As is the way with all things Finance there is this wacky thing known as “yearend” – it’s quite similar to “monthend” except there are more reports to prepare and shorter timelines before results are expected. I am responsible for the financial reporting and reconciliation of two of the largest units here at Potato Inc’s Toronto Offices. I will not go into great detail as to what my responsibilities are – suffice to say I am not a bookkeeper or clerk, I am an Accountant.

I have mentioned before that I have certain expectations of myself and of my work colleagues – one of them being that you actually know how to produce a financial statement. And also that you meet all expected deadline expectations.

Because of the tight turn around required for yearend and the fact that I reconcile two monster entities I was told by my manager, last Friday, that while the other accountants had to submit by 9:00am this past Monday I can submit at 4:00pm – so that she doesn’t get inundated with binders & statements. I came into the office on the weekend to complete one company so that I wouldn’t be as stressed this Monday when completing the other one. I dutifully submitted everything by the expected deadline – all immaculately reconciled with no queries from senior management, as I am a stickler for providing lots of back-up with regards to my journal entries and reconciling issues.

Twit submitted at noon, Monica at noon had still not submitted.

My manager had some very harsh words for my colleagues – why can Bean submit her binders & statements at the required time and you all cannot? She came in on the weekend as the expectation of Senior Accountants is that you meet deadlines and this deadline was not a surprise, obviously you are not capable of time management.

There are moments when I really like my manager.

Ontario switched over to HST approximately at the same time that BC did, in mid 2010. There were calls in Ontario to repeal it, mostly because it has been applied, except for a small number of exceptions, to virtually all goods & services sold/offered in Ontario. This includes costs for home heating, which irks a lot of people as the provincial portion (PST) was never part of the cost, only the Federal (GST). So instead of paying 5% in tax you pay 13%. To help ease the transition the Federal Government made multi-billion dollar payments to the provinces (Ontario & BC) to setup the new systems, transition auditors from the provincial Ministry of Revenue to the federal Canada Revenue Agency, as well as make transitional payments to citizens to ease them onto the new tax system.

Ontario has not gone back. There has been grumbling back when it was being discussed and there are still some grumbles, but for the most part it is here to stay. Am I delighted with it?  Yes and no. Yes, because it makes my job sooooo much easier when I have to prepare my monthly remittances which used to take me 2 days and takes just a couple hours now. As well, with regards to the billing & payables functions it is so much easier as well (I’ll blog later about how PST is painful for companies). I hate it cos some of my costs have gone up, yes, but not in any seriously significant fashion. And I am well aware of the legislation that was put in place and what the financial ramifications are for Ontario if we back out of the HST — billions needing to be paid back to the Federal Government.

Now in British Columbia there is a different story. BCers hated the HST so much there was a push for a referendum. The NO side won and now BC is working on dismantling the HST in that province. Here is the FAQ offered to people in BC who were wondering about how to repeal the HST. What the FAQ doesn’t tell you, and I wonder if this was brought up during the referendum campaigning, is that BC has to repay the funds given it by the Federal Government for the HST transition. I recently saw an article in Maclean’s that the BC Premier, Christy Clark has asked for a credit for “time served” as BC will be with the HST until about mid 2013 before it is completely dismantled in the province.

Was it communicated to BC residents that there is a price to be paid to reverse the HST? I don’t see it in the FAQ provided by the “No to HST Campaign”.

There are costs in trying to revert back to BC PST – rehiring of auditors/staff in the Ministry of Finance, repaying the Federal Government, businesses having to shell out $$ again to reprogramme their accounting systems & POS (point of sale) systems.

For myself I am a Certified General Accountant. I worked damn hard to get this designation and there is no way in hell that I am jeapordising it. Which means I dutifully meet the requirements by achieving my yearly quota of CPDS = continuing professional development. Today it was “Introduction of MS Access 2007″.

It was an okay seminar, just long, the whole day. It was fun learning about the programme and how flexible it is. But at the end of the seminar our presenter said something which made me think – good god, why we learning about this programme as accountants? Why this question? Because there is no security in Access 2007 – there is no way of limiting the end-users’ ability to f*ck with the database tables.

Ever since Accountants got creative with Enron & Worldcom there have been some fairly strict controls put in place – everyone’s favourite being Sarbannes-Oxley (SOx). This means we have controls coming out of every single orifice you can think of, and then some. There is no way in hell that a Finance Department would use MS Access 2007 if the security & access controls are lacking – it would put into question the integrity of the entire database. So again, why the hell am I attending a seminar on something that I won’t be able to use in the office setting?

