FINANCIAL REPORTS FOR MANAGERS SHOULD BE ROLLING, NOT DICTATED BY FINANCIAL YEAR ENDS.

Auld Lang Syne is for many the first song heard in the New Year, written in colloquial Scottish by Robbie Burns in 1788 and set to the tune of a traditional folk song. The title may be translated into standard English as: old long since, or long, long ago or days gone by or old times and the modern interpretation of the first verse is:  

Should old acquaintance be forgot,
and never brought to mind?
Should old acquaintance be forgot,
for the sake of days of long ago?

For many, December is the end of the financial year, but frankly it doesn't matter when it ends. The question is, 'does the year ever end' in any enterprise. I have often heard managers breath a sigh of relief when a new financial year ends, with the comment " Thank goodness that year is over and we can have a fresh start" or "Now we have to do that all over again!"

These delusional remarks reflect on the question raised by Burns. The fact is of course that a financial year end or the beginning of another does not reverse fortunes, there is no let-off for managers resulting from an accounting anomaly. Why do we forget 'days gone by' and start our management financial reports again from scratch as if the past never existed and ignore the information it contains as valueless.

Financial year ends are for Her Majesty's Revenue and Customs, auditors and stakeholders but not managers. The financial headaches and direction of the organisation are not switched off at the end of any discreet single year's operation. It's about time that our regular accounting reports for managers reflected this fact and ceased this financial year ending antiquity. So make the change and stop allowing managers off the hook.

  • 2015-01-27 11:17:51
  • David Willcox
  • Financial reports, management accounting, financial year end, accounting trends, forecasting, budgeting