Perfect Example of Parkinson’s Law

Tim Ferris often writes and talks about Parkinson’s law. Basically it says that a task or project will contract or expand to the amount of time you allocate for it. I believed it was true based on some simple examples in my own life and through reading about others who had more complex examples.

Well the principle is true and let me tell you why. Not that I had any real doubt before, but doing something and saying something are worlds apart.

The example: tax preparation.

My CPA sends a letter that basically says hey your stuff is due March 23rd. Problem-I am leaving for a short mini vacation with the family. A long overdue one. I don’t really have a choice because even if we file an extension the books need updated and the docs organized so an attempt to estimate payments can be made. Bummer- I thought I could sign a form and procrastinate this mammoth project until I came home. In the past few months I had estimated that this project, which I’ll explain below, would take two weeks solid. My wife never totally believed me and turns out she was both right and wrong.

Now let me paint the picture. I started my business in the fall of 2007. I didn’t have much in the way of banking statements or financials in 2007. It was mainly start-up stuff. In 2008, I had a credit card and a business checking account and all the transactions which go with them. I used Quickbooks but not properly. I knew I was balanced through my online banking and register, but I failed to enter all credit card receipts and reconcile them. The same went for bank statements. My CPA told me that it had to be done. Wow-18 months of credit card receipts and bank transactions to reconcile! Then gathering personal tax records (that part was easier as we have a system for organizing them throughout the year), and putting it all together for delivery.

I started at 7PM while watching my favorite basketball team lose in the NIT. Not exactly motivating stuff. I knew that at 9AM we were leaving for Gatlinburg, TN. I had others thing to do as well like packing. This was much easier because we live a simple and organized life, but still it amazed me that it was possible. I starting sorting all the receipts based on credit card or business checking account. I then clipped them together based on the month. All 18 of them. I went back and entered any missing transactions from bank statements, alternating the credit card statements as well. I did this all night and into the morning. I reconciled each statement as I went. I kept 2007 separate from 2008 and from 2009 for filing and tax purposes. To my amazement everything balanced. I backed everything up to a flash drive and looked at the clock-6AM.

I spent the next two hours organizing personal schedule C, D and normal deductions like charitable, medical, etc. I packed and attended to other tasks. I pulled all this together in a package and we delivered it to the CPA firm on the way. A sorry goes out to my in-laws as we did add about an hour to the commute.

So does Parkinson’s Law work? Remember when I said my wife was both right and wrong, well she was. If I had tackled this over a few weeks it would have taken a few weeks or longer. Giving myself no other options but to finish it between 7PM and 9AM, I finished it and I feel like it was a better output as well.

No, I did not drive on the trip and got some good sleep the next few nights. I’ll take that trade-off. No I’m not recommending you batch your accounting annually either- maybe monthly.

Don’t really believe whether a principle works- stop talking about it and try it!

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