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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