Canada accountants suffer...


Joined
Dec 28, 2018
Messages
1
Reaction score
0
Country
ca
I've worked for quite a few companies over the past 10 years and audited even more during my 6 years at a big 4 firm. For smaller companies and startups, accounting is almost always done initially by the owner themselves or a bookkeeper and started in SAGE or Quickbooks using a template. The templates are decent, but they are always lacking just a little bit. And it always seems to me that with just a little bit of guidance, the information that could be obtained from the financial reporting system could be so much better.

Alas, accountants are always one step behind, working with inefficient manual processes of approvals and record keeping, and, without anyone really looking at the monthly results with a keen eye, take short cuts to get where they are going. I am mind blown at the number of companies that don't do cash flow statements, don't organize their financials in a way that makes sense, or even can't produce a simple, clean and intact balance sheet and statement of earnings, period.

The last company I was at almost went bankrupt, twice - the first time when they were losing sales, the second time, when they were growing really fast - all in the span of 4 years. It wasn't until I showed up, reorganized how the balance sheet and income statement accounts were grouped, actually did accrual accounting, and produced a cash flow statement, did the President finally understand where the money was being earned, where it was going and how much more was needed to support the working capital needs during growth and funding for capital purchases to support the growth.

I'm now at a company that has 30+ entities including Bare Trusts, project specific legal entities, JVs, P/S's, Trusts, and a Foundation. The org chart I received when I started was missing almost 15 entities. The company is small, but the staff all worked in silo's and didn't know what the other did and were not cross-trained. The Chart of Accounts is a mess and the support for a lot of the balances in the g/l is difficult to follow. 35 years of being understaffed and never having a designated accountant meant that a lot of record keeping is deficient or non-existent. We don't have any debt and so we don't get reviews/audits and the tax guys have allowed us to carry-on with accounting policies that don't meet any standard, as they are only concerned with the cash basis for tax purposes.

The sum of my rant is this, I don't understand why there isn't already a best practices accounting manual for bookkeepers and general accountants? The textbooks are too theoretical - what most accountants/bookkeepers need is a practical guide on how to set up a proper chart of accounts and book 90% of their normal day to day journal entries, create a simple, logical balance sheet, income statement and cash flow statement and be able to create a "history" of the company via the g/l entries and notes to the g/l entries.

My biggest weakness is not that I can't think like a CFO and think high level... it's that I can't stand having to search for information and I don't like to see my accounting staff suffer - so, I spend countless hours adjusting accounting policies, talking it through with my staff, learning the accounting software... It could be so much easier...

I'm hoping to use this forum (and any others that I might stumble upon) to ask for opinion's on best practices for recording different types of entries - best practices meaning easy to follow, helps with preparation of the f/s and notes to f/s, helps reconcile balances to tax returns, etc. I plan on staying where I am for a while and so I want to make things as efficient as possible for the future...

I would appreciate any and all thoughts!
 

kirby

VIP Member
Joined
May 12, 2011
Messages
1,467
Reaction score
203
Country
us
Terrific post! Just wanted to say that right now and will comment soon.
 

Steve-LevelUp

VIP Member
Joined
Jul 18, 2016
Messages
308
Reaction score
42
Country
ca
I have noticed similar issues in the field. Things like a standard best practice chart of accounts. How to prepare a product/class/division P&L and how to maintain the entries. I actually have a plan to try to address this (just need to commit the time to building out said best practices) and then put it out there and see how it goes.
 

kirby

VIP Member
Joined
May 12, 2011
Messages
1,467
Reaction score
203
Country
us
Regarding lack of a best practices manual: yes, why not. What actually happens is an accountant receives "real world" training - that is : training beyond the formal education- from the senior accountants at whichever firm he/she works at. Hopefully, that is good training but that's not always the case. I had a full-on CPA tell me that he had correctly adjusted a set of books. I saw entries to only one account and no entries to any other account (manual books). When I asked about this he insisted he was correct. When I said "where were the offsetting entries?" he looked confused. Clearly, his practical experience was lacking and a manual that would make accounting practical may have helped.
So I support the proposal of the original post - there is a gap between formal accounting education and accounting work experience that needs to be addressed. Historically, there has been an attitude that this is unnecessary. But as the original post cites, there is a real need.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top