| 14–1. Eliminate Small-Balance Accounts |
If the general ledger accountant is in the habit of maintaining a record of all the transactions in all accounts, there can be a considerable workload in store if there are many accounts. This practice is particularly common for balance sheet accounts, where it is necessary to keep track of all asset and liability records so that they can be reviewed during the year-end audit. If there are fewer accounts, there is less maintenance work needed to update a listing of the detailed records in each account.
Accordingly, a minor and easily implemented best practice is to periodically review the balances in the balance sheet accounts and merge them into larger accounts if the current balances are quite small. This task can be included in the financial statement preparation procedure as a standard item so that someone reviews the size of accounts on a regular basis and eliminates a few as necessary. There are no downsides to this best practice since it requires minimal work, reduces the clutter in the balance sheet, and does not interfere with the proper recording of information.
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