Perfectionists Listen Up! This Accounting Concept Can Help

perfectionistHi. My name is JC and I am a perfectionist. I strive to be as thorough and accurate as possible in nearly every given situation. Sometimes the outcome is a rewarding job well done. More often than not, I get bogged down in all of the details – striving to ensure complete accuracy in exchange for inefficient use of time and, unfortunately, frustration.

Don’t confuse perfectionism with being an overachiever. The two often go hand-in-hand, but can be mutually exclusive. And when your perfectionism is not helping you overachieve, then watch out, it can be a recipe for disaster. I often find myself in this latter category.

Being a perfectionist is truly a double-edged sword. It’s a gift and a curse all rolled into one. For example, I attribute my perfectionist tendencies to excelling academically. My grade point average (GPA) was among the top of my class in a fairly large high school. I graduated Summa Cum Laude (“with highest honors”) when earning my Bachelor’s degree. And, I obtained my MBA again coming in among the top GPA’s. Now, I didn’t particularly enjoy school and would bemoan the assignment of homework or the announcement of papers or projects. However, once I got started on the schoolwork, I would complete it with thoroughness and a high standard of quality. I just could not let myself do anything less. There were isolated incidents over the years during my studies where my perfectionism didn’t serve me well. That said, this is an area where being a perfectionist was an asset.

On the flip side, I work in finance at a large, multi-national corporation. You might think being a perfectionist would be a valuable trait to have in finance. In reality, it can actually be a hindrance. Sure, you need to be as accurate as possible with the numbers, but if you get too caught up in the minutiae you’ll likely be setting yourself up for trouble. In a fast-paced environment, making sure you’ve got all the “i’s dotted and t’s” crossed can hold you back from taking on additional and increasing responsibilities. Throughout my career, this has been a challenge for me. I inherently want to make sure I understand every last detail and want to put my best foot forward by continuously verifying accuracy. If these finer details and increased accuracy won’t have an impact in the final decision to be made – it doesn’t matter! In those situations, my only consolation is taking solace in knowing I “did a good job.”

Side Effects of Perfectionism

  • Ineffective use of time – Some people work more efficiently than others, but all perfectionists invest more time than really needed. After all, it takes lots of time and effort to be perfect. It’s not uncommon for perfectionists to be left spinning their wheels because their steadfast diligence won’t let them move on until they’ve got it just right. The result is you could be putting in long hours at the office or constantly feeling like you can never get enough done to climb your way out of the hole.
  • Takes away from other needs – This consequence is a product of the above bullet. Ineffectively using your time means you have less of it to use elsewhere. When you are busy perfecting one task, you are neglecting others. Perfectionists tend accomplish less volume wise than others even though they are usually producing at a higher quality.
  • No one notices - Here’s the real kicker – more often than not, no one notices all the work you’ve put in…no one but you. Joe Schmo won’t know you spent hours making every detail flawless. He probably won’t even know it really is flawless. Most of the time, you are only being perfect to appease yourself – not anyone else.
  • Critical of others – Perfectionism makes it easy to look down on others. After all, if you invested so much energy and effort to be perfect, surely others who aren’t as thorough or dedicated do an inferior job, right?

What should we perfectionists do to help us with our “affliction”?  The answer is simple – let’s turn to accounting! What? Yep, accounting.

An Accounting Solution for Perfectionism

One of the basic elements of financial accounting is the concept of materiality. Technically speaking, materiality is defined as “the magnitude of an omission or misstatement of accounting that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement.”

Say what? What does that definition of materiality even mean and what in the world does that have to do with perfectionism? It’s actually pretty simple. In a nutshell, materiality means some things are bigger or more critical than others. The large items are material, or important, and should be focused on to ensure they are accurate. Conversely, immaterial accounts aren’t as vital.

Applying this concept to a perfectionist’s life can lead to enhanced performance. You need to discipline yourself to only address the material tasks. The immaterial or trivial details should be left alone because they don’t change the overall picture of what you’re trying to accomplish.

