Designing an Effective Accounting System

An effective accounting information systems provides accurate, timely information regarding your business while meeting regulatory compliance.  In order to achieve this, organization and systematization is required.  This means that duties must be segregated to comply with internal control guidelines and GAAP.  Another key element is software systems that are integrated that omit manual rekeying of data.  Data structure conventions that mean something to your company, customers and vendors is the most important part of a sound financial system.

In order to achieve the proper systematized and organized Accounting information system, careful planning must happen prior to implementation.  Master files for the General ledger should be departmentalized mirroring your product or service flow sequence.  General ledger accounts must be set up using nomenclature that compliments extensive filtering capability, for example:  (GL account codes=XX-YYY-DDDDD-AAA), where each component preceding a dash means something to you, your employees, customers and vendors to allow for achieving further filtering and reporting requirements; this will lend flexibility to your reporting system by allowing multiple dimensions of looking at your data.

If your company has inventory then arrangements must be considered for data structure in order to effectively utilize filtering fields at the master file level.  In addition inventory nomenclature should be designed by segment:  example (sku=XX-YYY-DDDDD-A), where each component preceding a dash means something to you, your customers and vendors to allow for the filtering requirements; this will lend flexibility to your invetory reporting system.

In cases when your organization operates in an industry that has a National Stock Numbering system, or does business with a vendor or customer that has standards, you may be required to use the National Stock Number or standard as the SKU.  In these instances there are systems that have features to manage such a situation.  However, in the case where you have a canned packaged software system, there may not be a specific feature to deal with this sku issue.  When that situation arises it is simple to explore alternative ways to use the software to attain the accommodation.  This is also why the data structure nomenclature must be considered, in order to accommodate filtering, reporting and compliance.