The only two certainties...

Benjamin Franklin famously observed that the only certainties in life are death and taxes.

In technology, the two certainties are change and bugs.

In politics, promises and broken promises.

In project management, delays and scope creep.

In marketing, everyone has an opinion and nobody agrees.

And in accountancy?

• Clients will want to pay less tax and lower fees.
• Clients will leave things until the last minute and then expect you to perform miracles.
• New tech will promise to save you time and some client will still send you a shoebox or carrier bag full of receipts.
• Your busiest clients will think they're your easiest and your least profitable clients will think they're your most valuable.

True? 

Not so daft questions from junior accounting staff

1 - A trainee was compiling accounts for a sole trader who used to supply Bank Statements with notes written beside each transaction. 

The trainee asked his boss what the client did. The answer was: a motor mechanic. 

The trainee then asked 'So why does he buy so many Drawings'?

2 - An overseas based outsourcer was working on a pub client. They could see fruit machine income beinbg credited, and asked why there was no corresponding purchases of fruit on the expenditure side. 

Cynical accounting definitions

Accounting standards

A collection of rules designed to restrict the imagination of accountants. Necessary because when no rules are in place, accountants go wild in their attempts to be reasonable. 

Annual report

A compulsory document prepared annually by accountants to describe the brilliant work of top management throughout the year. 

Assets

Items listed on a balance sheet, previously on the left, now at the beginning. Some are current, others non-current. 

Estimated useful life

The number of years of service of an asset as estimated by accountant, always significantly lower than the real useful life of the asset. 

Goodwill

Excess paid above the true value when one business entity purchases another, which accountants consider an asset, even though it represents poor negotiating skills. 

Risk statements

Padding at the beginning of an annual report to make it boring to read, and to discourage readers from reaching the financial statements. 

All credit for these goes to Grant Tait who lists them at the start of his 2024 book "Fun with accountants"

5 new accounting related acronyms you'll never use

ACCOUNTS – Always Chasing Clients, Often Underpaid, Never Taking Sabbaticals 

RECAP – Routinely Explaining Concepts Again Patiently

RECEIPTS – Random Envelopes Containing Evidence In Perpetual Tattered Shape

TARDIS – Time Allocation Rarely Delivers Income Sadly (How it feels quoting fixed fees for 'quick' jobs.)

P&L – Panic & Last-minute (The only true accounting method for sole traders at year-end.)

A good deal?

 A friend proudly told me that he no longer needed his accountant as he'd decided to go the DIY route.

I'd previously said I couldn't help as it's a long time since I gave anyone tax advice. 

"No problems" he replied. I've bought a couple of books that I'm sure will tell me all I need to know. 

"I'm pleased for you" I said, having long since given up on getting him to appreciate the advice he would get from a decent accountant - rather than the cheapest one he could find each year.

"What books are they?" I asked.

"One is 'Accounting for Dummies', the other one is 'Tax saving strategies for consultants'. They were reduced to £8 each or two for £19".

Says it all really!

A dozen laws of accountancy that weren't covered in your studies

1. Trial balances don’t. (Not always, anyway)
2. Working capital does not. (Work, that is)
3. Liquidity tends to run out. (Faster than you think)
4. The bottom line is only the tip of the iceberg. (What lies beneath matters more)
5. Depreciation is inevitable. (For assets and accountants)
6. Forecasts are mostly fiction. (But we make them anyway)
7. Profit is an opinion, cash is a fact. (Ask any struggling business)
8.        The auditor is always right. (Especially when they say you're wrong)
9.        A budget is a wild guess wrapped in spreadsheets
10.        There is nothing more permanent than a temporary account
11.        An accountant is a person who will explain that you did not make the money you thought you had
12.        If in doubt, reconcile. (Then reconcile again)

Percentages can be confusing

When I started training as an accountant, one of the first clients I visited was a bookseller.

I remember being unable to understand how the clerk had computed his percentages when sales were falling. These included such impossible results as minus 134% and minus 179%.

I explained how to compute the percentage movement in sales from one period to another. 

The look of joy on the clerk's face was a delight as he came to appreciate a key fact: 

• Whilst upward trends had no limit (eg: increases of four time the previous week's sales would show as plus 400%), downward trends could never be worse than minus 100% (if no sales were made). He was thrilled.

I went back a few weeks later to check all was well. Unfortunately a stack of books (previously counted as 'sold') had been returned, thus creating 'minus sales' ...............!

GAAP - Are you sure you know what it means?

 Strictly speaking GAAP stands for Generally Accepted Accounting Principles but I prefer the suggestion that GAAP is the difference between accounting theory and accounting practice.

Or could it stand for one of the following?

Greatly Anticipated Auditing Performance
or
Grossly Aggressive Accountant's Punches
or
Gently Activating Accountant's Pencil
or
Generally Accidental Accounting Practices

Can you suggest any others?

Popular accounting terms - redefined

 Profit – A chief executive who gives the accountant the bottom-line.

Debtor – A high society fillies’ coming out trip.

Corporation Tax – A levy on people with large stomachs.

Turnover – The number of times customers are fooled into buying your product.

Budget – A caged bird that can fly through the sound barrier.

Expended – Exhausted from all that shopping.

Drawings – The creative art of taking money from your business.

Stock-take – Counting the number of items taken home from work without payment.

Book-keeping – Those books not given to the accountant.

Fixed Cost – Size of required bribe.

Cost Accounting – Size of accountants' bill.

Liability – A gift for telling the opposite of the truth without detection.

And finally –

Asset – A complete collection of posteriors.

