Can the Buckets!

Why Limit Your View - It’s Your Data!

Certain big providers of today’s financial software continue to wrap a GUI interface around old ideas. Of course they think it’s a great product; you can tell that by the prices they’re charging! They should be ashamed! Let me explain…

One concept is a file architecture that summarizes transactions into what are called “buckets”. Their General Ledger uses period buckets, usually 12 monthly periods. Payroll uses year-to-date and in some cases quarter-to-date, while Accounts Receivable and Accounts Payable are usually only year-to-date. This concept makes any required reporting much easier for programming staff and reduces the number of transactions necessary to provide desired reports. Essentially, the boss is happy because bank auditors have their reports. However, these reports don’t provide meaningful detail information to aid in managing the company.

That was fine for the Stone Age, but not now.

Why is it a mistake to keep using systems based on this archaic method? There are a number of reasons, read on.

Occasionally “buckets” get out of sync when detail transactions don’t equal the summarized bucket total. This doesn’t happen often, but it does happen. If it isn’t a problem why do these financial systems have manually run “reconciliation programs” to re-sync the buckets? You bet it’s a problem and one that is not easy to detect. The software provider will tell you that it almost never happens, but they won’t be standing next to you when the president of the firm calls you on the carpet when his bank report shows an incorrect balance!

Everything has to be posted and balanced (as at year-end) before proceeding with the new period. This can delay reporting on the new period’s information for some time, depending upon the efficiency of the accounting department. This, in some cases, is not just a year-end problem but can occur throughout the accounting-year, reporting-period by reporting-period.

Because of this antiquated design, prior period detail information is usually LOST after a period close, especially at year-end closings. You’ll have summary data available as a prior-year history (again in buckets), but only for the immediate previous year.

This rigid accounting calendar, caused by this bucket concept, locks your company into the financial system’s way of reporting information, as opposed to adapting to your company’s business cycle needs. What if your fiscal year is July through June, but your business cycle is February through October (farming, construction, tourism, etc.)? Wouldn’t it be better to report your business cycle information at whatever frequency and level of detail you need?

What’s the solution? Can the BUCKETS!

Today, with the software tools and hardware capabilities now available, there is no excuse for “buckets.” Work with the RAW DATA! Let software perform data collections that are needed for whatever task is at hand. Develop software that allows the end-user to manipulate data in a form that they can work with. What a concept!

Remember, truth lies in the RAW DATA. We need systems that work directly with the detail transactions that are posted to the system.

It’s time that software developers pull their heads out of the sand and offer software that will provide the tools that we need! We’ve waited long enough! Why isn’t there something better?