This is a busy time of year. More than one-third of my regular clients have 31 March year ends.
Then there are the year-end payroll returns and the personal tax returns to think about.
With all of these activities coming together, it is revealing to see how my clients regard the various deadlines – year end in particular.
Is it a nuisance? Just a normal period end? The focus of the business year perhaps? Do they even think about it at all?
One of my March year ends sits clearly at one extreme of the spectrum. On 3 April he delivered his year-end file.
I knew everything would have been reconciled, appropriate accruals made and sundry balance sheet accounts cleared out.
The audit started on 16 April and will be over by the end of the month. Surely this is how it should be? After all, statutory reporting should take the minimum time and effort.
Obviously the needs can be minimised by the size and status of the organisation but I see little to justify a different approach.
Unfortunately another of my March year-end clients has a very different approach. Last year a copy of Sage was taken at the end of April while the live system was closed for year end.
The “audit version” was then subject to a whole series of adjustments that had to be plugged back into the live version once the numbers stopped moving. The audit took place during the summer and the accounts were finally signed off just in time for filing in January.
From this you might assume the business is disorganised and lacking focus on the numbers. Nothing could be further from the truth. The file produced for the audit is an auditor’s dream. Almost all the accounts are reconciled and fully explained.
The problem is the level of detail. Too much data, not enough information – a fault I have seen many times.
It will be quite a challenge to change the approach. From the top down the business likes detail. Contrary to my other client, there is a sense that the accounts and the systems are running the business rather than the other way round.
There are accrual and prepayment accounts for almost everything, which are laboriously posted every month. The result may be a “better” set of accounts but does the time justify the end? Is the business better understood by all the stakeholders as a result?
The answer is a resounding “no” in both cases. How can I change things? The key will be to show that there are only a few measures that really matter and that running today’s business is so much more important than worrying about yesterday’s.
I make it sound easy but I don’t expect it to be.
Going too far the other way on detail has much more severe consequences, however. That brings me to another 31 March year end.
Despite the business being relatively simple and the Sage system having been set up to make things even more straightforward, the bookkeeping is always behind. After two years of valiant effort the bookkeeper recently announced she had had enough.
One of the directors took up the baton and my initial training sessions with her were encouraging. But I still haven’t seen January accounts, let alone March. Furthermore, I know there will be things missing.
They seem to think that controlling the cash IDs is good enough – they are constantly surprised when the quarterly VAT or PAYE bills come along, which are all too obvious from the Sage system.
Variety, it is said, is the spice of life. It certainly makes my freelance existence interesting. On this occasion I wish I had more clients who see it as a challenge to see how early they can get their accounts filed.