Re: Thoughts on Voiding Invoices

["Chris Travers" <..hidden..>]

Hi David,

Ok.  My only issue with the rollback analogy is one that is likely to
run into some disagreement from you.  Otherwise it is a fairly apt
analogy.

The basic issue is that in a typical database design (non-accounting),
you have design according to Occam's Razor (also think of it as the
SPOT principle, indeed I see Normalization as a process of applying
Occam's Razor).  Accounting systems multiply entities in ways which
most DBA's would think was needless, but this duplication handles
issues of error detection and the like.

Most of this argument is about this aspect.  I.e. if you void an
invoice because it was never valid, your data should be to a state as
if that invoice was never issued in the first place.  This means that
items that are of comparable cost and revenue are rolled up into the
earlier transactions and so forth.  Hence the last unallocated cost
rule (items of comparable cost and revenue are generally treated as
bulk items according to this system for reasons I outlined in a
previous post).

Product returns for small businesses are far simpler but for large
businesses are far more complex because of the need to account for the
possibility of product returns in revenue reports.  At some point,
allowance handling would be nice.  As would depreciation handling, and
the like.  But these are at least a ways away.

Hope this makes sense,
Chris Travers

On 9/25/06, David Tangye <..hidden..> wrote:
> On Mon, 2006-09-25 at 07:26 -0700, Joshua D. Drake wrote:
>
> > David, are you not able to abstract things out? The database example
> > above wasn't meant as a database transaction. I was only using the
> > database transaction as a metaphor.
> Yes I can, and I wondered if that was what you were doing. If so, it was
> likely to be more confusing to people, who might not be DBAs. I am sure
> you could have thought up a more relevant example to your argument.
>
>
>
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