The Accounts Are Always Right- Or Are They?

“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?

About Michael Carr

Specialising in Strategy, Systems and Organisational Design I've had a varied and rewarding career and been fortunate to work for some superb companies such as Courtaulds, Unipart International, Akzo Nobel and more recently Jaguar Landrover, all luminaries of a solid, disciplined and a conservative, though never lacking in innovation, approach to business management and development. Augmenting my career with studying for my MBA at Warwick in the early 90's has given me a balanced and I believe rich resource set to draw upon in my Consultancy Practice. My Clients have been good to me, tolerating my idiosyncrasies, giving me enough rope to go along the journey that I was taking them and hopefully in return I've been able to repay them by raising the bar and their business performance, giving them the results and achievements they were looking for. I really enjoy my work and love the challenge - isn't that what it's all about?
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