, 2018.)
The association is the organization in Finland who authorizes accounting companies and the companies join the association at the same time as members, automatically. Annually there are 30-50 accounting office’s seeking the authorization. Majority of the applicant offices become authorized members of the Association of Finnish Accounting Firms. Kati Stenman describes that the number of the applicants is rather low because having one KLT accountant is a must for the accounting offices.
2.1.1 TAL-STA Industry Standard
The industry standard are the guidelines for accounting offices based in Finland and obeying by the Finnish laws. The TAL-STA industry standard are set by the Associa- tion of Finnish Accounting Firms. According to the website of the association, ‘’TAL- STA1, TAL-STA2 and TAL-STA3 adopted in the autumn meeting of the Association of Finnish Accounting Firms on 26 October 2011. TAL-STA4 adopted in the spring meet- ing of the Association of Finnish Accounting Firms on 3 June 2013’’. (Taloushallinto- liitto, 2018.)
Expertise Transparency
&
communality
Customer
oriented
approach
The industry standard was established for the use to providers of financial administra- tion services. In fact, it is a guideline for good industry practice. By following the indus- try standard company can provide more high quality services for the customers, authori- ties and others. Covering four areas, which are illustrated in the picture 2 and explained thoroughly one by one in the TAL-STA1-4.
PICTURE 2. The four parts of the TAL-STA Industry Standard.
TAL-STA 1
The first guideline stands for the ethical factors which the expert services should follow.
The Association of Finnish Accounting Firms lists on their official website eight factors which are included in the ethical guidelines, TAL-STA 1. These are listed as follows
• Observing the current legislation and obeying by the good industry practice
• To have responsible relationship with the customer by having customer’s best interest
• Accounting firm must be financially independent as well as in other ways
• Practices professionally, continually, attentively and consistently
• Work for the reputation of the financial industry through the business practices
• Promote and maintain the collegial relationships
• Trustworthy actions regarding public relations and announcements
• Notice and take care of the professional development as employer as well as per- sonally
TAL-STA1 Ethical Guidelines
TAL-STA2 Fulfillin an Assignment
TAL-STA3 Accounting
Service
TAL-STA4 Payroll Accounting
Service
However, the member of the association must fulfil the requirements and rules which has been set and announcement actions must be raise confidence and the firm has to mention that it belongs to the Association of Finnish Accounting Firms as a member.
TAL-STA 2
The second one, TAL-STA 2 considers fulfilling a commission. It displays the criteria which is needed to meet when taking and progressing with a commission. In addition, the association has listed which factors are effective and important in the process. There are four areas which criteria needs to be met by the accounting firm.
The Association of Finnish Accounting Firms has listed four factors which a firm should follow and take into account when fulfilling an assignment. Steps handle differ- ent stages from making the decision to solve an assignment to ending the contract made for the assignment.
The first one is creating customer relationships which are handled with care and pro- vider focuses on quality.
• Financial competence and independence
• Quality and risk management
• Financial liability insurance
• Operating when changing service provider
• Documenting
• Knowledge, profession and resources
• Securing information and confidentiality
The second one is agreeing the commission which includes three main factors to keep in mind. These are
• The offer
• Estimating the price and determination of prices
• Contract of the accounting service
The third factor describes the commitments with the commission.
• Processing with the commission
• Clients internal processes and division of work
• Informing and communicating with clients
Fourth one considers the factors which are must to acknowledge when the commission comes to an end. The most important part is that the contract is being handled rightly as agreed all the way to the end. Tasks are continued till the end of two months’ notice pe- riod normally. The notice period is an identical secure factor for both parties, giving more time to adjust to possible changes. In addition, if the contract ends before the an- nual reports are done, the service provider should close the accounts and customer pro- vides an advance payment for the service of a closing the accounts and delivers docu- ments which are needed. The accounting company can charge the client even though they are not using its services anymore. The service provider, for example accounting office, must keep documents and information related to the commission at least for five years after the commission has ended.
TAL-STA 3
The third one of the industry standard concerns the accounting service and shows which measures the financial service provider can use in researching the service quality level.
The main concepts included in the standard is producing the accounting service and obeying by the current financial legislation concerning accounting sector. In fact, the good industry practice,’’Hyvä tilinpäätöstapa’’ which is issued by the Association of Finnish Accounting Firms is closely related to the standard.
The third standard includes five factors that are all useful. The five different factors are 1. The meaning of the industry standard and starting points
Referring the meaning and starting points of the of the industry standard and in addition, the standard is baseline for the quality measuring of the accounting ser- vice the service provider is producing and offering.