With many thanks to Rod Wilson of RWA Ltd Accountants (Rod tells me that RWA = Really Wicked Accountants)

The top 10 signs you need a new accounting system

The top 10 signs you need a new accounting system are: 

 10. The service technician keeps threatening to retire 

 9. “Reconciliation” is your middle name 

 8. You ask for “proficiency in DOS” when hiring staff 

 7. When calling Support you hear laughter in the background 

 6. Salesmen no longer call you about upgrades 

 5. You have to go for coffee whenever you click on “Post” 

 4. Your system came on diskettes 

 3. The last person to know the setup password retired to Florida 

 2. Nobody understands the reports 

 and the top sign you need a new accounting system is . . . 

 1. Your sub-ledgers need counselling for “irreconcilable differences.”

Ten more puns for accountants

1. Immature accountants don’t act their wage.
2. Accountants don’t retire, they just close the books.
3. Accountants are like gymnasts as they need to be good at finding their balance.
4. Stoic accountants have good internal controls.
5. Accountants like working in glass offices because transparency is important.
6. My accountant's pre-tax income is gross.
7. Accountants quit when they lose interest.
8. Accounting can be accrual profession.
9. Some accountants have great figures.
10. Every accountant counts.

Ten accounting puns

1. Be audit you can be. 
2. It’s accrual world. 
3. Make every day account. 
4. Mind the GAAP! 
5. Excel at everything. 
6. Accounting is a career for smart assets. 
7. An accountant’s biggest workout is crunching numbers. 
8. Don’t hate, depreciate. 
9. Accountants can be the LIFO the party. 
10. Stoic accountants have good internal controls.

Ten annoying myths about accountancy

1. Accounting is just about maths
2. Accounting services are expensive
3. Accountants are boring
4. Accounting is all about helping clients pay less tax
5. It's important to have an accounting degree before you start
6. Tax is payable by reference to turnover (rather than profit)
7. Profit and cash are the same
8. If there's money in the bank we must be doing alright
9. You don't need an accountant if you use Xero or QBO
10. Accountants all make loads of money and are loaded

Credit to AAT for their recent social media activity that generated the above suggestions.

The purchase ledger accountant's lament

Piles of purchase invoices, in all colours and sizes
Apparently so varied but with very few surprises
The Boss will read them carefully before he authorises
Then it’s my job to process them as my blood pressure rises
I say each number quietly to get it in my brain
And as I type it to the screen I say it once again
The others in the office think my mumbling’s a pain
They say it shows I’m mad, but can I promise you – I’m sane!
Once input to the system I’m so careful where I pile ‘em
Too close to the window, they’ll be gone before I file ‘em
And that would be the end of me, straight off to the asylum…
My loving caring colleagues would be very quick to dial ‘em
So here I am, an invoice clerk until the bitter end
Most of the time I work real hard but sometimes I pretend
I’m living in a different world, with mates and cash to spend
Oh please won’t someone rescue me? I’M GOING ROUND THE BEND!

Written by Sean Kelly

Crazy accounting definitions

Book value: Value placed on an asset for accounting purposes that bears no relation to its true worth.

Budgeting: An exercise where the unknowledgeable force the unwilling to predict the impossible based entirely on the inaccurate.

Credit: Something that accountants rarely get.

FIFO: 'First In, First Out', a method of valuing stock. Also a method never used when accountancy firms are considering redundancies.

Goodwill: Concept invested to explain the difference between the value of a company and the price another company paid for it.

LIFO: 'Last In, Last Out', a method of valuing stock. Also a method frequently used when accountancy firms are considering redundancies.

Liability: Money or goods owed by a company. Also a first-year audit trainee.

Prudence: A fundamental accounting principle, designed to lend dignity to inaccuracy.

Reconciliation: The art of proving that one inaccurate figure exactly agrees with another inaccurate figure.

Taken from 'The Bluffer's Guide to Accountancy'

You may be taking accounting too seriously if…

You may be taking accounting too seriously if…

1. You can't wait to do your own tax return.
2. You think the GAP store sells accounting standards.
3. You think the CMA awards on TV relate to accounting (CMA is the Country Music Association).
4. You cheer at the Oscars when they announce the accounting firm in charge of the envelopes.
5. You read film credits to identify the name of the Production Accountant.
6. You double underline your mother's name when preparing her death notice.
7. You do an NPV calculation when you receive an indecent proposal (Of course this makes perfect sense if you are married).
8. You do an NPV calculation before deciding not to have children.
9. You can explain the difference between "downsizing", "right sizing", "re-engineering" and "firing people".
10. You use the term "value added" with a straight face.
11. Your Valentine's Day cards have bullet points.
12. You schedule a meeting with your spouse to discuss the past year's performance.
13. You aren't sure, but you think that you can claim depreciation on your human capital as a tax deduction.
14. Your idea of "absolute terror" is an unbalanced T account.
15. Your idea of "creativity" is a one-sided journal entry.

Are lap dances tax deductible? (parody: A Few Good Expenses)

Materiality - the music video

The ever-so material accounting song you've all been waiting for!! Materiality is an auditor's anthem created by two accounting musicians: Petty Ca$h [rap] & Auditor Meri [lead vocals & music production].

The FD's assistant may not be quite right for the job

The company personnel department had carefully interviewed thirty-eight people for the job of assistant to the financial director.

The chief executive thought that one candidate - Charles - seemed ideal.

Charles had been to a major public school. Not only was he a qualified accountant, but Charles also had a masters degree in business administration. He seemed fully aware of the latest creative accountancy techniques.

'Charles,' said the chief executive, we've decided to offer you the job. And as you're so well qualified we've decided to start you off on a slightly higher salary than the one advertised. We'll pay you £36,000 a year.

'Thank you,' replied Charles. 'But how much is that per month?

Found on the KEEPERS ACCOUNTANCY website.

What's the difference between counting and accounting?