Free yourself and minimize duplication.

I am slightly embarrassed to say that I studied 5 investment statements of a new client for over 6 hours.  Before the 2nd hour was up I called Smith Barney to make sure I was reading them correctly.  I was also trying to understand the value of hours spent rekeying statement data into a spreadsheet.

Point is prior monthly investment earning excel schedules were neat but merely duplicated what was on the printed statements.  Plus why are all the individual holdings assigned a GL account number?  What I learned is before excel is popped open or the chart of accounts is expanded, ask a few questions.

• What am I required to record?  Focus on the end state:  GAAP or soon to be IFRS, tax returns, 990’s, 5500’s, audit, funding source compliance reporting, financial and operations reporting and governance.
• Is the information required right here on this document from an independent source? If yes, please do not rekey it to look neat.  Use the tick & tie audit methodology to support the journal entry.

Many clients fall into the same trap.  Excel dependency due to training issues, poorly utilized or miss understood accounting systems and lack of time to study the situation.  In this case interest, dividends, realized gains/losses; unrealized gain/loss and advisory fees for the period (month) was provided in the statements. As well as total purchases and sales.

I kept thinking there was a reason for spending hours each month rekeying data and tracking individual holdings in the GL.  Guess what.  I never discovered the reason and we are 5 months behind.

The 1st month I followed my predecessor’s process.  It took me 3 hours to update the excel schedule and 1 hour to post the journal entry. Not good.  The 2^nd month I ticked/tied and posted a journal directly from the statements. I consolidated the individual GL holding accounts into one and finished in an hour.  Sure there is more to do, but at least next month will be more effective. cathyg