2. Providing accounting service
Service is being processed by following the rules and laws of accounting, the in- dustry standards and guidelines set by the Association of Finnish Accounting Firms, and the good industry practice. Accounting service shall be documented which means that the processes are clear to personnel and each member is fol- lowing the same ways of doing the work tasks. The service quality level can be researched by the forms and quality measurements which are made by the Asso- ciation of Finnish Accounting Firms.
The service provider shall have information needed of clients’ business, this guarantees better service quality level which benefits both parties of the contract.
The client is responsible for providing and handling over the bookkeeping mate- rials and other documents needed in the accounting service production. If the cli- ent does not provide all the information which is needed, the service provider will make an additional investigation to be able to make proper recordings to the material.
Therefore, the client and accounting service provider shall work closely to- gether. The service provider should advice customer, in addition together go over the clients’ business actions in order to find the most effective working methods, so the service can be provided in most effective way. The accounting office manager or bookkeeping agent is not responsible to follow actively the materials which are given by the client, however if there is any minor or major problems or lack of receipts, the service provider shall conduct the client.
3. Accounting and reporting
Outsourced financial management part, the service provider, will provide only the financial statements that have been agreed on. Service provider must use their knowledge and expertise by informing the customer of the needed report- ing level so that the reports and calculations meet the standard. Client is respon- sible for giving the materials and information to the service provider. Each re- port is named accurately so that it describes the content.
The provider should comment the reports to the client, if there are some things raising concern. For example, provider might advise that profitability and fi- nance should be taken as a focus points by the client in the future. The reports must show which tasks are being performed in closing accounts.
4. Annual accounts
When it comes to annual accounts, the service provider shall follow the guide- lines set in the good practice of preparation of annual accounts ‘’Hyvä
tilinpäätöstapa’’ which are set by the Association of Finnish Accounting Firms.
The financial service provider must obey by the rules and legislation concerning of the topic as well. Accounting firm must make sure that each procedure and step in preparing the annual accounts is completed. Once the financial state- ments are ready, customer and service provider should discuss together and company shall address the outcomes analytically and clearly to the customer.
5. Proposals
It is recommended that accounting professional preparing the service shall mark their company information in the balance sheet book according to the Associa- tion of Finnish Accounting Firms.
TAL-STA 4
The fourth industry standard covers payroll accounting service and sets the measures which can be used in convincing the service quality being provided. The fourth one in- cludes three factors which are the meaning and starting points of payroll service ac- counting, providing the payroll accounting service and reports for the clients.
The fourth standard is concerning the members of the association which provide the payroll accounting service to their clients. Purpose is to secure own practice by the pro- cedure, furthermore the standard does not include legislation according to the payroll accounting. However, members of the association can use the guide, which focuses on instructions of payroll accounting and payroll administration services and policies.
When providing the payroll accounting service, the provider shall follow current legisla- tion and guidance, commission agreement, good industry practice and TAL-STA indus- try standard. The service is documented correctly by using a contract form provided by the accounting company or the Association of Finnish Accounting Firms forms.
In the first hand, client is in responsibly of providing the materials to the accounting firm taking care of payroll accounting. But if something major is missing, the service
provider will contact the customer and ask for further information or materials. The con- fidentiality of the materials in the standard is extremely important, including individu- als’ personal information. Therefore, the payroll department must accept the infor- mation only from the customers named contact person. If authorities ask for payroll ac- counting information of a certain company, the right to receive must be checked and provide in written form.
The reports made for the customer are based on the information provided by the cus- tomer which is in responsibility of the rightness as well as the accounting firm. Infor- mation of the salaries and wages shall be provided immediately to the client’s agent dealing with financial reports.
2.1.2 Accounting Firm Authorization in Finland
Accounting firms seek to join the Association of Finnish Accounting Firms for two fac- tors. The first one is to get to membership and the second is authorized firm. The associ- ation has listed four factors why one’s financial management business should be author- ized. The factors are illustrated in the graph below.
PICTURE 3. The graph demonstrates the cons of an authorized accounting firm.
Authorized Accounting Company Procedures, systems and financial state is
monitored
Personnel well educated &
updated know- how
Service secured by written contract &
liability insurance Audit comittee
supervises &
sticks to problems
The graph demonstrates the factors which guarantees even better service quality since the member offices of the associations are well examined. According to the association, there are risks when a company is looking to outsource an unauthorized accounting firm to take over their financial management partly or fully. There might be some fast changes that accounting companies must adjust to. Authorized accounting firms are more aware and more safe, since they are the members of the union. The accounting firms that have been accepted to the union and have been authorized must obey and follow the rules set in the TAL-STA Industry Standards. The Industry Standards are explained more throughout in the chapter 2.1.2. (Taloushallintoliitto, 2018.)