For example, let’s say you’re putting together a presentation at work. You’ve got all the information on your slides in an easily conveyable fashion. You’ve verified the data used is accurate. The format is generally appeasing to the eyes. You will be able to effectively communicate your message to your intended audience. Now stop! Be done with it. Unless this is the absolute most important presentation of your life, don’t go back and waste time playing with the font size to make it “just right” or mess around with the graphs to make it more visually appealing. That kind of stuff is immaterial. Move on to your next task.

Or let’s say you are doing a quick vacuum because you will be having company over tonight. You’re halfway finished when you notice there’s some dirt around the baseboards. And then you see a few cobwebs in the corners of the ceiling. Ah, and then there’s too much dust behind the TV set. Oh, and darn those few scuff marks on the wall – got to get those cleaned up too. You end up spending an extra hour cleaning. Chances are your guests wouldn’t have even noticed! Everything aside from the original quick vacuum was immaterial. You didn’t need to do them especially if you find yourself short on time to make other preparations. So skip that stuff – well, except for the cobwebs. Always clean the cobwebs ;-)

Use common sense when applying materiality to your perfectionism. Some things in life you simply cannot ignore. Thus skipping over the immaterial items would be detrimental. Also, don’t use materiality as an excuse to be sloppy. You still need to make a quality effort…just know when to step away or let go.

Note: for all of the accounting professionals and CPA’s out there, I must point out that in accounting materiality does not mean you can simply ignore the “little” items. You must account for those too. Rather, materiality means there’s a threshold whereby you need not focus on these immaterial items if they don’t impact the “big picture” (the financial statements).

I hope you fellow perfectionists have found this article helpful. I spent lots of time perfecting it. :-)

Are you a perfectionist? Do you struggle with managing your perfectionist tendencies? What is the least desirable aspect of being a perfectionist? Do you think the accounting materiality concept is applicable? Could it help you if you remind yourself not to focus on the immaterial tasks?

I’m trying to drive up my Twitter followers, Facebook Likes, and E-mail subscriptions. You can also follow along via Google+, BlogLovin, or RSS. Please help me reach my goals by selecting one or all of these options!

Image courtesy of jazbeck at Flickr.

23 Responses to Perfectionists Listen Up! This Accounting Concept Can Help

  1. Zee April 10, 2014 at 12:01 am #

    Ha! I was basically thinking of your last line the whole time I was reading this. I kept thinking, I try to perfect my writing but I really need to stop trying to figure out every side to what I’m writing, I need to stick to one focal point and go with it, not play devil’s advocate in my own articles. Also for me, I need to focus on editing, editing, editing… I find that some of my writing goes on for longer than most people prefer to read so simplify first. Then if someone brings it up in a comment or something then you can back it up with the details.

    Sometimes for me I wonder if I have some OCD tendencies because it’s hard for me to drop some things once I’ve started.
    Zee recently posted…Personal Finance and Personality Disorders: Help or Hindrance?My Profile

    • Mr. Utopia April 12, 2014 at 7:49 pm #

      I hear you. I tend to go on and on oftentimes too. Long articles can be a good thing, but not if you’re just droning on and not adding value. The more you write the more I’m sure you’ll naturally become more efficient at it…many bloggers have said that’s what happened to them.

  2. Jen @Sprout Wealth April 10, 2014 at 2:44 am #

    I know it is not always positive where being a perfectionist is concerned. I used to be one but I admit I didn’t see perfectionism this way before. No offense at all but I am glad that I have learned to adjust (not major but significant) or up until now I will still encounter a lot of disappointments if my perfectionist standards are not met.
    Jen @Sprout Wealth recently posted…How to Use Game of Thrones to Sprout WealthMy Profile

    • Mr. Utopia April 12, 2014 at 7:51 pm #

      It’s not uncommon for perfectionism to be viewed in a negative light. In many situations, being a perfectionist is a blessing. However, the trait is not without its faults and can really hold you back if you can’t properly assess what is truly important and what isn’t.

