Re: Fwd: Article on Accounting

[beamends <..hidden..>]

On Sun, 2008-06-01 at 10:49 -0700, Chris Travers wrote:
> This was recommended to this list.  I looked at it and it seems to do
> a reasonable job of looking at issues of accounting software.
> 
> ---------- Forwarded message ----------
> From: benjamin barker <..hidden..>
> Date: Sun, Jun 1, 2008 at 5:14 AM
> Subject: pretty good
> To: Chris Travers <..hidden..>
> 
> 
> Nice article on accounting, a few of the list-readers could use it :P
> 
> I'd post but the ledgersmb list doesn't like chinese ip's ...
> 
> http://www.asifism.com/news-about-this-site-and-me/accounting-quickbooks-sage-peachtree-or-microsoft-office-accounting-part-one/
> 

Unfortunately the author makes the same mistake as so many do - failing
to separate day-to-day operation of the business from accounty type
things (depreciation) which are only visited a few times a year. 
The after asking round a bit, it seems the vast majority of small
businesses (>3 employees) have no computer system at all, pay a
book-keeper to enter things (they don't know, or care, what into),
and see their accountant about twice a year (end-of-year and when the
but a "new" van or such). They have no interest in accounting whatsoever
(after all, they pay their accountant to do that, just like they pay the
garage to service the van - they neither know nor care how the van works
as long as it does). 

Businesses in the 3 to 10 employee seem to operate pretty much as above,
but typically do have a computer or two, running something like Sage,
but only use it as a glorified spreadsheet.

I think there is a huge barrier between those of the accountancy
persuasion and those who are just running their business. By that I mean
those in skills based industries where producing a quote may well be a
long time and be work in itself, and there may not be many of them, or
who are interested in accounts, operate in a totally different way to
those who retail. Small UK retailers buy stuff in, and the hopefully
sell it, and the owner is directly involved. There's no room for looking
for fancy tax breaks - everything is well understood and established.
Things such as depreciation rates are available from UK government web
sites, and for most things, vans and plant, rates are fixed.  You don't
actually need an accountant, even when a Ltd Co. until you reach the
threshold where independent auditing becomes mandatory.
The owner knows what's going on because he's there going it. Reports are
fine, but more often than not they will only back up what the owner
already knows. There is no need to try an operate a small business as
though it were Megacorp. We've just had a very quiet week. It happens
now and again. No amount of analysis is going come to any other
conclusion.

In short, for a lot of small businesses, there is no need to understand
accounts, except in the most general sense, but there is a need for
software that allows simple day-to-day operations with access behind the
scenes when required. There has been very little attempt to cater for
this market, hence why so many small businesses still operate manual or
spreadsheet based accounts.

In the context of the article linked to, Sage has got an awful lot to
answer for when it comes to usability!

Cheers
Richard 



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