How software undermines double-entry skills

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Automated accounting software has dumbed down the profession to such an extent that many accountants no longer understand the basic principles of double-entry bookkeeping, AccountingWEB members have claimed.

It began last month in the Sage 50 Accounts discussion group with a tricky bit of reconstruction work to reallocate a couple of invoices in a bank reconciliation completed during the previous financial year, but escalated into a diatribe against falling professional standards and the havoc wrought by over-reliance on computer software.

Some members of the group looked for ways to delete and re-enter the transactions to reallocate payments against particular invoices, and another member suggested a way to do this by going into the Sage Maintenance module and editing the transactions there.

But witch-queen, a bookkeeper and Sage trainer advised that while “VAT Cash Accounting in Sage can be a pain, but if you just stop and think for a second, there is always a way to manually correct things. Bank Payments can be reversed with a Bank Receipt (and vice versa) and the corrected transaction entered,” she wrote.

Invoices on both sides can be reversed with a credit note (and vice versa) via the suspense account and the corrected transaction entered.

The episode prompted a rant from AccountingWEB member Lloyd Sherwood. “What really amazes me [is] the lack of understanding of double entry principle which needs to be applied prior to processing of financial data onto a computerised accounting software,” he wrote.

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About John Stokdyk

John Stokdyk is the global editor of AccountingWEB UK and


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By jimeth
20th Aug 2010 10:34

Nothing Beats T-Accounts

I work for a software solutions company.  When explaining the effect of transactions to clients or colleagues, nothing beats old fashioned T-Accounts.

I started my training with a small firm in the mid 80s, spending two years on incomplete records and similar small client work.  The senior partner recommended that I work through a teach yourself basic book-keeping course before my official ICAEW training courses started.  That has stood me in good stead ever since.  When I transferred my training contract to a large international firm a year before qualifying, I found that I had a much better grasp of double entry than my colleagues who had done all their training there.

Similarly, my colleagues who train or assist users on the COINS payroll system, always prefer to deal with users who know how to operate a payroll manually as they understand what they are doing.  Those who have only ever used computerised payroll systems tend not to understand the basics.

The best users of computer systems know how to do the job manually - education and training should take that into account.

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20th Aug 2010 12:22


I agree with Jim. All computerised accounting systems are based upon the double-entry book-keeping system (I hope). It's a very clever system preventing all sorts of errors and fraud. So you should have a basic understanding of book-keeping.

I started my training (in the 80s) doing manual book keeping but double entry & T accounts still come in useful when trying to resolve various accounting and control problems even in large systems.

As a qualified accountant I don't agree that 'accountants are only concerned with the year end figures', if basic book-keeping isn't correct then the year end figures are not correct.

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20th Aug 2010 22:54

Re: How software undermines double-entry skills

Thanks John for expanding this discussion to a wider audience. Not so sure about dropping me in it at the end, but I did say before I posted that comment 'I know I will get called for this, but ....' (Maybe I can feel a name change coming on)

I do not feel it necessary to expand on anything you have said, as I have already done so in the thread where all this started. However, in reply to fionamcke I feel that the way in which my comment in the last paragraph was quoted could be misconstrued.

To clarify, what I meant by my comment was that if a clients bookkeeper where to ask an Accountant, who has never done bookkeeping or used bookkeeping software, how to post something, then the answer they would receive would usually be based on how the entry would affect the year end figures, and would probably result in a journal.

The same question posed to someone experienced with manual and/or computerised bookkeeping would result in a different answer, based on how that single entry could affect several areas of the accounts (depending on what the entry was for) which could include the Customer or Supplier activity/history, the nominals, the bank and the VAT, and would result in real postings not journals.

Both methods would give the same result in the year end figures, but only the bookkeepers answer would ensure that all aspects of the entry had been correctly recorded so that the Customer, Supplier or Bank history were correct, and the entry was picked up on the next VAT return (if VAT was involved). Only the bookkeepers method would result in the 'basic bookkeeping at the year end' being correct.

There are many Accountants out there who know how to do double entry bookeeping, but there are many, many more who do not.

-- Witch-Queen

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