Future Accounting

Future City by Sam Howzit
Future City by Sam Howzit

Charities often run on a shoestring.  Even if the charity is well funded, they want to focus as many resources on delivering programs as they can.  The person doing the bookkeeping often wears multiple hats in administration, reception, taking minutes and assisting the Executive Director.  In addition, the accounting system is often ancient, with minimal training being given to the staff.

As accountants we tend to focus on accuracy, which is extremely important, but we should remember that simplifying procedures leads to greater accuracy.  When people understand their system, and when they don’t have to rely on memory, they produce more consistent, more reliable results.

Here is one small tip:  when possible, record the whole transaction while it’s still fresh in your mind.  For example, insurance tends to get billed for a whole year in advance.  Standard accounting practice is to set aside the payment and record 1/12th of it as an expense every month.  Sometimes a separate spreadsheet is maintained to track these monthly entries.  Sometimes the system allows for a repeating entry which can be posted every month.  An alternative that I don’t see in practice is going ahead and posting all of the entries for the current year.

All of the financial report writers allow you to report as of a past date.  Systems routinely allow you to ignore future transactions, so why not take advantage of that and get the whole transaction off your to-do list at once?

1 Comment on “Future Accounting

  1. It is an excellent idea, and I do know some people who did it this way. However, the problem is, like you say, the fact they often have to don too many hats. If one doesn’t manage time and work well, things can go really wrong!

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