+++++

In general my CPDs this year were hit & miss with regards to what I “learnt”. The session on tax planning for immigrants was quite informative and made me think of ways a current resident of Canada can look into their own tax planning. The session of SAGE Business Vision was a bit sh*t. But that is because I have only ever worked in large multi-national companies, and a programme like Business Vision is too small & limited for what I do day to day. But for a small business it appears to be adequate – just wish the presenters were a bit more current on the state of Sales Tax (VAT) in Canada.

What does 2012 hold for me with regards to CPDs? I have already signed up to do the Tax Law course to gain my ACCA. This means 15 CPDs for me, with needing just another 5 which can be done with a couple online seminars. Huzzah!

Some of the activities have been a karoake night (I sing in the shower, not in public), beer & wine sales on Friday afternoons (I don’t drink), getting .04% of my pay deducted to go to the United Way and I win cos I get a day off for free (I did the math, I’d be donating exactly one day’s salary, so it’s not free). And like I said, charity drives are all fine and good, but I take serious issue with peeps trying to guilt me into donating. One such creature was Monica, that illuminating light of accountantcy that resides in my department.

Obviously Monica had to shift her entire schedule about to assist in this charity drive. Please take note of my sarcasm here. The wench barely works, and when she does the quality is fairly lacklustre. Monica tried to cajole me into forking over my cash, with the refrain of “oh come on, you don’t want to be a scrooge do you?”.  My eyebrow shot up, and I rather tersely said I do not appreciate pressure tactics.

And once this charity drive is over (which mercifully will be by next Monday) there will be the preparation of care packages for unfortunately families during Christmas. Last year I was given the option of hunting through dollar shops or just fork over $20.00. I handed over the cash. I won’t be doing either.

It’s not that I am not charitable, or that I hold onto my pennies with a tight grasp. I just prefer to donate to causes that are near & dear to me. As can be attested by my blog posts I have medical issues. So whenever I donate it tends to be to health related charities, like The Kidney Foundation, or a hospital. I also donated to the Canadian Opera Company this year – cos I think art is important and should be affordable. I also donated to the Toronto Symphony Orchestra, for the same reason.

Why my reticence over The United Way? Their administrative costs eat too much of the donor dollars, I like seeing a greater proportion of my donated dollars going to the intended programmes, and not to items such as fundraising advisors.

Just this past weekend I took part with my Rotary Club in helping to spruce up a women’s crisis shelter’s yard & garage. I enjoyed it, I was doing something I believed in, and there was excellent fellowship. And that’s what is at the root of my disenchantment with the charity drives here at work, I need to believe in something before I hand over my money. And I don’t believe in my fellow co-workers’ tactics, nor in the way the UW functions.

I had applied to a position that was posted on a job board about a month ago. I sent in my resume along with a cover letter explaining how I could make an excellent addition to their organisation. It has been a month so I figured they just tossed my resume aside, and I haven’t looked back.

Yesterday I got a rather terse telephone call from this employer saying that I have been scheduled to come tomorrow (Wednesday) for 1pm to do a MS Word & MS Excel technical test, to see how strong I am in Microsoft Office. There was no opportunity to discuss how long this testing would be, and if it were possible to schedule it at a time that would not conflict with my current work commitments.

Plus, it pisses me off that they have this requirement for a technical test. For fuck’s sake! I am a designated accountant, my resume (CV) indicates 12+ years of accounting experience in various industries and in various positions. Other than the accounting system the second most used tool of most Financial Accountants is Excel. We know how to use the goddam programme, if we didn’t we wouldn’t be able to do our jobs.

I emailed their HR and asked if it were possible to reschedule as I could not take time off in the middle of the workday. They suggested 9m. Again, I would be 2hrs late for work if I did that. I suggested this coming Friday, as I have the day off from work, and therefore there would not be any conflict. That is not possible, only tomorrow is scheduled for testing.

Maybe because it is a governmental agency their HR Department has this driving need to justify their existence by forcing these stupid tests on candidates.  Last time I did a test like that was when I was applying for a junior position at Sears Canada. It was an equally stupid test, which could easily be discerned once I met my fellow new-hires .. not a one could do a journal entry, but darn it! they passed the stupid test.

Am I heartbroken that I am not interviewing with this entity? Not really, no. Other than the renumeration issue I like where I work and I am not willing to jeapordise a current job for possibly becoming a candidate for another job.

So my dear readers, if you work in HR, please pay attention – you need to work with the candidates, not dictate to them, if you want the best candidates. There is a reason why we are employed, we have skills that make us valuable to our current employers.

For those who are not of a financial persuasion in most companies atleast quarterly you would reconcile the Fixed Asset subledger to the Balance Sheet. This is a control to ensure that what we are reporting as Fixed Assets is accurate and we haven’t missed anything. In most accounting systems the subledger rolls directly into the Balance Sheet so that the reconciliation serves the purpose of just testing the system. But in our case we have a complete separate Fixed Asset system where we track the assets via barcode. So our reconciliation serves the purpose of ensuring that transactions in both systems match each other.