Salo Kimmo and Pälvi described on their online article that ‘’There are many good ac- counting offices in Finland but the only commensurate quality standard is authorization.
Authorized accounting firm has been through at least two-year control period. Including the qualified professionals as well as other things, such as liability insurances and systems must be in order.’’ (translated from Finnish to English). (Myynti ja markkinointi, 2017.)
However, the process continues after being authorized and joining the association through membership. A company who is authorized must report to the union and their actions are controlled by authorities of the union.
The customers are commonly told to choose an accounting service provider which are members of the Association of Finnish Accounting and these firms are authorized. In addition, those firms are known for meeting the standards and requirements set by the industry and the quality as well as the service is maintained and continuous. The associ- ation controls the member firms and each of those have at least one KLT accountant who has passed the strict examination. The KLT accountant must have a person or another small accounting office who will substitute if needed. (Yrittäjät, 2015.)
2.2 Concepts and Theory (Working Methods and Data)
Concept used in the thesis work is to follow the process in the means of an actual project plan and other plan for reporting back to the Association of the Finnish Accounting Firms.
The plan is related to the thesis work since the commissioner is currently on the process of applying the membership and authorization. The concept works for the topic since it
researches the process stages of membership and authorization. Following the project plan and reporting plan help the company by knowing what is coming next and what has to be done to achieve the goals that have been set. In my opinion it will help the company since they have to take actions towards it and the goal all the time when the process is on- going.
Project planning is accurate research method, because the thesis work provided to the commissioner requires scheduling of the process stages, making charts and after all, the authorization and membership process progress will be easier to maintain throughout the project plan. The thesis will work as a managing tool on the way. The tasks are illustrated on the WBS, work breakdown structure down below. The plan will also include mile- stones which consist of the authorization steps and completing them.
The main source of data is the Association of the Finnish Accounting Firms and inter- views with company CEO, Jaakko Oikemus and Kati Stenman, association recruitment coordinator. I will collect data of the process steps and authorization. I will use the web- site of the Association of Finnish Accounting Firm as one of my main sources, since the authorization process goal is to be authorized accounting company by the association mentioned. The website provides a lot of information of the membership and authoriza- tion process in general but in addition, I will consult the CEO of Pluscom taloushallinto Oy about the process as well and a representative from the association for first-hand in- formation. The TAL-STA industry standard will be showcased in my thesis process. In- dustry standards are essential to the application process and those are the guidelines of good actions done by accounting companies. Industry standards include the Ethical Guidelines, Fulfilling an Assignment, Accounting Service and Payroll accounting ser- vice. These were represented more thoroughly in section 2.1.1.
2.2.1 Project Management and Planning
A project management is an essential part of the project plan. It stands for organizing, diving the tasks and deciding who is responsible, taking into account the resources, com- munication plan, progression controlling, reaching milestones, planning a project budget, and preparation and management and noticing possible risks. The tools of project man- agement are explained in the following section and how they will be used as an advantage in the thesis process. The manager of the authorization process is Jaakko Oikemus.
The project leader has a special role in this process, since he has to complete his own work tasks as well as work as a manager and control everything. Heldman described the meaning of the manager as follows ‘’One of your roles as project manager includes mo- tivating your team members and encouraging the most effective performance from your team as possible’’ (Heldman, 2018, p.230).
2.2.2 WBS – Work Breakdown Structure
The WBS, known as work breakdown structure, is a graph used in project management.
WBS includes the project goal, tasks, responsibilities, deliverables and hierarchy. (Vilen, 2015). Basically, the chart displays which are the tasks required in order to reach the ultimate project goal. It makes the project easier to plan and measure the project readiness.
For example, a project manager could list the tasks and set them in correct order. Picture of the WBS shown down below. The bottom block is supporting the upper ones; in fact, those are individual tasks. WBS is an effective tool when organizing project goal, tasks and responsibilities divided to staff members for example, in Pluscom Taloushallinto Oy’s case, who is responsible of what and who is taking care of which activity.
PICTURE 4. Pluscom taloushallinto Oy WBS of the authorization process.
Focus on the working methods (continuous) and report template for
the reports Tasks to be completed in
the process Goal is to get the membership and become an authorized accounting
office
Authorization &
membership
Accounting firm examination
Tampere office Jyväskylä office
Reporting to the association
Create a reporting template to use
2.2.3 Process Milestones
The project milestones describe the project completion critical point and phase or event which are significant to the project development. Milestones express the aims on the way, for example completing a task by due date is one of the milestone of the project.
