Today I read a document published by another accounting provider (no name, no pack drill) that tries to teach the basics of double entry bookkeeping to business people.  It’s stated aim is to “help them get a clearer picture of their business as well as reduce common bookkeeping errors that can prove very costly if left unchecked”.

A laudable idea on the face of it, but here is an example of the document’s content: “Traditionally the debit column is shown to the left, and the credit column to the right. That is, double-entry goes to before it knows where it came from, hence the famous t-shirt slogan Accountants do it Backwards.”  In my experience, most business people don’t have the time (or inclination) to understand the basic principles of accounting.  Nor, in my opinion, should they need to understand in order to get a clear picture of their financial affairs.

On the other hand, hiring an experienced accountant or bookkeeper to do your bookkeeping can be expensive, so businesses often like to do some of it themselves.  They almost always want to do their own sales invoicing and perhaps also record their expenses and supplier invoices.  But this often leads to the problem that the document seeks to solve, which is errors that naturally occur in bookkeeping work done by someone who is not an experienced accountant or bookkeeper.  Then the accountant has to work through the books identifying errors and processing corrections, which is time consuming, expensive and generally the type of work that most accountants find frustrating.

But if clients want to do some of their own data entry, how can accountants allow for this while retaining control of the books and eliminating errors before they impact the accounts?  This question was at the centre of our thoughts when we designed e-conomic and it became core to the way that the system works, resulting in a process that allows both client and accountant to play their part without friction.

In e-conomic, accountants are able to ensure that all of the bookkeeping entries created by clients are positively vetted and errors eliminated before they are posted into the books.  Clients can do their sales invoicing safe in the knowledge that all of the accounting policies and VAT issues are being handled automatically in accordance with settings chosen by the accountant.  They can also enter their expenses and supplier invoices under the control of an approval process that locks posting until the entries have been approved by the accountant.  Accountants use the approval process to quickly identify and correct errors prior to approving the entries.

Some accounting software appears to remove the accountant from the process, but this increases the possibility of errors creeping in that need to be sorted out later, usually by the accountant when they come to deal with a VAT return, management accounts or annual accounts.

e-conomic provides a way for both parties to work together in harmony, creating safe and efficient process for both parties.  Clients feel reassured that everything they do is subject to the guiding hands of their accountant.  Accountants can allow their clients to undertake data entry without the books running out of control.

This entry was posted on 11 June 2009 at 8:08 pm and is filed under Market info, Miscellaneous. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.