How accounts packages are changing. By David Carter | AccountingWEB

How accounts packages are changing. By David Carter

Since the millennium bug there has been no really big technology issue that compels users to go out and upgrade their accounts packages. But don't be misled: the changes currently taking place in accounting software are massive.

On the face of it, the principal changes in accounting software are driven by technology. Looking at the past decade, first there was the change from DOS to Windows in the mid-90s, then you had to have not just any old Windows but real 32-bit Windows; this was followed by client-server and, biggest of all, there was the millennium bug.


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The world is catching up with ERP

David Carter | | Permalink

Bob is right. The ERP concept - order through delivery through invoice to final payment - has been around for nearly 20 years. (I'd go for Tetra Chameleon as the very first, around 1988).

It seems to me that the world is only now catching up with the concepts behind ERP . Soon people will be familiar with the concepts and we'll be able to talk sensibly about ERP at last.

The point about the SAP Roadshows, however, is to show that a new transaction type - Activity Transactions - is required to help the different departments to work together. It will be Activity Transactions that mark out the new generation of ERP packages.

3569787's picture

An old process

3569787 | | Permalink

David's views are not unique or even new. The process of capturing transactions at source and bringing the "accounting function" to the start of the business process, rather than leaving it until the end has been in progress for at least 18 years.

I encountered it in the late 80's when working with SAP. Through the configuration of SAP, it was quite clear that anyone using it as part of their daily job would be functioning as an “accountant” as well as being a sales clerk, purchase order supervisor etc. This is because of the; at the time; novel idea that you design and configure a system so that all the data required to perform the function of selling goods and services right through to fulfilment and accounting is entered; or constructed from underlying table data; at the time of initial entry. Be it a requisition or a sales order. The person entering the transaction is not aware that they have become "accountants", only that the complexity of a transaction has increased slightly.

The accounts office is significantly changed. In place of batching and entering data they became the recipient of data entered by all departments. Their role becomes one of reporting and investigation. Based on their findings and allowing for timings they make accruals, provisions and adjustments before producing period accounts. These last activities being the only "accounts office" instigated transactions.

SAP in its early days was restricted to big business. Now however, the concepts used (even started) by SAP are spreading far and wide so that even small SME's can gain from installing systems that function in broadly the same manner.

So David is right is saying that "accounting systems" are changing. By evolving into what are basically ERP (Enterprise Resource Planning) systems that aim to reduce the level of data re-entry across an organisation and between organisations. The last part, being greatly enabled by the web, e-mail and XML; so that some ones purchase order becomes someone else’s sales order.

Alastair and all those who do not use or understand ERP should take the effort to investigate this OLD concept. As the potential cost savings and improved data validity offered is significant. There is not need to pay large prices for such software, offers Acceptum Business Software in a price range of £2-6,000 for UK SME’s.

Bob Brook

dahowlett's picture

Pitch and punt

dahowlett | | Permalink

Unless you've been living under a rock for the last 20 years, there is nothing new here.

I just wish David would be intellectually honest. He has a pitch - SAP Business One - but this is a cack-handed way of getting it across. Must be too much Walldorf kool-aid.

What's new

PeterCalderley | | Permalink

There appear to be lots of comments about how long it has been possible to do this.

Look at your new car, mobile phone, dvd player etc. These constantly have new features we cannot manage without yet the majority of us don't use them. Is this just another of those features that we can't manage without that the majority will never use?

Sage Accountants Suite

Anonymous | | Permalink

Just as an aside. Has anyone else purchased the supposedly all singing, all dancing Sage Accountants Suite that is supposed to be able to handle all aspects of the work undertaken by accountants in practice, only to find that each element doesn't successfully integrate. Thus making the seamless intergration from time recording through to credit control unworkable. Great idea, but perhaps Sage should have undertaken more testing before it was released onto the market. In our experience, it is disappointing and the help from Sage is poor. Be Warned!

Sage Accountants Suite

Anonymous | | Permalink

I did and I gues like Paul found that it didn't do all it should. I sent it back.

Man made problems ...

Anonymous | | Permalink

One of the problems of the past has been the tendancy to translate inefficient manual process into computer programs; process re-enginnering has quite often been resisted and unfortunately this resistance has moe often than not been advocated by members of the accountancy profession

Therefore inefficienies have been perpetrated into programs and with the inevitable result; but everyone is comfortable - after all no-on really wants their head on the block over change that has not worked

The point about SaaS apps is that by their very nature they are component based and are therefore ideally suited to targeting different sectors/processes within the business

The traditional menu driven approach has evolved because of the profession's wish to pigeon hole areas under meaninful headings - i.e. stock etc. Simply look at any student text book and see how it is layed out

You are quite right about reporting - however, the problem here is that whatever is delivered is invariably not what the user requires; this is why report writers have evolved. No-one is prepared to identify different categories of reports that all business require and those that are 'optional' additional requirements; with the inevitable result that users are constantly re-inventing the wheel. Basically any report that is defined today will already have been produced many times in the past - nothing is new - just not quantified / crystalised.

The reporting arena is where accountants could make a real contribution to the process, however, there seems to be a reluctance to engage by all concerned - therefore the whole thing keeps going in circles!

listerramjet's picture

this raises an interesting question

listerramjet | | Permalink

"Everyone is trying to capture transactions at source". Arguably this is simply about automating a process (or evolution), but when you dig deeper you can uncover the revolutionary processes at work. Budget airlines are a good case in point. Their business model is revolutionary when compared to the old ways. Their cost savings are not about a few automated processes, but about a complete change in process from end to end.

The challenge to accounting app vendors is to unbundle the traditional method, throw away their tendancy to jargon and work out how to deliver and bundle different sorts of functionality in an open source manner, so rather than buy an integrated app that delivers little at big cost, you buy chunks that fit into the different parts of your processes, and make then integrate. I have to say that there is little of this in the market place yet. The most revolution we have is SAAS vendors talking about apps designed for the internet age - but how much of this is marketing hype?

Taking this muse down a level, why should an accounting app consist of purchase ledger, sales ledger, cash book, nominal, POP, SOP, Stock, etc etc etc, and why should there be a next level called ERP - what on earth is that all about (and I won't get into CRM which seems to be a whole new unintegrated issue)? And why does no accouting app deal with reporting - its all data in and little information out! And why should I buy a restrictive licence that ties me in to perpetual upgrades of limited use, poorly functioning software that requires the support of a help desk, constant conflicts with the underlying infrastructure, and poor integration with my other business apps?

"Accounting is at the end of the business process". Oh no it isn't. Its a fundamental and integral part of the whole process. There is a name for businesses that don't get this - ex businesses!

Actually I think that you start to recognise this by the end of your article, and I am looking forward already to the next one.