Tuesday, October 23, 2007

Four Simple Things

Does your company need to financially manage different projects, some taking longer than a year, such as in agriculture or construction?  Does your company have a business cycle that does not coincide with your fiscal year?  Do you have to manage and track many different events each year?

If your answer is, “Yes,” to any of these scenarios, you’re not alone.  Are software applications out there to help manage this dilemma?  Not many, and none I know of with seamless interfacing!  There are some job costing applications, but they’re a lot of additional work and don’t always have the complete financial picture.  The same is true for some project management systems, most of which are usually very structured and inflexible.

The general ledger (G/L) should be the application that you turn to, mainly because all financial data winds up there eventually.  Right?  We’re back to our old problem.  It seems to me that most general ledger packages out there today are trash!  From my past rants you know the following problems:

• Rigid account structure.  You can’t modify account structure (add additional sub-accounts, change the size of account numbers, etc.) once your initial general ledger is built.

• Restrictive calendar.  Usually G/L applications offer only one calendar, and it’s preset for 12 or 13 fiscal year “periods.” What happens if the project lasts for 18 months?

• Lost detail.  Detail is summarized into period reporting “buckets” and then deleted!  You should be able to hold onto the detail, and if you want summary totals on your report, let the report writer do the summarization, not the G/L.

• Statistics.  You can’t measure performance on dollars alone.

That’s it, just 4 simple things that need to be corrected in today’s G/L design, and you’ve got the tools you need.  I wonder when that’s going to happen.