Starting from scratch by Guest Blogger D’Anne McNaughton, CPAPosted: December 18, 2017
Last year, I left my work of 10 years as a sole practitioner, serving mostly as a sales tax consultant, to the oil and gas industry to work with a startup entity – a new oil and gas exploration company.
That’s what you do in Midland, Texas. Oil and gas.
The company was full of engineers, geologists, and one CFO/financial specialist. One engineer was the CEO; the rest were VPs. I was rather lonely.
I was hired on August 31st and they asked if I could start the very next day. Having wrapped up the field work on all the current sales tax projects I had, I was looking for a new challenge. So of course, I said yes. I brought my own computer because the company was only two weeks old at that point and had no infrastructure.
The current accounting system was an excel spreadsheet. A check register. Quickly, we got me scheduled to attend a two-day training class being held by the software company that produced the accounting software we were purchasing.
I have been a CPA for almost 30 years; worked in industry in the past, as well as in public accounting. I’m not foreign to accounting systems; able to jump rapidly from one system to another (Quickbooks to SAP to Integra and back!) But in 30 years, this is the first one that I had to set up by myself from the beginning. A blank slate, with no databases filled in. No chart of accounts, no properties, no vendors, nothing. Start from scratch, so to speak. Did I mention I was looking for a new challenge?
There are several definitions available for the phrase “start from scratch.” For instance, here the phrase is described to mean starting from the beginning, to set out on some action or process without any prior preparation, knowledge, or advantage. That certainly felt like my position in the beginning. And in the meantime, we had two wells being drilled, vendors who wanted to be paid, employees to set up and get paid, governmental entities to register with (and get paid!), and nobody wanted to wait for a new system to get rolling.
With a lot of diligence and overtime, we did get it up and running, all the databases set up and all the previous transactions entered. We were actually able to enter payables and write checks like a real accounting department. Eventually another accountant was hired, and I had a chance to breathe. I looked down the road, and knew from my past experience, that every transaction I had entered into that system was going to be audited for year-end financials.
So I began the process of gathering the documentation for all the activity that occurred while the company was being formed. When I first asked for the documentation that supported our initial oil & gas acquisition (a mid-eight figure number), I was given the check stub that had been torn off the check that was written. A 2”x2” piece of green paper with a name and a dollar figure written on it. I knew I was in for a long row to hoe . . . there’s that new challenge thing again.
It’s been almost a year and a half now. The accounting system is fully populated, spitting out nice financials and operational reports, and paying vendors right regularly. There were a few mistakes, but we all know that mistakes can be fixed. Nothing is critical. Always make sure you can reconcile back to cash. I drew on the experience of almost 30 years, both in industry and in public accounting, to see where we needed to be and how to get there.
So I prefer the definition of starting from scratch that I found here. The author goes on to say the phrase actually originated in the sports world; meaning to take your position at the starting point, pick up your bat, club, or whatever is the tool of choice, and begin the endeavor. That’s a better description I think; as accountants and CPAs, we all draw on the tools provided by our education, training, experience and networks, especially when we are starting at the beginning of some new endeavor.
D’Anne McNaughton, CPA