Recently a friend ask me to have a look at a set of company accounts setup and run online. It seems that all the transactions are decided and allocated from your company bank transactions. The cashbook has vanished and it seem that all the other info are listed as Split, Unalocated or Grouped. The Expenses and Income transactions are vague to say the least. I will be very grateful if a few of the forums guru's can maybe share their opinions on this the now and future of the bookkeepers world
In theory there is no reason why information cannot be extracted from a bank statement if combined with a credit card also tied to the account which is able to properly categorise all expenses. (a debit card would annul the requirement for a linked credit card so long as the business owner always used that debit card).
Of course, there is an awful lot more to a set of accounts than that. What about things such as depreciation and amortisation? How does one determine to which period expenditure and receipts applies as such must be prepared on an accruels basis.
For quickly and cheaply telling the business owner how much is in their account and how historical expenditure should be classified from such then I can see that being a useful bit of software.
That income and expenditure whilst complete is lost in the numbers makes the software quite useless for producing a statutory set of accounts which seems to be what is being implied by your freind.
Personally I am not seeing that a bank statement scraper would be of much use at all for the suggested purpose although others may have alternate views on that.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Shaun is right. Automation is great but will always need some manual checks. Using filters and referencing will help as much as possible - as the old saying goes, rubbish in rubbish out
__________________
Phil Hendy, The Accountancy Mentor
Are you thinking of setting up your own practice or have you set up and need some help?
If so a mentor may be the way forward - feel free to get in touch and see how I can assist you.
Hello all Thanks to Shaun and Phil for their replies to my posting. I might have given the impression that all computerized a accounting software is bad this is certainly not the case I was trying to put forward.
The point I am trying to find is at what stage does accounting software become a bit misleading and inaccurate in the facts it reports on. I recall reading an article that there are so many accounting software packages on the market that software developers are trying to push the boundaries by adding a whole bunch of gimmicks hoping that the market place would accept them.
Phil I completely agree with you rubbish in rubbish out. But is this not where the problem starts. It is not the computers fault what gets fed into it. So the rubbish in/out bit is a very fair call. Could this not be the very reason then that the new software written is now trying to eliminate that very problem, by trying to do most of the work itself ? Food for Thought. One of many concerns is that the automated system makes it very easy to hide financial and fraudulent deeds. The records and reports I saw from an automated system got me thinking that to produce some meaningful results one would have to start again from the beginning using the original documents as the stuff one could extract from the present records was and could be very misleading.
Please let me have any other thoughts that you have
I think all of us hav computerised accounting packages nowdays such as VT, Quickbooks, Sage or one of the many cloud offerings each of us see's merits and shortfalls in the various packages and decides on the one most suited to ourselves. I'm a VT shop but I would not deride anyone for choosing a different package dependanty upon what they felt most comfortable with.
No matter how one records the data and changes that into usable information the person whose business those finciancial records represent is ultimaely responsible for their content.
Whatever software used must represent the underlying financial affairs of the entity per the current financial reporting standards.
No matter what fancy bells and whistles the software has it must be able to prodiuce those underlying fincnancial records accurately and to relevant standards.
A screen scraper which is how this software was described could not do that. But even that software has a place in manaagement if not financial reporting.
There are new bits of software out there with special innovation in the cloud arena. Also there are new ways of doing things such as receipts processing.
There have been recent threads on the site in relation to Xero and Receipt-bank which are a couple of innovative new products.
I'm more of a traditionalist and too prone to thinking through everyhing that can go wrong but that doesn't mean that I do not see the merit of the new offerings. They are just not for me.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Good Day to you Shaun Thanks again for your input. I like the part where you say and think it is worth repeating.
I'm more of a traditionalist and too prone to thinking through everything that can go wrong but that doesn't mean that I do not see the merit of the new offerings. They are just not for me.
That works for me as well !!!!
You have helped to put the picture into a better prospective frame and I really thank you for your advice. I just do not think that we are ready for that kind of bookkeeping without the banks changing their software to help the process along.
