RECEVIABLES AND FINANCIAL ACCOUNTING

FLP^® Receivables and Financial Accounting business model is most suitable for mid-size companies contemplating to change their existing invoicing and accounting system to a world-class system. The business model under this heading emphasizes 'Financial Accounting'. In the last twenty years of the development of computer accounting package, the road is going to a stream of complicating and confusing the real sense of financial accounting.

'Financial accounting' should be straightforward double entries. General ledger is a list of the double entries of the same account. The trial balance, income statement and balance sheet are just a natural result of the general ledger: Trial Balance as a result of the account totals,Income Statement as a result of Revenue and Expense accounts; Balance Sheet as a result of Balance Sheet items.

Too many accounting packages have made computerized accounting IT's way, either by imposing IT procedures, e.g. codes, module, index, updating, etc, or even worse trying to make 'Financial Accounting' function as 'Management Accounting'. It is uncommon to find many accounting packages claiming ability to deal with cost centers, job costing, recurring invoicing and recurring double entries.

Qualified accountants having experience in world-class computerized accounting should understand that financial accounting is financial accounting. Take the above incorrect approach for example, some accounting package requires data entry, say job code, during the double entries. It seemingly looks as if it provided 'job costing' function. Is that real simple in real life situation. Can the accounting package suffice in handling 'job' analysis? Readers should have the conclusion.

We are trying to point out the fact that if a several thousand USD cost of package could handle, say, job costing, job analysis, time sheet, etc, there would not have been so many mid-size companies in trouble being not able to have desired analysis of the job/project analysis and even worse not being able to 'close the year end'. At the time of writing this article, many accountants still have no clue why their books of accounts are not in balance! The reason is the IT professionals, knowing some accounting, have mixed up 'Financial Accounting' and 'Management Accounting'. Unfortunately, many 'experienced' users of entry-level accounting package have forgotten too easily the accounting principles learned in college and university. Financial Accounting is a thing and Management Accounting is another, though through interface and design, various applications (Financial Accounting, Management Reports, Invoice Analysis, Job Reports, etc) can be integrated. How seamlessly applications can integrate is another topic and is not being elaborate here.

If the system is trying to utilize 'Financial Accounting' to facilitate 'Management Accounting/Reports' as well, the result is obvious: Accountants when doing the double entries need to memorize too many procedures in order that various 'Management Accounting/Reports' can be obtained. Bear in mind that, it is impossible to have a standardized data-entry screen for double entries and at the same time cater for all management information.

Take one of the claimed powerful accounting packages for example. They said they offered 'job costing' features. The accountant has to be very smart, and need to be 100% alert. When receiving an invoice, say stationery, the accountant should firstly decide to use 'Project Module', 'AP Module' or 'GL Module' to enter the invoice. We can see from this simple illustration that:
1. The resulting Job or Project reports are too accountant-oriented and serve little purpose to the project managers.
2. The project managers usually do not have right to access the accounting software.
3. Double entries are over-complicated and demand a lot of extra procedures during double entries.
4. Data-entry is duplicate in several modules. Many non-accountants may think we are exaggerating this point. Your accountants should tell the truth.
5. Some package forces a project to relate to a particular cost-center, but real life is not this simple.

FLP^® Receivables and Financial Accounting business model does not play gimmick and stick to the fundamental. The fundamental to financial accounting is: financial accounting is financial accounting. Many accounting packages failing customer expectation is due to overambition trying to mix 'management accounting'/'cost accounting' ingredients to 'financial accounting'.

The accounting systems of the large multinational enterprise have one thing in common: financial accounting is financial accounting, while project, job and management accounting, e.g. which product best sell best, which department achieves the highest turnover in which month, project performance, are being handled by other interfaces which then integrates seamlessly with the financial accounting system.

Some evaluators of FLP^® Accounting Manager commented that FLP^® Accounting Manager is far too simple. The FLP^® Development Team, rather than feel disappointed, say thanks for their comment. We take this a positive comment as it proves that our design is neat, clean and straightforward. Accounting has its history for over 300 years and financial accounting ought to be this simple, debit and credit. FLP^® Accounting Manager serves exactly this purpose. You input debit and credit. FLP^® Accounting Manager does the rest. FLP^® Accounting Manager does not attempt to mix up job costing, project costing or cost center with financial accounting. This does not mean FLP® solutions are incapable of handling so. Through the revolutionary design interface of 'FLP^® Account Entries Handle', complicated events, e.g. project, being handled by FLP^® Project Manager, will trigger desired debit(s) and credit(s) with options automatically or manually, which are well linked to FLP^® Accounting Manager.

Note that FLP^® methodology does not require updating or duplicate sets of double entries. This is also why your books of accounts are always balanced in FLP^®.

The above briefly elaborate that FLP^® Accounting Manager looks simple, (in fact needs to be this simple), but the back engine allows all FLP^® solutions link appropriate debit(s)/credit(s) to FLP^® Accounting Manager through ' FLP^® Account Entries Handler'.

Following the reasoning above, you will now understand why invoicing or billing is not done and shouldn't be done in FLP^® Accounting Manager. Worldclass IT applications will not do that, nor will FLP^®. Invoicing or billing is done through FLP^® Accounts Receivable Manager. Issuing sales invoices is natural in FLP^® Accounts Receivable Manager. Imagine you take out your preprinted 3-ply sales invoices, write the customer name, salesman name, project name, commission rate, product name, amount, etc. Do the same but now electronically with FLP^® Accounts Receivable Manager. 'Type once, use many, many can use' is the norm with FLP^®. Simultaneously on the collaboration and groupware platform, all staff if having appropriate access rights, can get what they get: top salesman in month, best selling item, sales by month, job costing, outstanding invoices, customer outstanding by how much, invoice balances, commission by salesman by month, and more you can demand. Don't miss out the fundamental: debit and credit are done in FLP^® Accounting Manager while management reporting/analysis are done separately.

Direct Account Name and No Code Necessary
FLP^® Accounting Manager uses account name directly and you don't need to remember codes like '11011'.

No Posting
You data entry debit and credit and FLP^® Accounting Manager will do the rest.

Account Entries Handler
FLP^® Accounting Manager truly integrates with all other FLP^® solutions where relevant transactions attracting accounting treatment will get through 'Account Entries Handler' to automate debit and credit.

Reduce Operating Costs
Your accountant will not need to work overtime, yet book of accounts are always balanced.

Multi-User and Multi-Company
The FLP^® Accounting Manager and Accounts Receivable Manager support multi-user and multi-company.

No Physical Boundary
FLP^® Receivables and Financial Accounting business model allows you to install a server in one location and different departments in various locations or countries can access to the server.

FLP^® offers rapid application development to meet your distinct needs.
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