By Jo Osborne Accountancy resourcesThe most common writing mistakes accountants make (and how to avoid them)18 Jul 2017 If you work in finance you probably enjoy working with numbers, however more than ever a modern accountant needs to be a good communicator.Most of the people you’ll be communicating with, from your clients to your suppliers, won’t speak in spreadsheets. As a business adviser you need to help others interpret the data so they can make informed decisions. Everything from bad grammar to using financial jargon stands in the way of getting your message across. Here are some common traps to avoid.Accounting jargonAs accountants we get very used to accounting language. Gross profit, net profit, depreciation, non-current assets, receivables accruals and more, all seem very clear to us because we use them on a daily basis. However, this is not the case for our clients. Business professionals may be familiar with ‘sales and purchases’ and the concept of profit, but you may lose them at depreciation policies or accruals and prepayments.Gauge your clients’ level of knowledge and familiarity with financial language before launching into explanations filled with financial jargon. Regardless of their expertise, always take the time to put your recommendations into context for their unique circumstances. Not only will this make you more approachable, it will also minimise misunderstandings and help to ensure that they provide you with the information that you need.Bamboozling clients with spreadsheetsA spreadsheet of a client’s monthly cash flow forecast may be very satisfying to produce – who doesn’t like a beautifully presented spreadsheet with neat columns of numbers and complex formulae to calculate key figures? But the key thing for the client will be the forecast net cash flow at the end of each month and ultimately is their account going to be overdrawn? Your clients really need you to show them why the spreadsheet you’ve painstakingly created matters to their day to day decision making.A business is singular not pluralOne of the most common grammatical errors made in financial writing is referring to a business as plural. A business is a single entity, so it is ‘it’ not ‘they’. For example:‘Howe & Co have nine offices across the country and they employ 150 members of staff.’By using ‘have’ and ‘they’ in this sentence we are saying that Howe & Co is plural, however, legally a business is treated as a single entity. Consequently the sentence should read:‘Howe & Co has nine offices across the country and it employs 150 members of staff.’Affect or effect?When do we use ‘affect’ or ‘effect’? This is a common one that can trip up the most confident writer.If we are talking about the act of changing we use ‘affect’:‘How will the increase in the cost of raw materials affect profit?’When we refer to the change itself we use ‘effect’:‘The increase in the cost of raw material has had an adverse effect on profit.’It’s or its?When to use it’s or its is also an easy mistake to make. It’s is used as a contraction or shortened version of it is or it has. The apostrophe takes the place of the missing letters. Read the sentence back to yourself using it is or it has to see if it still makes sense to you. For example:It’s unusual that those numbers don’t add up. Apostrophes are also used to show that something belongs to someone.If the Sales Manager is responsible for the budget we’d say: ‘The Sales Manager’s budget‘ with the apostrophe indicating that the budget belongs to the Sales Manager.The exception is when making its possessive. We don’t add an apostrophe in this instance.For example:‘The business published its Financial Statements’If we were to add an apostrophe to its in the above example we would be changing the meaning to:The business published it is Financial Statements which of course doesn’t make sense.Principle or principal‘Accounting principle’ or ‘accounting principal’? To quote a colleague, “this drives me nuts. The number of times I read accounting principal when it should be accounting principle. Professional accountants should know which one to use.”‘Principal’ is the term you’re most likely to use in your work.‘Principal’ is the initial amount of a loan.‘Principle’ is a law or a rule.AbbreviationsWhen I was a trainee in practice one partner would not let any letters go out to clients if he felt the wording of the letter was ‘casual’. This included the use of abbreviations such as:I’myou’redidn’tcan’tThese are all acceptable to use in informal communications such as emails but when you are writing formal reports and letters err on the side of caution by using unabbreviated words. This maintains a professional tone.Exclamation marksWho hasn’t added two or even three exclamation marks to a text or a Facebook post to emphasise a point? While exclamation marks are fine in informal communications to convey humour or surprise they should be used very sparingly, if at all, in professional communications. It is hard to think of any instances where an exclamation mark would be needed in a financial document.ChecklistAlways run spell check, however, do make sure that the change suggested is valid. I can’t count the number of times I have seen ‘manger’ instead of ‘manager’.If you know you often make the same mistake identify all instances of the word or phrase with the find function (Ctl+F) to check you have used it correctly.If the document is important, and particularly if it is being sent externally, ask someone else to check it for you – a second pair of eyes will often see things that you have missed.Browse the full range of AAT study support resources here Jo Osborne is an author and editor for Osborne Books and is also a content specialist at Mindful Education. She qualified as a chartered accountant with EY London and after a variety of accounting roles taught AAT at, what was, Worcester College of Technology..