day 1378: Rounding Numbers

“Your scales and weights must be accurate. Your containers for measuring dry materials or liquids must be accurate. I am the Lord your God who brought you out of the land of Egypt.”

Bank of America tried to dismiss a $4 billion accounting error because with a balance sheet of $4 trillion, what’s $4 billion really?  They said, it didn’t hurt earnings or anything and hat it’s really not even material.  The law of big numbers is a dangerous law.  We will many times hear people say about a number, “That’s just a rounding error to them”.  When we hear that our ears should perk up, because the minute we start to think of numbers as rounding errors, we are at the beginning of losing control.  I once challenged a CEO about him wanting to count something that was too small for him, at his level, to be paying attention.  He pushed back with a response well remembered, “If I am not counting the small things, then how do I know what adds up to the big things.” $4 billion dollar mistakes don’t just happen.  Somewhere in the corporate culture, $1 billion dollars has been talked about as “rounding errors”.  In that company, what does $100,000 or even $100MM mean?

Today, one of us will complete a financial statement or fill out an expense report, or report the hours we worked on a project to be billed.  In those cases, we can round up the hour, round down the dollars, or round up or down a percentage point or two.  But, if we do, we are in jeopardy.  Rounding numbers always come with intent and if that intent is to make the books look better, hide the amount spent or leave a little extra in our pockets, then we are not bringing glory to God in our work. Somethings are not obvious, others are and in this case, let’s not be the ones who are doing the rounding.

Reference: Leviticus 19:36 (New Living Translation)