  3. DC @ Young Adult Money April 10, 2014 at 9:36 am #

    I’m definitely a perfectionist and I loved your cleaning example. I get very caught up in cleaning when we have guests over and can often spend far too much time on it. With that being said, I also work in finance and I think being a perfectionist can often benefit you. Even a small slip-up can lead to bigger issues, but you’re right that you need to constantly think about materiality or risk wasting way too much time.
    DC @ Young Adult Money recently posted…How to Get Up to 3 Free Las Vegas Hotel Rooms a MonthMy Profile

    • Mr. Utopia April 12, 2014 at 8:09 pm #

      You’re right, a small slip up in the numbers can definitely lead to bigger issues. I think you can still maintain accuracy in finance without being perfectionist though. For example, if you have an unknown item posting to the general ledger, do you spend hours researching it when it’s only $15,000 out of $3M in expenses on a Profit and Loss Statement? The perfectionist might because he wants to fix everything. In reality, that charge won’t make a difference in the financial statements or the numbers you’re reporting out.

  4. krantcents April 10, 2014 at 4:37 pm #

    As a former CFO, I valued good information I could rely on. It did not have to be perfect, but timeliness and reliability was more important.
    krantcents recently posted…How I live on 50% or less income!My Profile

    • Mr. Utopia April 12, 2014 at 8:10 pm #

      That sounds like a practical and efficient approach.

  5. Untemplater April 11, 2014 at 12:21 am #

    I wrote a confession post about my own perfectionist tendencies a bit ago. It’s hard to let go! I like your points about materiality. Nothing can be perfect so looking at materiality can save us from going crazy. :)
    Untemplater recently posted…Thanks For Three Great Years And Here’s To Three More!My Profile

    • Mr. Utopia April 12, 2014 at 8:15 pm #

      Yes, it goes against our nature to let go! I really do believe having the materiality concept stored in the back of your mind can be beneficial. When you find yourself starting to be drawn into perfectionist mode, just ask yourself “does this really matter? will my efforts provide a worthwhile return or am I getting caught up in meaningless details?”

  6. Syed April 11, 2014 at 8:18 am #

    Really enjoyed this article. Because just a few minutes ago I was trying to reconcile my budget since it was off by 1 cent. 1 measly cent! I went through a few statements and finally found the discrepancy, but what a waste of time since I had some other important tasks to do. Anyway, I really like this concept. Some actions are disproportionally more important than others so it would behoove someone to focus on those. Actively working on this every day.
    Syed recently posted…A Twist on the HSAMy Profile

    • Mr. Utopia April 12, 2014 at 8:29 pm #

      Yikes, 1 cent! I’ve been there before. And that’s exactly right, focus on the more important actions and, if you can’t tell the difference, take a quick step back and simply ask yourself that question: is this important? Am I benefiting myself by doing this task? If you’d asked yourself that question about the 1 cent, I’m hoping you would’ve said “no” and moved on.

  7. The Thrifty Issue April 12, 2014 at 10:29 pm #

    We are opposites! I am so far from a perfectionist it isn’t funny. However, I know plenty of people who cold do really well reading this article!
    The Thrifty Issue recently posted…10 quick ways to save money nowMy Profile

    • Mr. Utopia April 14, 2014 at 9:56 pm #

      Be sure to send them the link to this article then :-)

  8. Kylie Ofiu April 12, 2014 at 10:50 pm #

    My father was a perfectionist, so I kind of strived not to be, but I hear you on these points. I prioritize and set time limits on things to help me move on when I would otherwise keep going because it’s not perfect.
    Kylie Ofiu recently posted…My favourite 29 posts to make money, save money and more.My Profile

    • Mr. Utopia April 14, 2014 at 9:57 pm #

      Yes, I think there’s a bit of perfectionist in all of us, but some are way more extreme than others. Setting time limits is a good idea to help manage.