Mine rarely does and that is to be expected. As my two units have the lion’s share of the assets and IT keeps going into the inventory system it stands to reason that I will be out of balance. But a reconciliation does not mean that you fail it if you do not match, the purpose is to show why you do not match. I can explain my variances, and therefore I always get management sign-off on my reconciliations.

Twit, who has been with Potato Inc for over 20 years and has some of the easiest reconciliations ever is having problems. Management refuses to sign off on Fixed Asset Reconciliation, because she cannot explain a variance of $400.00. So yesterday afternoon it was her typical plaintive cry of “BEEEEAAAANNNIIIEEEEEE I need you”.

She’s under this mistaken impression her mismatch is due to her assets not being loaded correctly from the prior accounting system into our new one – SAP. I told  her that was bullshit and she needs to prove it. She was ready to just pass the reconciliation to the SAP IT Finance Team to figure it out for her. I told her that was complete bullshit, yet again, as it is wrong to expect someone else to do her job.

I showed her how I do my reconciliations and then told her to leave me alone until she has a useful comment or question. How to do a reconciliation after you have been a Senior Accountant for atleast 10 years is a stupid question to ask, and just shows her ineptitude. This is the same one with the sprog who thinks it unfair that she cannot take time off whenever so she can spend time with her ankle biter.

The latest with Twit is that we get a week off during Christmas – it’s a perk, not a right, and it’s a lovely perk which I know I am taking advantage of. But because of the way the school year is this year her kid is off the first week of January. Twit actually asked for that week off so she doesn’t have to put her 8yr old in daycare. Manager looked stunned and reminded her that first week of January is our busiest as we are preparing our yearend close & schedules, and no self-respecting accountant (short of death or fatal illness) can expect to have that week off because they have child-care issues.

I hope today is a quiet day.

So last night I attended a seminar on Sage Business Vision. The presentation itself was good, they explained how the software works, how it can easily integrate in to an office environment so that it is more than just an accounting system – but also a way to keep track of sales contacts, track potential business opportunities and so forth. I didn’t like the software itself, as I saw flaws in it.

I didn’t like that the system forces a particular inventory valuation method on the user. There are several types of inventory valuation methods and it really is up to the entity/company to determine what is the best valuation method to meet their reporting needs. Weighted-average cost is a very excellent method, but not suitable for everyone. And I thought there were some weaknesses with regards to setting up access levels. But I guess that since SAGE BV seems to be aimed towards smaller companies, it is suitable for those purposes.

What did stun me, last night, was the lack of knowledge from my fellow accountants about RITCs – Restricted Input Tax Credits. When I asked the presenters if BV is capable of assisting in the calculation of RITCs I got blank stares from most of the people in the room – the presenter and the audience. I was asked to explain what that is. One of the presenters is a CGA (Certified General Accountant) so I was shocked that he didn’t know, as part of his business is helping other companies with their bookkeeping and preparing, if necessary, yearend working papers for Financial Statement preparation.

Back in July 2010 Ontario shifted from Provincial Sales Tax + Federal Sales Tax to a single tax – HST (Harmonised Sales Tax) which is basically the same rate of VAT, but instead of filing with two separate tax authorities the payments go to one authority. I’m not about to go into how to file HST/VAT but for any entity that has revenues (not profit, revenues or as some call it Gross Margin) of $10M or more per year are subject to RITC, which means a part of the HST has to be recaptured (the provincial portion) and increase the payment to the federal authorities. RITCs are subject to car rentals, hydro, telephone/cellphones, meals & entertainment.

My fellow accountants looked stunned when I explained that. I thought “what the f*ck! how the hell can you be a fully functioning member of an organisation and not know the implications of changes to sales tax”. But I remind myself that many of them work for very small companies and therefore it does not really impact them. But really, why the hell they cannot keep up to date on issues such as this.

Even the presenter did not seem to be aware that as of January of this year Canadian GAAP (generally accepted accounting principles) follows IFRS (International Financial Reporting Standards).

If we are f*cking expected to keep up our skills by doing these stupid CPDs why the hell don’t the accountants look at seminars/courses that actually impact their jobs – and not some shit on the latest in barcode technology (which I did last year as a CPD).

Companies do not have control over the rate of Corporate Income Tax. This is set by the Federal Government, in conjunction with whatever Province the Company resides in. In the case of Ontario the Corporate Tax Rate is 28.5% but will be reducing shortly. Companies do not have control over this, and therefore the reduction in income due to having to pay Corporate Income Tax should not be a reflection on a Corporation’s ability to run a profitable business.

