{"id":4011,"date":"2013-04-08T09:51:33","date_gmt":"2013-04-08T07:51:33","guid":{"rendered":"http:\/\/www.officetodo.com\/public\/?p=4011"},"modified":"2013-04-07T09:52:17","modified_gmt":"2013-04-07T07:52:17","slug":"what-does-consistency-have-to-do-with-accounting","status":"publish","type":"post","link":"https:\/\/www.officetodo.com\/public\/what-does-consistency-have-to-do-with-accounting\/","title":{"rendered":"What does consistency have to do with accounting?"},"content":{"rendered":"<p>Consistency is something we\u2019re asked to enforce in almost all of our doings and in every walk of life. In the light of accounting the meaning of consistency is the same, the importance is the same although obviously the things to be consistent with are specific:\u00a0<!--more--><\/p>\n<ul>\n<li>It\u2019s no doubt already mentioned in the forewords or some general accounting principles you\u2019ve chosen that it\u2019s important to <strong>stick to the methods<\/strong> chosen. Whenever there\u2019s an option you can choose between you should also note down that changing between two or more isn\u2019t accepted unless you\u2019re really meaning to change the accounting method and you\u2019re not doing it just to choose another method next month or year. Changing back and forth isn\u2019t allowed however changing once in a reasonable amount of years, say 5, is understandable. It\u2019s okay to change accounting methods being used because conditions change, economy changes etc. whereas changing back and forth every reporting period just refers to someone choosing accounting methods that would benefit them the most. Accounting isn\u2019t about having the best numbers, but having comparable and informative figures.<\/li>\n<li>Sometimes you\u2019re making a specific entry to one set of accounts and the other times on others \u2013 what will happen? Obvious thing that\u2019s going to happen is that a lot is messed up \u2013 your figures are not comparable from month to month and what\u2019s more, they aren\u2019t even true and fair. If for an example your bank charges are sometimes shown under \u201cBank charges\u201d account and on other times under \u201cOther operating expenses\u201d how would you know how much you actually pay for bank charges? And what if you\u2019d say the amount on the \u201cBank charges\u201d account as what you\u2019ve paid whilst this is not an accurate amount? Okay, bank charges aren\u2019t obviously huge amounts in your expenses, but you get the point I hope. To really know what you\u2019re spending on specific areas (i.e. rent, utilities, cleaning etc.) you want to ensure that you\u2019re <strong>sticking to right accounts and you\u2019re making specific entries always on the same accounts as you always do<\/strong>.<\/li>\n<li>Consistency in keeping deadlines comes more down to your self-discipline really. How well are you with meeting the expected deadlines and how do yourself feel if people fail in doing that? It shouldn\u2019t come as a surprise that accounting including all the relevant reporting is about following some specific reporting schedule and for that you must ensure you\u2019ve got all related information gathered and analysed or entered into your accounts so you can meet the deadlines. Failure to do so may have severe consequences and if not right away, you may still face fines that could have been so easily avoided. Something I strongly advise you to do and have in front of you is the <strong>list of things you need at a specific date and the relevant reporting deadlines and dates<\/strong>.<\/li>\n<li>What usually happens when you forget to get a document in the first place is that you forget it almost always later on as well. Experience has shown that once forgotten you get so many other things on your mind that this little thing is definitely behind it all for good. What I suggest you to do and be really consistent in it is obtaining and storing your documents. For every accounting entry there shall be a source document and those you\u2019re obliged to keep safe for determined amount of years (your local legislation sets the years, but it\u2019s usually somewhere around 5-10 years from the date you made the accounting entry just to give you an idea of a timeframe we\u2019re talking about). Be very consistent and make it your routine to ensure <strong>every accounting entry has some sort of a document to support it<\/strong> (it can be digital as long as you can ensure it\u2019s there to be viewed after all those years if need be).<\/li>\n<li>In <strong>presenting your results to the public<\/strong> you\u2019ve also got to keep consistency. It\u2019s not only having your own accounts showing similar transactions over time as we mentioned above, but also categorizing similar types of accounts and their expenses therein into same groups over reporting periods. The reason you\u2019d want to do this is quite the same \u2013 in order to be comparing similar numbers.<\/li>\n<\/ul>\n<p>So compliance and consistency, two of the key and fundamental rules when it comes to accounting \u2013 keeping everything in line with the regulations and doing things the same way all the time. How do you achieve all this however? Well, that\u2019s what the internal accounting rules are there.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Consistency is something we\u2019re asked to enforce in almost all of our doings and in every walk of life. In the light of accounting the meaning of consistency is the same, the importance is the same although obviously the things to be consistent with are specific:\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,74],"tags":[],"class_list":["post-4011","post","type-post","status-publish","format-standard","hentry","category-2-processes","category-2-7-accounting-in-itself"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4011","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=4011"}],"version-history":[{"count":2,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4011\/revisions"}],"predecessor-version":[{"id":4014,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4011\/revisions\/4014"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}