Tax Prep-Work...

The tax season is once again upon us. This year we're supposed to have the raw data for the tax guys in both sub-companies ready by the middle of June. At least that's currently the timeframe we're shooting for. It will all depend how much changes will have to be made during prep-work and that all depends on how correct the accounting entry has been during the year. But this very narrow timeframe means also that I can't be doing the prep-work in both sub-companies and that the junior accountant has to do the prep-work for the one sub-company he's partially resüonsible for.
Well, when it comes to the performance of our junior accountant it's always a hit and miss. He's still very confused at times and doesn't think his strategy quite through. So I know there have been a lot of mistakes during the year. And he regularly asks me one and the same questions over and over again. After 8 month you would think he would have finally figured that out. But I guess he hasn't. He is especially confused when it comes to dealing with the inter-company transfer accounts. I have to admit that this is something that isn't quite easy and requires a great deal of thinking things through to figure out on which side the expense has to go during what stage of the transaction. And there have been a lot of other circumstances when I realized that our junior accountant had at least 3 years accounting in school and that he only learned the stuff he needed to learn for tests. The one thing that he never really got a good understanding of accounting and the greater picture involved. It just shows that accounting has nothing to do with intelligence. You either understand it or you don't. If you don't quite understand it, accounting can be one of the most frustrating things in life. I do understand it and I'm really having fun at work.
On Friday I told our junior accoutant to start with the prep-work. About 1/2 hour later he comes to me and it was quite apparent that he didn't have a clue. So I told him print out the laedge sheets for the business year we'll be giving to the tax guys. For me it was completely logical that he was going to control the starting balance first. Well, he didn't quite do that. So I asked him if he had checked if the ending blanace of last year, the starting blanace on the year-end sum overview and the starting blance on the ledger sheets did matcht up. Well they didn't. So I explained to him that he has to figure out why that is the case. I thought as accountant it can't be that difficult for him the figure that out. Couple of hours later he comes again to me just to tell me he can't find anything wrong. So I explain to him to calculate the difference between the ending balance of the last tax year and the opening blanace of the current tax year and look if it some point during the prep-work for last tax season we had entered changed in the opening balance of the last tax year. He finally figures out that those changes are exactly the difference. His solution would have been to enter the missing parts of the opening blance into the current tax year. This solution couldn't be more wrong. Doing that just means tha I have the correction twice. What our junir accountant just couldn't comprehend is the fact that the changes to the opening blance of the last tax year have not been carried over into the new tax year. So fianlly I tell him that he manually needs to carry the balance forward into the new year. That's a very simple procedure...it's just one mouse click.
With that done he could start with the first stage of the prep-work. I'm still convinced that he hasn't comprehended the opending blanace, ending blance, and day to day accounting relate to each other. And that was actually the really easy part. We haven't even began to split expenses between 2 tax years or moves expenses around. That's the fun part and shows who's an accountant and who is only pretending to. So I wasn't at all surprised when the junior accountant called in sick this morning. Apparently he's completely overwhelmed with that task. And hopes that someone else will be doing it.