In addition, after reaching and achieving one milestone there’s a new one to complete.
Each one of the milestones, tasks, are closer to the goal and project purpose. Milestones are effective in project management and they work as a motivating power to the people taking a part in a project.
The milestones of the authorization process are the main steps which require tasks to be done, in order to be completed. The milestones for Pluscom taloushallinto Oy in the pro- cess are completing the TAL-STA Industry Standard with each personnel member, doing the accounting firm examination in their offices and passing it and finally reporting back to the association, which is continuous after the authorization and membership process is completed.
2.2.4 RESEARCH QUESTION
The main research question is what is the membership and authorization process and how it will effect on the company. Sub-questions consider different stages of the authorization process, what are the actions of it regarding Pluscom taloushallinto Oy and results. The company wants and needs to meet certain organizational goals which are set by the com- pany leaders: following consistent working methods, qualified service production, cutting unnecessary ways of working and data protection standards and methods and other rules.
The other goals are being able to take an advantage of the authorization in marketing (company image) and networking with other members of the financial management un- ion.
3 PLUSCOM TALOUSHALLINTO OY 3.1 Current Situation of the Company
Pluscom taloushallinto Oy is an accounting firm practicing its core business in three cities in Finland. The firm has named a few development points which could be solved by the outcomes of the authorization process.
Pluscom taloushallinto Oy bought the Jyväskylä business in 2015, and still having slightly discontinuous way of acting, however one of the final result of the process is to fix the problem of having separate working methods, to having similar ways of working between the two offices. The firm is wanting to make improvement in quality of service production and continuous working ways, which is one of the focus points of the process. Further- more, the Helsinki office is included in the goal of having continuous working methods between the three offices.
Pluscom taloushallinto Oy is currently going through the authorization process. The pro- cess takes time and accounting firm must prepare for that. Usually authorization process takes up to 1 to 2 months according to the Association of Finnish Accounting Firms. The process is multidimensional and it has steps, which the company who is applying for the authorization status and membership of the association, has to follow. However, the pro- cess is not difficult but it takes time and effort to complete. The company started the process in August, 2018 and the goal is to get the information of the authorization and membership acceptation in the middle of December, 2018.
At the moment, Pluscom taloushallinto Oy, is not part of the union. Basically it means that they are not required to report of their business actions to any association, so their actions are not monitored or controlled by a third party. Furthermore, none of the industry authorities is determining whether the company is following the rules in the daily actions.
Now that the company owners have decided to apply for the membership and authoriza- tion of their accounting firm, which means that they will be controlled by the Association of Finnish Accounting Firms. Being a member of the association and becoming an au- thorized accounting office means more to the potential and existing customers than to the company itself because the client can trust that the company is actually following the rules. Of course it benefits the company, such as helping to create and build new long-
term customer relationships. Authorization is strictly supervised in Finland and the com- panies must follow the good ethics of working and other standards and rules set by the association.
In the best scenario, Pluscom taloushallinto Oy will become a member of the Association of Finnish Accounting Firms and be authorized in the winter 2018. Becoming a member, the company shall change and fix a few things but gain more in exchange after completing the process journey.
Being a member of the association brings various opportunities and benefits for Pluscom taloushallinto Oy. The company is able to relay on the association for support and advices and share information between other members. The information can be valued high, be- cause if the company was not a member and would need help from a third party, meaning a consult, it would cost a lot of money to have their opinion’s and development ideas. The members of the association are professionals of the financial management industry, with wide expertise which brings additional value to Pluscom taloushallinto Oy’s services.
In my opinion the company is applying for the membership and authorization at the per- fect time, since Pluscom taloushallinto Oy is expanding and making new customer con- tracts, and hopefully the outcome will be beneficial and help the company to reach its goals. Before expanding the business, is important to have the same business practicalities in their three offices. By having the continuous and similar ways of completing work and other possible tasks, helps the personnel to build a substitute system, for instance if a person is on an annual leave, a colleague knows how the job task is supposed complete and it is easier to familiarize a new task to work mate or even to a new worker. Highly benefiting the company in its other actions as well. The authorization process makes a good starting point for creating clear and adequate instructions for different things. Fi- nally, the process of authorization requires reporting, where having the written instruc- tions will be considerably appreciated.
In addition, belonging to known organization in Finland and working with Finnish cus- tomers and companies, Pluscom taloushallinto Oy will be able to provide more valuable service for clients.
