'Tis the Season for Distractions and Accounting Mistakes
Accountants are no different than anyone else at the company during holiday time. We get swept up in heartwarming nostalgia when we hear holiday music, smell and taste delicious baked goods, and are invited to extend our lunch hours or leave the office early to get our shopping done before the crowds.
Like everyone else at the company, this is the time of year we welcome office parties, cookie and cake tastings, year-end award ceremonies and fun secret Santa exchanges. These are all well-deserved distractions and often offset the pressures and stress that we also bump into holiday season.
But because these distractions are happening continuously during year-end, creating a laissez faire atmosphere, they set up our accounting teams for failure if we lose focus and inadvertently make mistakes. The only way to make sure this doesn't happen is to be proactive. Below are the three ways to ward off mistakes and keep your accounting career moving forward:
1. Pay attention to reviewer comments. Most of the time accountants perform well on their initial work product. The reviewer comments are minor but require attention and adjustment (change headers, add new tables, re-arrange data, etc.). Unfortunately, during the holidays, preparers tend to rush and only correct what they consider to be the most important. This usually results in having the document returned again with more comments. Even worse, because reviewers tend to have emotional connections with their comments, they are likely to be upset you didn't respond to all their suggestions. So what started as an accounting problem can turn into an HR and PR problem with the potential to create a tear in the trust between the manager and employee. The good news is that both of these situations can be avoided. Do the work completely the first time by reading the comments and making all adjustments so you send it back in full and can enjoy the season!
2. Stay vigilant when utilizing spreadsheets created by others. The holiday season creates planned and unplanned absences by managers, employees and co-workers, from time-off for picking up relatives at the airport, offsite holiday meet and greets with company associates and vendors, and unexpected morning delays for reshuffled car pools and a multitude of other reasons, mostly happy ones. This often results in accounting musical chairs with co-workers needing to take over someone else's work in the middle of their work. When this happens, chaos and disruptions can erupt with unnecessary changes in production, delivery schedules and even some asset re-allocation. The cure here is prevention, so be on guard.
The most common mistakes are made by accountants plucking data out of a spreadsheet created by someone else. This can carry sneaky risks, such as misleading labels and headers, the month-to-date number being updated but the year-to-date total not being refreshed, and some formulas becoming incorrect, causing a portion of the numbers to be erroneous. Accountants must not only focus when preparing or reviewing spreadsheets, but also focus when plucking data out of spreadsheets created by others.
3. The perils of spot checking. You might be singing along to the sounds of the season, but your work needs to never be naughty and always nice. Stay focused. Give yourself enough time to do the work. Don't spot check when a more detailed review is the better choice. So when is it OK to spot check? The answer is "it depends on the situation." But with the holiday atmosphere throughout the office, you are positioned for potential errors, so don't create more! There should be an assumption that comprehensive detail reviewing always takes precedence over spot checking especially when the time factor between a "comprehensive review" and "spot checking" is often only 5 to 10 more minutes, but the uncaught errors can create hours upon hours of damage control. While the mistake might get corrected, your perceived value in the department may drop a notch. That is certainly not the holiday gift you want for yourself. Remain focused, take your time and merry and happy everything!
Joseph D. Rotman, CPA, MBA, is author of The Industry Accountant's Intelligence Briefing: Helpful Hints from the Trenches, a compilation and analysis of the most common accounting and spreadsheet mistakes and how they can be avoided, available on Amazon at http://amzn.to/1Kdli6g.