At the shop I was charged £44.75 for three weeks of newspapers.
The paper costs £10 per week.
Delivery was an additional £3.15 per week.
A rough calculation £13 x 3 = £39 shows £44.75 is wrong.
The assistant couldn’t understand this. After all “the computer gives me the sum you must pay”.
Is this anecdote an isolated story or are we in danger of falling into the same trap ourselves?
That’s accepting values in reports at face value rather than making an estimate of what we would expect to see.
Is this important? You bet.
If you rely on management information to steer a business I think you will agree that that it should be accurate. However I think you will also concede that errors creep in (integrity, assumptions, people).
Estimates are therefore a useful tool in determining whether you can rely on what you get.
In my story I returned at a later time to pay £39.45 (about 10% less).
It’s funny how errors with money invariably seem to leave you worse off if you don’t question them.