  9. The Phroogal Jason April 14, 2014 at 11:07 pm #

    Completely agree that people think perfectionist means overachiever. They aren’t mutually exclusive. Someone can spend all the time in the details and never see the forest. An overachiever can see what’s important, focus on that and excel in the results without much need to make it perfect.

    It’s a concept I am living with on a daily basis with my startup. Do we wait till we are perfect or do we simply execute and improve.
    The Phroogal Jason recently posted…The First Time I Got Hacked OnlineMy Profile

    • Mr. Utopia April 16, 2014 at 3:22 pm #

      It sure is a common misconception. That’s a tough call about your start-up. Without knowing any of the details, I’d say the best approach might be perfect as much as you can, but don’t shoot for 100%. Improving based on feedback and results is usually a wise path.

  10. Peter April 17, 2014 at 11:10 pm #

    I heard Steve Jobs was bit of a perfectionist and when I read about some of the greatest mind in the world, I see that lot of them were perfectionist also. Me on the other hand, not so much so, there are things that bother me, but I learn to get over it.
    Peter recently posted…Best way to make money online for me: Affiliate MarketingMy Profile

    • Mr. Utopia April 18, 2014 at 9:42 am #

      Yes, being a perfectionist can be a blessing…or a curse depending on how you use the personality trait. I wouldn’t be surprised if most of the people we classify as extremely successful are very perfectionist oriented. There’s no doubt they understand and apply the materiality concept though (whether or not they’ve actually termed it as such).

  11. Don @ Breath of Optimism April 22, 2014 at 12:06 pm #

    I’m well aware of materiality. I worked in tax accounting for a few years and we had the joke that if our numbers didn’t tie out, the difference was never material – regardless if we wee off $1 or $1 million. All joking aside, being a perfectionist can be a bad thing. You end up spending too much time on things that you could be done with in a much shorter period of time.

    I know that from working, being a perfectionist is a waste of time. I’ll spend countless hours making it “perfect”, but it is only perfect in my eyes. Someone else, usually my boss, sees it differently and I need to change my perfect work.
    Don @ Breath of Optimism recently posted…Money and HappinessMy Profile

    • Mr. Utopia April 22, 2014 at 10:24 pm #

      Ha, as someone with an accounting background and education, I find that inside joke quite funny :-)

      I like how you put it: “I’ll spend countless hours making it “perfect”, but it is only perfect in my eyes. Someone else, usually my boss, sees it differently and I need to change my perfect work.” This is so very true.

  12. gh.radiorve.com August 13, 2014 at 4:33 pm #

    ทั้งนี้ก็หมายถึงอยู่ไล่ตามท่านแบบเจนตรัสเก็บพำนักจบทั้งนี้ทั้งนั้น ประกันการเดินทางต่างประเทศ อีกทั้งมีอยู่บุคคลในที่เฝ้ารอจะฝ่าฝืน เผ้าคอยในจะไม่รู้ความหมาย กับรอแดนจะนำมาใช้ประโยชน์ในงานส่งเสียกลีต่อกัน ประกันการเดินทางต่างประเทศ แตะต้องมีอยู่งานทดลองรับทราบตำหนิ ใครทำสุทธิใช่ไหมไม่ ต่างว่าไม่บำเพ็ญหรือไม่บริหารเพราะว่าไม่หมายใจ เผ้าผมไตร่ตรองว่ากฎเกณฑ์ก็มีอยู่กฎ ไม่ก็มีเรื่องพิเคราะห์เป็นพิเศษถวายปรากฏต่อจากนั้น ประกันการเดินทางต่างประเทศ วิงวอนเหตุร่วมมือพร้อมด้วยทั่วแกเช่นกัน ชาวต่างประเทศสามารถจะอีกทั้งไม่ทราบ

Leave a Reply

CommentLuv badge