Do you have Brown M&M’s in your accounting data?
Well, metaphorically speaking, we hope not.
The “No Brown M&Ms Effect" is a concept that originated in the world of rock and roll, where the Van Halen's (a list of demands) specified "no brown M&Ms" in the dressing room candy bowl. This seemingly trivial request was actually a test of the promoter's attention to detail and willingness to follow instructions.
Similarly, in the context of accounting data, the No Brown M&Ms Effect refers to the idea that paying attention to small details can have a significant impact on the quality of financial data. Inaccurate or inconsistent data, even if seemingly minor, can have a ripple effect and lead to larger, more significant errors down the line.
What would be your way of knowing if the operational quality and processes of your data management are up to the Brown M&M test?
Do you decide what data is a must only because Xero, MYOB or QuickBooks requires you to fill this out? or are optional data fields treated the same way you would treat compliance process data?
The management of this data can also reflect the attention to the small details.
As an example, lets take the humble contact record, are they populated with the correct tax numbers on every record or are they mostly correct and a few that really don’t matter?
Do the bill references mostly match the attachments but are sometimes named differently because someone had to do it in a rush or work around the data duplication gates?
We know that getting the attachments on every significant transaction is still a struggle, let alone this level of detail.
Unfortunately, ownership of the data is not a simple one-owner model, and how do you justify the cost of ensuring “no brown M&Ms"? Everyone needs help to ride the waves, but the ripples go easily unnoticed.
The reliance on data is not slowing down and ensuring processes, such as data validation, data cleansing, and regularly auditing data to identify and address any issues, will future-proof a ledger for gaining value from the data contained.
Embracing Quality automation is the “No Brown M&Ms” for accountants and bookkeepers using XBert.