Consistency

It’s such a simple word, with a clear and simple meaning, and yet often neglected and outright ignored. Why is it so however, I have no idea.

Let me explain.

Consistency is by default presumed in your daily reporting and as such, it is assumed you would account similar transactions in a manner that is consistent from day to day, from period to period. It is also assumed that your accounting routines are similar from transaction to transaction, i.e. referencing documents, describing the entries within the accounting system, reading the subject matter of the transaction as opposed to what’s written on the document and giving all similar transactions the same accounting treatment.  

Consistency is also presumed in your reporting and mainly implies that your reporting compares apples with apples and not with peaches or worse, with tomatoes. It’s just an example to describe what sometimes happens with companies and their reporting. For an example travel expenses can be compared with office supply expenses or say electricity. None of them are in fact comparable in such detail whereas you could sum them up into operating expenses and then they’d be comparable as it is in the total sum.

Be consistent in your daily routines and in your regular reporting, work out schedules to ensure you compare the same things from period to period and what’s more, follow them through! Your routines should be as simple and as clear so as to make sure they don’t disturb or become obstacles in ensuring consistency and actually making your life easier. Keep in mind that clear and consistent accounting ensures also you’ve got a clear view of what’s happening with your company, you accounting and you’ve also got it a lot easier to go back in time if need be to understand why something was done, to adjust some entries etc.