Just when you thought you had inventory accounting under control, here comes NIFO.
Where LIFO and FIFO are at least sort of intuitive, standing for Last In First Out and First In First Out, NIFO stands for Nose In, Fingers Out.
Don’t worry, no accountancy board has adopted NIFO as any sort of standard, and none will since it’s a leadership guide to remind managers to, as Accounting Today explains, “lean in and be helpful (nose in); be a mentor, not a micromanager (fingers out).”
Wondering just what this has to do with accounting?
“NIFO is about providing guidance so a client (or member of your team) can make their own decisions about how to solve a problem or get things done,” writes Kyle Walters, author of The Personal CFO and partner at L&H CPAs and Advisors.
Addressing accounting firm managers and executives, Walters says, “Your job as a leader is to lean in and help people work through a problem without sticking your fingers all over their business.” In other words, accountants should consider themselves a member of the board of advisors for their clients.
It’s the responsibility of an advisor, Walters says, “to provide perspective and to ask the management team insightful questions to help the organization solve its own problems. You are not supposed to interfere with day-to-day operations.”
Apply the same thinking to the members of your firm and your team, he adds.
“As a leader at your firm, NIFO means helping your team members become problem solvers. You’re helping them think through problems.
“Don’t just give them the answer the way a micromanager does; make them come up with the answer.”
“This mindset,” Walters insists, “is more important than ever in today’s work-from-home era when managers are rarely in the same office as the people they supervise.”
“LIFO and FIFO can be handled by computers these days. Your new job is NIFO.”