Pluscom taloushallinto Oy decided to initialize a new ERP, enterprise resource planning system, to their business. The initialization was made on 1st of November, 2018. The ERP system which the company is now using is called Innox. There are many benefits lined to the program which are shown in the graph. The factors are to secure and control the re- sources which means having the control and knowledge of the available resources all the time. This makes managers job easier when they can control and make sure the resources are secured constantly. Reacting fast and real-time to absences of the staff members, which means that the personnel can prepare in advance for example if someone is sick or out of office for a reason. By being able to react on this kind of cases makes it easier to handle the work tasks and make sure tasks are progressing forwards.
Maintenance of the customer information is having all of the clients contact information as well as other such as private business information. The data is kept in one place where it is accessible and can be controlled and changed, for instance in the case when the com- pany’s owner changes and the information has to be updated. The main purpose is to have up to date customer information in the system. Management system is consisting of sev- eral factors which are the organizations management, management tools and planning.
The management system lets the company’s employees to see which management tools and style the company obeys by. I believe the employees can effect on the organizations management culture if they are active and want to have a change to something.
Continuous process and practices between Tampere, Helsinki and Jyväskylä. Now the working ways differ slightly between the three locations and the main goals is to have a similar working ways to complete the circle of having three offices in three cities. The action will also bring the workers together and they can share the knowledge they have easily, such as exchange ideas of processes. Customer commutations makes it possible to communicate to client groups for example by reaching them through group emails. Group emails can be information letters form Pluscom taloushallinto Oy for instance concerning the new regulations that affect the accounting or payroll accounting services which are been produced. The company can also track the customer contact times from the programs by viewing which was the last time client was contacted to. All these mentioned can be done through the ERP program which Pluscom taloushallinto Oy has taken into use. It will help the company to get the different divisions in better shape (figure 5).
PICTURE 5. Company’s goals for initialization of the new ERP system, Innox.
Innox, ERP system, was founded in Finland. It is a program designed for the professionals of the financial industry. The system itself enables the user to
• control and manage customer ships
• work task management
• teams and group works
• projects
• multi-office feature
• pricing management
• billing
• reports and monitoring of the profitability
• informing
• working time tracking
• additional other features such as training register and planning of the new work assignments.
Pluscom talouhallinto Oy will also benefit from the main features mentioned before. Each company has slightly different reasons for choosing an ERP system, but the core features are always the same. In this case, the company has set six focus areas which are prioritized in the use of the system. The ones are chosen because they are initial to the authorization
Ensuring &
controlling resources Fast and real-time
reacting to absences Maintenance of the customer information
Management system
Continuous processes
& practices between Tampere, Helsinki
and Jyväskylä
Customer communications
and membership process and the company needs to get these six factors fixed while the process is ongoing.
The milestones for having a new ERP system are current and the authorization process is one of the main reasons why the new system was chosen. It will help the company in its daily basis, for instance, quick real-time reaction to absences is highly prioritized because if a staff member is away from the office, colleagues can see the upcoming work tasks of the day. Having this information, makes it easier for the personnel to take over on some- one’s work and substitute them when needed. Another one, the customer communications is new possibility for the company since they can send email from the Innox ERP system centralized to the different client groups. (Innox, 2018.)
The usage of an ERP program has been effective for many firms previously. When all the main business factors, such as planning and controlling are managed from one platform, a company has better chances in succeeding with a project, in this case a membership application and authorization process. Each process is individual and requires different focus points but an ERP lets the company have a lower risk level when it comes to a project failure.
However, an ERP does not provide a full protection against the failure but minimizes the risk. When information is shared openly in the Innox data base the company may feel more safe but it requires that each worker is active and uses it for the purpose which the company has decided to use it for. Forward moving project benefits from the team work and the new ERP system what was adopted to Pluscom taloushallinto Oy makes practic- ing being a team player even easier. It is not complicated at all since all the main infor- mation is shared in the system and everyone can go back and look certain factors linked to the company or a project.
The ERP will be useful in the future too, not just in the authorization and membership process. The company can use it for many reasons such as tracking work tasks by worker and see the progress. Therefore, the working hours spent on one task can be calculated and cut the unnecessary ways which was one of the main goals set by Pluscom taloushal- linto Oy to the whole process.
3.2 Authorization and Membership Process
When a company wants to become a member of the Association of Finnish Accounting Firms, the accounting company must have a KLT accountant in charge. The KLT ac- countant is CEO of the company. This is one of the first requirements a firm must take into account when considering the authorization. After contacting the association, com- pany receives materials and guidelines to follow. The three main steps of the authorization process are shown in picture 6.
