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Oh the fun never stops here in “Accounting for the Clueless” Department.

We have started the monthend process today. One of my ME tasks is to run a posting – which posts all transactions in the GL from the subledgers (A/P, A/R, Cash Receipts, Fixed Assets, WIP). Scintillating stuff, that, but necessary. One of our Revenue Managers rang me and asked what a “Trial Balance” is. Dear Lord!

For the uninitiated a Trial Balance is a simple listing of all General Ledger Accounts with their ending balances at any given time. As Accrual Accounting uses the “double entry system” that means all Debits (DR) and Credits (CR) must net out to zero. How does one know that their reporting system is working well? Run the T/B and if it nets to zero you should be okay… if it doesn’t net to zero there’s a JE out of balance and in error.

Anywho, back to the Revenue Manager. He ran a WIP Report from the subledger and was asking why it did not balance to the Trial Balance. Hmmm I asked him when he ran his reports. Surprise, he ran them before I did my posting, so of course the T/B would  not have been updated with all the transactions in WIP.

Sometimes I worry. But most of the time I don’t, as thankfully my manager oversees the entire department and catches these little quirks.

On a bright note – my assistant is beginning to think for herself and actually try to understand processes. There’s a ways to go, but she is now “taking ownership” of her work (snazzy HR phrase, I know).

And for my co-worker who last month couldn’t understand why Fixed Assets don’t go into the P&L- turns out the wench doesn’t reconcile her Fixed Assets Subledger to the G/L. This is an important reconciliation as Fixed Assets are a favourite target of any self-respecting auditor – be they external, internal, SOx or the CRA (Canada Revenue Agency). And as we are converting to a new accounting system it is important to make sure the reconciliations are spotless/clean prior to the conversion. I informed her of this and her response? “I don’t know how to do the rec”… yet again onto the breach dear mushrooms… I must show her how to do the reconciliation.

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