How the Government Makes Life Harder

And now we come to the fun stuff. The Government.

Perhaps the most time consuming part of accounting is making sure that you are in compliance with the government. In fact, there is a 8 book set of books that describe the laws that require compliance. Each book has thousands of pages. The 8th book is just the index.

My on-site adviser gave me a question and challenged me to find the answer in one of the books. I couldn't even navigate my way through the index, let alone find the answers I was looking for. Government compliance is a pain because there are so many laws and regulations, and it is hard to follow them all. My adviser told me that before they can really understand the current volume, the next year rolls around and a new volume of books comes out. It's as if they write the laws faster than we can understand them!

As discussed in a previous post, there are many different types of retirement plans. The government has set regulations regarding how much money a company can put into each employee's retirement plan (mostly for tax reasons, they don't want companies to write off a ton of deposits). During this time of the year, we must review all the companies and their plans to make sure they are in compliance. If they fail, we have to make sure they take back the money they deposited (or fix whatever the problem was). This year, we've had a much larger amount of failed compliance tests, which means we have to put aside other projects to make sure the companies pass their compliance before the March 15th deadline.

Government compliance is very important, because we would get in big trouble if we ignored it. Spending tons of time working through the legislation is unavoidable.

I have attached some pictures of these regulations books to show you just how much government regulation there is:





This is the Index:

The Beauty of Excel Spreadsheet

Excel Spreadsheet is the lifeline of accounting. To put it simply, without Excel I would MUCH rather be working at the DMV than being an accountant. Excel has the means of double-checking your numbers for you and adding numbers together with a simple equation, as well as organizing your numbers in a way that is easily readable.

 One of the best parts of Excel is the functions; if you can do Excel functions, you can rule the world. Say you want to add two numbers together. All you have to do is, in the space you want, put an equals sign and click on the first number you want to add, the hit + and click on the second number. Hit enter, and boom you have an equation. The best part is, the equation isn't actually adding the numbers; it's adding the spaces in the spreadsheet. So if you're adding column A row 1, and Column B row 1, your equation would be =A1+B1. Then take the space with the equation and drag the corner down, and the equation will be copied to all the spaces you dragged it too. But the best part is that it automatically adjusts the equation for each row; In row 2, it would be =A2+B2, and row 3 would be =A3+B3.

Excel spreadsheet makes the process of accounting much easier and faster, meaning you can do more work in a shorter amount of time.

More on Account Statements

A big part of this internship has been the account statements, so I wanted to explain more about them. The statements come from companies like TD Ameritrade, Wells Fargo and Merrill Lynch.

These statements usually come monthly, and detail all the transactions that happen within a certain account. What I do is I need to check the balance from the end of the previous month and the balance at the end of the current month, and check all the transactions to make sure they all dd up. For example, let's say that Bob's account had $100 at the end of January, and $200 at the end of February. Bob deposited $150 into his account. He also took in $25 in dividend money. That makes a total change of $175 in the month of February. Logically one would think that he would not have $275 in his account, the first $100 and this month's $175. But he doesn't, he has $200. Where did that $75 go? The account statement will contain information on the seemingly missing money. If you look through the statement, you'll find that there was a $50 fee charged to the account. Also, his stocks wend down in value by the amount of $25. That accounts for the missing $75.

 Each company's statement has a different layout, but all convey the same information. With this information, I go through and figure out what went into and out of the account, and make sure all the numbers add up. Obviously most accounts deal with numbers much higher than a few hundred dollars. Usually the accounts contain hundreds of thousands of dollars, sometimes even millions. The more money in the account, the more activity in the account; accounts with not very much money usually don't have investments and dividends to worry about.

Week 2

This week I worked with spreadsheets and entered data from account statements. For example, I took note of changes in account balances, and entered deposit/withdrawal and interest/dividend data. One thing that made the process go a lot faster was the using equations in excel. Instead of havig to type all the numbers into a calculator to add them all up, excel will add up numbers via a simple equation. This was a huge time saver.

After entering all the data came the real time consuming part. All the statements had to be scanned into pdf documents. The scanner is this big clunky thing. The most annoying part as that the scanner didn't remember the settings you typed in the scan before; for every new scan, you have to specify where the document is to be scanned to (for my case, it was the intern computer), make sure you check that the document is to be scanned double sided, and, if necessary, scan the document in color (this is necessary for some statements where the numbers look gritty and hard to read if not scanned in color). And even when you do all this, sometimes the pages of the paper stick together and you have to re-scan the whole thing because a page is missing on the pdf. Which means you have to count every page of every document and make sure the document and the pdf match up. It took me all day to scan in and check just a stack of documents.

I mentioned in a reply on my last post that it poses a security risk to electronically receive the documents. The process of scanning documents is different than receiving them electronically because they are at no point of the scanning process being delivered via online means. Although they are now stored on the computer, they are not at risk to be stolen.