The membership application process to join the Association of Finnish Accounting Firms begins with contacting the association and leaving a request to get the authorization to one’s accounting company. At first the accounting company must send their latest finan- cial statement to the association, where the materials will be checked. In order to become a member of the Association of Finnish Accounting Firms, one of the first things to get done is an accounting company inspection which is held at the office requesting the mem- bership. Inspection is done at the beginning of the process and every five years during the membership and authorization. The inspection will be done at Pluscom Tampere and Jyväskylä offices individually.
PICTURE 6. Three main steps of the authorization and membership process.
After the inspection comes the Association of Finnish Accounting Firms board meeting where the membership application is being monitored and examine. The meeting is held to discuss becoming the membership office to the Association of Finnish Accounting Firms. Each company applying for the membership and authorization will get their own inspector from the union. The inspector always comes from different city. When the ex- aminer has been named, the company who is applying for the membership and authori- zation will need to contact him or her and make an appointment for the inspection.
Leave a request to start the authorization process
& send financial statements
Complete accounting firm examination at Tampere & Jyväskylä
offices
Become an authorized accoounting office &
informative reports
Accounting firm, in this case Pluscom taloushallinto Oy, will receive excel worksheet of the TAL-STA Industry Standards where they can evaluate their current situation in the different areas, which are the following
• Written self-evaluation of TAL-STA 1 Ethical premise
• TAL-STA 4 and other evaluation by giving points from 1 to 5
o Frame for the assignment and take care of customer relationship o To make an agreement of the commission and ending it
o Providing financial services
3.3 Pluscom taloushallinto Oy’s next stages of the process
The next steps of the authorization process are going through the TAL-STA Industry Standards with the personnel at the company. Discussing and undergoing the business self-assessment, to see which practices are in control and what could be done better. After this, making the changes and creating a plan to get them in the right track. The company will also fill in a self-assessment form and this will be sent to the Association of Finnish Accounting Firms, the representatives will go through the form based on the company’s answers. The accounting firm check-up will be completed in their Tampere and Jyväskylä offices and the worksheet which was prepared beforehand of the examination, will be checked by the inspector. The examination day is scheduled to be on the 16th of November in Jyväskylä and on the 28th in Tampere.
At the examination, the examiner will discuss with the staff members and ask questions of their daily practices. The core meaning of the inspection day is to make sure that the company is suitable for taking care of the commissions and follows the good industry practice. The Association of Finnish Accounting Firms has a department which organized and takes care of the accounting firm examinations in Finland. In addition, they develop the contents of the inspections regularly. The inspectors are well trained and experienced and as mentioned before, the inspector comes from a different city than where the ac- counting company is based in. Examination includes interview, staff interviews as well as supervision of the assignments taken into account the good industry practice.
Furthermore, the Association of Finnish Accounting Firms published an article where they talked about the new examination and pilot version. They have been developing a
new concept for the inspection and describes that concept includes new business areas such as
• management and strategy
• customer needs and satisfaction
• technology
• personnel
• management of the execution
Essentially, rating these are self-imposed and the association does not yet demand evalu- ating and they are not the criteria for membership. In the pilot examinations of the new concept, clients have been surprisingly active when it comes to evaluating those.
(Lahdenkauppi, 2018.)
Inspections has developed in the last couple of years and I believe that those are develop- ing to meet other needs that the customers might have in the future. The new areas cover factors and evaluating these is optional. The areas are not really covered in the TAL-STA.
First one is management and strategy which handles leadership and strategy. For example, future prospects set by the company and management plan could be part of this area.
I strongly agree the new factors are analysed by many applicants because clients might want to know what the strategy is so they can trust outsourcing to another company.
The second one is customer needs and satisfaction which is all about the client. Client shall always be satisfied and get the best possible service. If the client is not satisfied with it, they might want to change the service provider. Therefore, the customers best interest must always be kept as number one. Third one is technology that is current since the whole era is all about digitalization. The service provider should know what kind of pos- sibilities there is and how the company could take an advantage of the technology. For example, using certain programs the company might be more cost-efficient, the service is higher quality and the production is not as expensive as before. Not every company benefits from the technology though and they want to see if using it really is profitable.
The fourth one handles personnel. The personnel section is very different in each com- pany. In this case, it could mean training the staff regularly and take care of the personnel physically and mentally. If a worker is healthy, the happier he is and the better results they perform. Pluscom taloushallinto Oy might want to focus on the personnel level more
throughout and discuss with the team members if they come up with any options or solu- tions. The fifth one is management of the execution. The last new examined area focuses on leading the execution which is in every project and therefore highly prioritized. In the case of Pluscom taloushallinto Oy, this factor could mean for instance leading and fol- lowing the execution of the ongoing project. It can be applied to the membership and authorization process by following how it is executed and managed.
