Re: More user cases where editing is nessesary

Again some notes regarding how I think the system should handle these cases. Feedback on that is welcome of course.

On Sat, May 21, 2016 at 9:56 AM, Peeter Pärtel <..hidden..> wrote:

Hello once again,

I ask some questions from my accountant about cases when she uses editing.

But before we go into that, I really appreciate the hard work Erik and others have done and all I say here is meant as discussion points not critique. Also, we are really stuck with 1.2 version... which has not been developed many years already... one side it's great as everything works the same way all this time. Less time needed from my side to support users. But I question... how long it takes before something happens.

So I read Erik's answer to Marjan: "Some background: while the people speaking up here generally work for single-person businesses (by their own words), LedgerSMB is also being used by businesses (of o1bigtenor seems to be an example) who *do* require these anti-fraud measures, audit trails and cumulative-only posting system."

Ok so let's look at the issues of all these voided transactions in the reports.

On one hand for a one person business, there isn't an embarassment factor.

On the other, you still have two problems in these cases that are worth considering:

1. You have the "report current documents to the tax authorities" issue which is a very real one and

2. You also have the issue walking through mistakes, where they are not relevant to what you are looking for, is distracting and can make it harder to see what you are looking for.

I think the answer there is we need to capture more information and allow better void tracking so that this doesn't have to be a problem point.

This is BIG. We use LedgerSMB mostly as one person system. Or two person... one enters data, the other checks afterwards.

Funny you mention the two person approach. This is *exactly* what the draft and voucher systems are supposed to address.

In these cases you have the person enter the data as a batch (of vouchers) or as a series of drafts. The other person reviews. Drafts are editable as are vouchers. But they are not a part of the financial record yet. Then one approves the batch or the draft and the changes post to the accounting books. My thinking is we want to build on that structure and make it more and more usable.

Now, we both know that mistakes happen and that it is possible for the one checking the data to approve the wrong data, which is why one can still void *after* approval. So it is not perfect, but it is transparent and a lot better than just saying "once entered you cannot fix"

Also on BIG piece of information I forgot before - most cases we use LedgerSMB to do accounting after the fact. That means our clients use their own systems or just excel or libreoffice calc and they bring us all their sales invoices and purchase invoices once a month or once a year. My person just enters all of it to LedgerSMB, so we would get balance sheet and income statement. None of this information is sent to clients. They already have their invoices. When we do it once month, then VAT report is also generated based on data from LedgerSMB.

So when they do mistakes, these are mistakes.. they just entered the wrong date... wrong number... wrong client... wrong account... editing this document doesn't affect the original document.

My accountant gave me some examples... she was entering yesterday data for different customers... for one she was doing annual report for 2014, for another 2015 and for next one entering data for april 2016. So by entering 2014 she entered six documents with 2016 date by mistake. After she was checking work done, she found these mistakes and repaired the date and saved these documents again. All done, all correct. In the end 2016 is empty. Doing it like Erik suggested using credit invoices would leave some data to 2016 period which has nothing to do with it. Sorry, nothing personal, this is just real life.

Right. So the first question is:

how much does the review and approval process buy you in this regard? How often are the issues quickly caught? And how often are they caught some time later? If they are caught immediately then we already have this supported in 1.4. For ones caught down the road (say, after you sent the invoice to the customer) then that is a different scenario.

There is a huge difference between correcting an invoice you just entered and are reviewing before you post and changing the amount on the invoice that was sent to the client already.

Another BIG one for us. We do accounting also with some other programs like HansaWorld. We have built up our pricelist so that when we use something else than LedgerSMB it's double the price. We measured how much time it takes to enter data into LedgerSMB vs HansaWorld and LedgerSMB takes half the time generally. So we offer better price based on that... we charge for number of entries. Moving over to work process mentioned by Erik would mean that it would slow work down to the same level like it is with other programs. Can't do it. That would mean hiring more people or letting half the customers go.

What I would like to see is a button that allows you to re-enter and void in one button click, along with options to hide voided invoices (and voids themselves) from the search reports. This keeps transparency and it should support your workflow.

But I give You some more real life cases... maybe these help to understand different situations... it's not a final list... these are just the cases that I got as examples from one of my accountant...

With purchase transactions she choses one account at first and in some cases it needs to be changed afterwards. We also use expense account like "Document is missing" and then in the end send this list to customer ask for documents. When we receive them we change the account and save it again. Some times we check and change things in the end of year when customer decides some thing need to be assets not expenses or opposite.

Ok. Drafts are a perfect fit for this. You enter. Save. Ask the client for information. When they get back you edit and approve. And then they are part of the books. Again drafts can be edited until they are approved.

Next one: double copies of client / vendor. Quite often it happens that for various reasons there has been saved the same company for multiple times. So when it comes out we resave documents under one customer or vendor and delete duplicate.

Yeah, we need a good solution to this one. This is one case where I have been known to break indelibility rules in the past :-P

Another BIG one: VAT
Invoice has one date, but expense is for another period.
Example: Invoice is sent out on 10th of May for services in April. When Invoice goes out it's ok to have it with May date, but for VAT purposes it has to be declared for April. So we change the date later on to 30th of April, so it get's to be in the right period. This is actual demand from Tax authorities that this invoice is April declaration.

But they need the same date from both parties on the invoice? Or not?

Maybe we need another date field?

I have seen in some programs that they have two dates for each document. One as Invoice date and another for VAT purposes.

Sounds like a good solution. If the expense is for a different period too, it occurs to me that it might have other implications as well (regarding being able to automatically amortize for example). I think we really should have a discussion as to the relationship here.

Another VAT issue: LedgerSMB doesn't know the difference between 0% VAT and VAT FREE.
So far we have handled this issue manually, but it's a huge difference. For those who don't know the difference, let me explain as short as I can:
0% VAT is mostly export inside European union or outside and it gets declared separately. It doesn't affect purchase VAT.
VAT FREE is completely different. It is applied for rents (real estate), investment gold, postal service, insurance, interest, etc. When company sells VAT FREE then for purchases related to those activities they are not allowed to ask back VAT.
And our "favorite" - mix of both type of sales, both with VAT and VAT FREE. Which means for some purchases 100% VAT gets asked back, for some some other percentage and for some nothing.

hmmm we can't do that with our tax system but in 1.4 I think we could use business reporting units to do this. It would not be perfect by any means but it would be much better than we have now.

To bring it all together:

As one-person system we need editing of all documents.

For mid-size companies where are many employees they need to have zero possibility to change something after the fact.

Can both of these scenarios exist in LedgerSMB? Or we also better start looking for something else which fits with our one-person system needs.

Workflow and autidability are separable concerns. I would rather focus less on "can we edit documents" and more on "how can we work efficiently."

However to repeat: you CAN edit documents in LSMB until they are posted. The question is, in addition to that, what do we need to do to make the system able to help you work effectively and efficiently?

LedgerSMB user right from the beginning,

Peeter Pärtel

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