The Gazette 1989

GAZETTE

FEBRUARY 1989

Doing it: The conversion to a computerised accounting system or transfer of any records from one system to another is fraught with dangers and difficulties. The transfer of information has to be recorded in a meticulously accurate and reliable fashion and the only safe advice that can be given is:- (a) ensure that your existing accounting records are com- pletely written up to date (and cleared of as many dormant Accounts as possible); (b) the transfer of information has to be made from a set of audited balances for each Client and, accordingly, it is very advisable to tie in the transfer of the financial data to the year end, or any other date, when a set of audited balances can be made avail- able. If a set of audited balances cannot be made available quickly, then a balance has to be struck, for each account at a given date and posted to the computer; (c) in advance of (b), accounts can be opened for each Client on the system, furnishing all the particulars you require to identify the Client, leaving the open account ledger ready to receive the financial data when the audited balances are available; (d ) when the balances are ready, they should be transferred immediately. This should be done promply and thoroughly, verifying the balance input against the audited balances being worked from. Speed and meticulousness are the keywords hére: speed because every single case ledger entry from the data of that balance will have to be subsequently posted to the computer and every day or week's delay carrying out the postings will have to be caught up later: meticul- ousness, because any mis- posted balance will subse- quently throw out the balancing of that clients account until corrected; (e) subsequent to loading the financial information, it is advisable to carry the two

accounting systems side by side (what they call the "parallel run") for a short period, say three to six months, until you (and your auditor) are satisfied that your Computer accounting records are thoroughly satisfactory. The Contract: Experience has shown that the transfer from one system to another is a sufficiently important job to consider contracting it out to an independent accountant. Think about retaining an accountant who is not from your own auditor's firm. His or her job will be to:- 1. tidy up the existing accounts before the audit so that the transfer of moribund balances will be avoided, making the transfer operation more efficient. Every dead balance transferred means the entry of unneccess- ary client information to the computer; 2.liaise with your Auditors re. the audited or extracted balances to be transferred to your system; 3.organise the first entry of information to the system, the opening of accounts etc., the layout and set-up of the system, so that it will accurately reflect and present the accounting system that you will be looking for when the trial period is over; 4.organise the posting of Client and Office Account balances, (and all other financial data), ensuring that there is no undue delay, and verifying the balances transferred; 5.update each Client record as quickly as possible, vouching to the practice that your ledgers now reflect the exact position in relation to each financial trans- action for each Client; 6.liaise again with the Auditors and get their confirmation that the system has been success- fully installed and commissioned and is now working satis- factorily; 7.check periodically during the parallel run to ensure that all is going smoothly; 8.set up and implement the new controls and disciplines that are advisable in using your new accounts system.

Fear and Loathing: Consider this course rather than "make do" with your own book- keeper or accountant, who will already be struggling to acquaint himself or herself with a new system and at the same time keeping the existing account system up to date. He or she will already be in fear of the machine, and loathing the boss who put it there. So do you think it is a good idea to burden him or her with all the extra work outlined under the previous heading? Backup: This is one of those "mysteries" of the computer world which will quickly become a hum-drum reality if you proceed. If it does not, you are in trouble already! Your com- puter simply keeps an electronic record of your accounts. Like any machine, it is capable of failing you and in that situation you must have a copy of your accounts records available off the system. Backing up is the process of making a copy of your records, which is stored off the computer. In practice, you have to do it every day and you should have several up-to-date copies of your accounts to hand. You will obtain the additional advantage of being able to store a spare copy of your accounts off the firm's premises as a further precaution against fire. Conclusion: Most of this article concerned itself with advancing the case for computerised accounts on a cautionary basis but, in conclusion, I would like to revert to its opening proposition so that it is not lost sight of. A computerised account- ing system is not necessary where the manual system is meeting the required "targets". The computer accountancy system is not necessary for a firm which is meet- ing these targets without difficulty. For that firm, it is purely a matter of choice. However, for the larger firm, or the firm dealing with a large volume of accounts, computerised accounting represents a more compelling option (but not, indeed, the only one) to recover any lost efficiency in their manual system. If you choose the computer then, hopefully, this article will help your firm steer clear of some of the pitfalls! •

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