Six Steps for Tackling Accounting Nightmares

Are you overwhelmed with the thought of getting your accounting mess in order? Whether you are new to your current organization and inherited a real mess, or if because of outside forces the books have gotten farther and farther behind, or balance discrepancies have just gotten bigger than you know how to fix, I have a few hints that might help.

1. Pick the most pressing important task and focus on that alone. Sometimes I have even resorted to writing a statement on a cheat card for myself to keep from getting sidetracked.
2. Use the Swiss cheese approach. You do not have to complete the entire task in one sitting. If Accounts Receivable is too large to tackle, start with cash and the bank reconciliation. If your bank balance is correct, that is half of the A/R activity so it narrows down your places to look for errors. Also, as you correct errors in one area it can give you hints as to the errors in other accounts.
3. Keep the big picture in mind. Don’t spend hours looking for $10, when the discrepancy is in the tens of thousands. Once you are current and are looking at only one month, then you focus on fixing the small errors in your process so you balance to the penny.
4. Learn from your mistakes. You have taken all this time to discover and fix the problem. Change the way things are done so you do not have to repeat this joyous task.
5. Call for help if you need it. So many times I have answered my own question in the process of explaining it to one of my associates. While explaining the problem clearly enough for someone else to understand, you will often hear the answer. If not, then by explaining it to someone who understands accounting, they can often see where the logic is wrong.
6. And finally – KISS – Keep It Simple! Accounting is not rocket science. Money comes in, money goes out. Debits have to equal Credits. The Balance Sheet must balance.

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