Monday, July 15, 2019

The Right Way

It's budget time at the association I work for. And what I mean by that is that the budget for our new fiscal year has been approved by our Board of Directors, and now it's time to code all our projected expenses for upload into our accounting system, and to prepare the worksheet by which all our staff members can be sure to submit their expenses to the right codes as their invoices come in throughout the year ahead.

It's a fairly straightforward yet tedious procedure. For a variety of reasons, much of it has to be done manually. Cutting and pasting from last year will give you a good start, but there are always just enough changes from one year to the next to force you to go through every item, line by line, to make sure each one has the right expense code attached to it, it had the right number, and that number is appropriately allocated for the months in which the expenses are likeliest to occur.

And while we were doing this, something obvious occurred to me. There are hundreds of different ways to code a year's worth of expenses. Reasonable people may have reasonable disagreements about how they should be coded. Some of those people may go so far as to say that their way of coding the expenses is the "right" way to code the expenses.

But, in truth, there is only one right way to code expenses -- and that is how the worksheet we take so much time creating says they should be coded. Someone may think that their way of coding expenses is better, is more efficient, or makes more sense. But those aren't factors that need to be taken into account.

The goal of the exercise, after all, is not to code expenses in the "right" way. The goal is to get everyone in the organization to code expenses the same way. A crazy set of expense codes, after all, is more valuable to the organization than a logical set, assuming that everyone understands and agrees to code their expenses in alignment with the crazy set, and refuses to do so with the logical one. In that case, it is the crazy set that actually provides more reliable and predictive information to the organization.

Remember that the next time you're in a group that seems to be arguing over the right way to do things. Getting it right is often far less important than getting everyone on board.

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This post first appeared on Eric Lanke's blog, an association executive and author. You can follow him on Twitter @ericlanke or contact him at

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