There are other items which I reflect in my example below. Let us pretend that it is a multinational mining company. On the line “Equity Income” this would be the income earned by way of owning a proportion of another corporation. In this case the company (let us pretend we are Co.A) has no control (i.e., less than 50% ownership) over Co.B. It just recognizes a portion of the income of Co.B as part of Co.A’s financial statements. The details would be spelled out in the Disclosure Notes, which always accompany external Financial Statements. As Co.A has no controlling interest in Co.B again, this number is not a reflection on how well Co.A is turning a profit based on its operating activities.

Now as Co.A is a multinational mining company there are situations in which I needs to write-off items such as an entire mine (which would have been an asset on the Balance Sheet) due to “Acts of God” – i.e., mountain collapsing or whatnot. In situations such as that Co.A again has no control over the mine needing to be shutdown and thereby no longer being a viable long-term asset. As this would be something completely out of Co.A’s control (Act of God) it would be an extraordinary event.

So to the average person it looks like the year 2008 was the most profitable and it would be assumed that the management was doing a very good job compared to prior years. And the question would why did income drop from $94.75 to $38.25 in the following year. But if you look at Operating Income you’ll note that actually 2008 had a drop in Revenue, and increased Staff Costs – which could be due to paying severances or whatnot – which would be disclosed in the Disclosure Notes. And though 2007 appears to have the least amount of income, it actually out-performed 2008.

So when looking at a set of Financial Statements one should not look at the last number. Look at all the numbers, and take note of items such as any drops in billings, increases in Expenses, and why these numbers changed. And if there are constant write-offs occurring then that is a sign that either the company is making poor investment choices or it is a reflection on the type of industry the company is involved in. As Co.A is in mining it is to be expected that there will be a certain level of uncertainty with regards to its mines, labour relations and so forth.

Financial Statements are not just the P&L (Income Statement) and the Balance Sheet. You need to look at all the component parts, which are:

• Balance Sheet
• Income Statement
• Cash Flow Statement
• Disclosure Notes

The Cash Flow Statement will let you know how well the company is performing with regards to generating cash flow. If it is asset rich and cash poor, that is something to consider. The Balance Sheet, you can look at the level of liquidity – how able is it to pay off its immediate debts (accounts payable). What is the level of investment in assets, the level of equity and so forth.

The disclosure notes will tell you what accounting policies a company is using. It will indicate what its long-term debt obligations are, if there are any hybrid securities, and if it has unionized labour, what is its pension funding obligations and how much it may still owe to the pension fund.

Using Financial Ratios are more then a good idea, they are essential when looking at a set of Financials to determine if the company would make a good investment for a potential stockholder or bondholder.

In many countless posts I have stated how lacking in Accounting knowledge my colleagues are. And it continues.

Twat, our A/R Clerk, has this mistaken concept she calls “cash on account” — there is no such fucking concept as Cash on Account in Accounting. When a client/customer overpays you it is not to be treated like a reduction in Accounts Receivable — it’s a fucking liability, known as “unearned revenue”. Twat applied an overpayment that was meant for another profit centre to one of mine, thereby reducing my AR. Twat’s only comment was that as my profit centre is the controlling unit she applied it there and asked if that were a problem. I told her rather tersely that yes it was a problem, and yes we’ve had this conversation before. As I have the ability to do correcting entries into the subledgers I would have appreciated a head’s up so I could fix this for financial reporting purposes. I told her this violates all accounting principles as my financial statements are erroneous.

This is what happens when you have idiots who started working as Accounts Payable Clerks straight out of university, who have no formal training in Accounting, performing financial transactions which impact the Financial Statements. Twit, who is a Senior Accountant is one such other person. Every month it’s the same refrain – Beaaannnnieeeee help me! I can’t get my Balance Sheet to balance.

Kill me now.

I placed an order for a few items of clothing from HolyClothing, an online store that sells clothes to women interested in a bit of a reniessance flair. I thought I would give E-Bay a shot and see how it goes.

I got a rather nasty email from HolyClothing saying that they will cancel my order forthwith unless I sent payment immediately. As I had used paypal and my paypal account showed that payment would be clearing this Monday, November 7 and I had the unique transaction number this would be enough to forestall the cancellation. I provided a screenshot of the payment confirmation to HolyClothing and I got a terse email saying that they will wait.

This morning I got an email from HolyClothing that they have opened up a non-payment file against me with E-Bay and that I will forthwith no longer be allowed to purchase their items in the E-Bay Store. This pissed me off to no end.

Hell hath no fury as an anal-retentive accountant who documents everything. Needless to say I got E-Bay to reverse this non-payment file against me and I have a file open against HolyClothing instead, for harrassment.

Needless to say, after this transaction goes through I will no longer deal with such a vendor again.