“We built a lot of this” – The CEO was clearly proud when he surveyed the Malaysian skyline but alas his pride was to come shattering down a few minutes later when his Projects Director was to walk in for the pre-arranged meeting.

The story was related to me by a former colleague when they were implementing a new accounting system. The challenges were all there, multi phase projects, multi currency triangulation to implement, a local workforce, UK-based architects and a smattering of languages to bind it all together.

The meeting that was to be held was to discuss the layout of some of the project reports; all of the other challenges had been overcome and now it was on the final furlong before sign off.

“This figure here”, explained my colleague and outlining a column total, “are the total project hours for the phase multiplied by hours accumulated at cost”

“No” interjected the CEO “accumulated hours are always at invoice value that’s how I report it”

“But I have always reported WIP at cost” said the Projects Director

There was an awkward silence as the impact of what was being said hit home; diplomatically, my colleague decided to leave the room.

Do you know what goes into your accounts?