I think that the other factors will be more meaningful in the near future. It is not enough to have an excellent expertise of the accounting itself, but the service provider shall mas- ter other areas too. Technology and customer needs and satisfaction would be essential to Pluscom taloushallinto Oy. Technology and programs where the service is produced and client data handled are developing, and Pluscom taloushallinto Oy must keep up with these since the customers are more aware of the trends and search for alternative options and possibilities if they are not fully satisfied.
Right after the check-up day has been completed, the inspector will give report of the day to the examination board of the Finnish Accounting Firms. At this point, additional infor- mation linked to the granting authorization can be shared.
Halfway through December the Association of Finnish Accounting Firms are holding the meeting where they discuss Pluscom taloushallitnto Oy’s application. This time associa- tion will evaluate the application form and decide whether Pluscom taloushallinto Oy is suitable to become a member and be authorized. Pluscom taloushallinto Oy will receive feedback of the inspection day. The authorization is admitted at the same time with the membership. For the accounting company this is really convenient. Each authorized ac- counting firm in Finland goes through inspection once in every five years. The check-up cycle makes sure that the company is still obeying by the rules and good industry practice, if there are any changes in the company’s activities, those shall come up in the examina- tions.
3.4 Company’s Goals for the Authorization Process
The goals where illustrated briefly in chapter 1. According to the CEO Jaakko Oikemus, Pluscom taloushallinto Oy named to sets of goals for the process as the expected out- comes. The goal set by the company were consistent working methods for three offices,
qualified service production, cutting off the unnecessary work tasks and practicing by following the data protection rules, such as GDPR. Goals are great for the process since reaching those will help and make the whole authorization and membership process slightly easier to complete. The practices that currently are not perfect, can be fixed on the way. The achievable goals work as motivators when the process is on-going and the result is important (figure 7).
PICTURE 7. Goals set for the Authorization and membership process
• Consistent working methods
• Qualified service production
• Erasing unnecessary ways of working
• Obeying by the data protection rules (GDPR) and other rules considering the in- dustry
The goals are reachable for Pluscom taloushallinto Oy, but regard a lot of work from each staff member, the personnel need to work together to reach the common goals. To begin with the first goal, consistent working methods, which creates higher productivity of a worker and the job quality will become standardized and easier to reach higher quality
Consistent working methods
•Productivity of staff is higher
•Work quality standardized
Qualified service production
•Quality garantee
•Client can trust on the service
Cutting off unnecessary
work tasks
•More productivity on behalf of the staff
•Saves time, money and faster processes
Obeiying by the data protection
rules
•GDPR, General Data Protection
Regulation
levels. Having consistent methods in working place cuts off working hours, in other words, time is used more wisely and can be used in other cases, such as the work tasks which are more specific and demand more time to complete. Therefore, staff members would save working hours if the methods were consistent. The knowledge could be shared in instruction workbooks, which can be written in Word and shared in the company’s own Intra, where the instruction is available to each member whenever needed.
Goals are easier to reach when the company works together as a motivated unit. I believe this will be easy and process will flow smoothly as the members of the firm are active and want to get results. The authorization process and the ultimate goals can be reached as a team. Team work will benefit during and after the process, it is an important skill in an organization. Reaching the goal will not only benefit the company but the personnel as well.
The second goal is to guarantee qualified service production, which in Pluscom taloushal- linto Oy’s case means offering quality service and building relationship with the client, meaning trust. If the client and Pluscom taloushallinto Oy are capable in building loyal customer relationship, client is more likely to trust the service provider if the accounting service has quality and in the best scenario. Qualified service production creates more value for the service itself and furthermore, cutting off the unnecessary work tasks can
• Saves working hours per worker
• Available working hours can be used in other tasks
• Possibility to prioritize the important ones
• Avoiding hurry in the closing accounts situation
Obeying by the data protection rules in the financial management decisions and work tasks, are making sure that the service provider is showing the client confidentiality. Since 25th of May, 2018, European Union countries must have obeyed by the GDPR, General Data Protection Regulation, which is a common data protection rule. The privacy protec- tion secures higher level security for personal information and more ways and freedom to manage how the information will be processed (Tietosuoja, 2018.)
Pluscom taloushallinto Oy should document their processes for two main reasons that are GDPR and accounting and contract purposes. If needed, the company can show that it is
following the data protection rules and regulations which concern the financial industry in Finland. The materials are confidential that the company receives with the client and those must be handled with care, furthermore, the new ERP system will be very much needed when handling customer’s information.
