Income Taxes, Bureaucracy, Policies and Procedures

Having just finished my personal tax return, I am reminded why Income Tax Preparation and Planning are services I have never had an interest in providing. There are two reasons why:

  1. My belief is that this service is specialized and should be handled by someone who makes it their specialty
  2. I also believe the U. S. Tax Code is absurdly bloated and complicated, causes countless wasted hours to comply with, and in the end is non-productive

Increasing Complexity

Like the U.S. Tax Code, over the years companies have a tendency to add layers of bureaucracy and increasingly complex procedures. If you own a company or have worked somewhere for an extended period, stop for a moment and look back to what the company was like when you first started. Chances are things were a lot simpler and perhaps more efficient.

Bureaucracy, Bureaucracy, Bureaucracy

We will never totally do away with bureaucracy – certainly not in government and only with limited success in private industry. But, if you are in management for a private enterprise, examine just how you are structured. Are there areas you can consolidate, such as merging two departments? I once made the suggestion that a company merge customer service and invoicing. The reasons were varied, but the result was less billing errors, significant cost savings, and most importantly, enhanced customer satisfaction. It may be that your structure is appropriate, but the likelihood is high that over time you will experience bureaucratic creep. This sets up a terrible possibility that people begin to become focused on turf wars. You can see that sometimes by the policies and procedures that are implemented to build a fence around their domain.

Take a Look at Your Policies and Procedures

Again, if you have been in business for much time, there is high probability that you are now operating under a set of rules (policies and procedures) that are making your operations inefficient and wasteful. I encourage you to occasionally take a close look at policies and procedures to identify ones that are no longer needed, in serious need of updating, or even creating more problems than they solve or prevent. It might be as simple as record keeping. You may still have in place policies and procedures for record keeping based on hard copies of everything. Perhaps, with current digital record keeping capabilities, this is no longer the best method. Another could be in the area of new hires and promotions. Is it still standard procedure for the company president or CEO to interview and sign off on all new hires or promotions? If so, is that still necessary or really more of a tradition that waste time?

Keep It as Simple as Possible

The bottom line is, when it comes to your company’s bureaucracy and policies and procedures, simple is generally the best approach. That of course does not mean inadequate. Your level of detail and complexity should be adequate for the situations you face, but take time to question everything more.

When was the last time you reviewed your company’s bureaucracy and policies and procedures so that you don’t operate with the confusion of the U. S. Tax Code?

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.


4 Responses to “Income Taxes, Bureaucracy, Policies and Procedures”

Leave a Reply

Enter your email address:

Delivered by FeedBurner