Pluscom taloushallinto Oy prepared documents and procedures needed for the staff mem- bers and informed clients how it will affect them in May, 2018. Furthermore, customers appreciate that an accounting firm is practising by the good industry practice illustrated by the Association of the Finnish Accounting Firms. GDPR, must be taken in considera- tion when preparing reports to the customers and authorities.
In addition, reporting is a big part of the authorization process and afterwards. One of the main achievements is to be able to report the business actions according to the rules.
Considering the reporting after the company is authorized, Pluscom taloushallinto Oy would like to have a form which could be used in the reporting back to the Association of Finnish Accounting Firms. The reporting is done in certain time periods to the associ- ation, where the company shows how it is following the good industry practice in its business actions and displays the financial solidity. The member reporting is done every two years and the results and information is used in the accounting office examination.
One of the main parts of the reporting of authorized offices is the examination, which is done at least every five years. (Stenman, 2018.)
Regarding to the reporting, Pluscom taloushallinto Oy should point one staff member who will prepare the reports back to the association, this way the task is taken care of in advance and ready to be forwarded. Choosing one person to complete the task, makes it more convenient for the company itself and the person write the reports needed and if needed, interview other staff members for further information. In addition, a staff member could draw up a plan for reposting, such as an Excel workbook with the dates and check marks, whether the report has been sent to the association. Making a proper plan helps out the company with reporting.
I believe Pluscom taloushallinto Oy will not face any problems with reporting, as long they know who is responsible and what are the deadlines. Reporting is not only a manda- tory task, which comes with the authorization and membership but it is a useful tool for the company. Company can use the written reports when planning the future actions, for
instance, how they could become better service providers and what are their current focus points. Every report is unique and has different focus points, which makes the supervision of the business actions slightly difficult. Each situation is analysed and staff members shall be informed of the major changes and concentration points.
In think that authorization is more valued between the new upcoming client relationships than in the ones made before authorization and membership. It will definitely give better starting points when building new customer relationships, for instance, a new client knows by checking the associations homepage what the members represent in terms of the business practice and gives reasons why a client should pick the authorized accounting office rather than a firm which has not been authorized. In addition, I believe that SMEs, small and medium-sized enterprises outsourcing their financial management are becom- ing more and more aware of the financial industry practices and use the information that they have as an advantage when choosing the service provider.
Eventually, customer service of the accounting service provider is becoming more and more meaningful. Client respects the experience, and basically if they are not happy with the customer service that they are paying for they might change the service provider to another, who can meet their needs better. With the benefits comes more responsibility of their own service and accounting company, Pluscom taloushallinto Oy must focus on other areas too, such as building loyal and long-term customer relationships.
Characteristically, if the service provider does its best and is outstanding from the com- petition, it can extend the services they are producing for the customer. For example, if the client has outsourced payroll accounting services for Pluscom taloushallinto Oy, but the company is really satisfied with the service they are paying for, they might want to outsource for instance accounts payable or the whole bookkeeping. In this kind of situa- tions Pluscom taloushallinto Oy shall discuss with the client and advice which solution is the best for them. Each situation and problem should be solved as an individual. After all, the service producer will analyse which is profitable and what is not. The resources of both parties shall be considered in the process.
3.5 Risk management
Risk management is a crucial part of project plan; risks should be considered so that they could be minimized or eliminated in the best scenario. A good plan takes into account the possible risks that might come up on the way.
In fact, there are always risks included to the project management and planning a project.
In this case, the possible risks are lack of time, potential problems in the process, and information might be interrupted at some point. There might come up rather inconvenient conflicts with the other party, the Association of Finnish Accounting Firms, if the infor- mation does not flow correctly.
The main risk is lack of time and being able to complete all the tasks required to the membership and authorization process before the time runs out. The tasks involve the company’s whole staff, not just the project leader – everyone takes a part to the process and needs to be active.
Other risks are poor planning, for example staff members are not prepared to do extra work. At the inspection day, the personnel might be interviewed by the inspector. They might ask questions concerning the processes, such as how the payroll accounting is done at Pluscom taloushallinto Oy, how the clients private information is stored that it fulfils the data protection rules or how the materials are being handled safely. The personnel has to be as prepared as possible during the whole process. If they are not ready, sudden changes might have a negative impact on the authorization and membership process.
Of course, there is a risk of not becoming a member and becoming an authorized account- ing office. This is a risk which would require major failures for example in the basic daily practices of the company but if they were not prepared, why would they even seek au- thorization.
In my opinion if Pluscom taloushallinto Oy focuses on the right things fully, such as the process steps by taking them one by one and doing their best, there is not huge risks facing the company.
If the risks are controlled and monitored, the authorization process shall not be shaken by them. Risks must be kept in mind so things can be fixed fast if needed but the main focus
