BUSINESS START UP - WORKSHOP - COMPUTERIZED ACCOUNTING

J.b. Data Capture

2. All source entries should be independently totaled prior to being captured. Why, you may ask – the computer should be able to total these things – surely! Of course it can, but what will you balance to? If you have already totaled these entries, once they have been captured, it is that much easier to ensure that you have balanced, each step of the way, rather than waiting to the end and then discovering that nothing balances back to the Bank statement etc. If the batch totals do not balance, ensure that you investigate the error and rectify same before proceeding onto the next batch of entries. It is easier, and prudent, to correct errors as they happen, rather than waiting until later to sort the problem out, as this can impact on any other batches and entries down the line.

3. It is a good idea to keep a permanent record in a register of these batch totals together with a brief description of the entries that were processed. In this way, if there are any queries, say for example, on petty cash, you know exactly which batch to look at, rather than having to look at all the batches for the period. Record the “manual” batch total of the entries, with the computer batch total to ensure that you have captured the entries correctly. Errors, unless they are “finger errors” should be noted in the register, what steps were taken in order for them to be rectified should also be recorded. Should a pattern emerge, this should also be noted and investigated, as this may indicate that fraud is taking place.

4. All batch print-outs should be retained and permanently filed in sequence. It is always a good idea to have both soft and hard copies on hand.

5. Source documents should be:
a. Sequentially numbered and
b. Sequentially processed.
This will ensure that none of the entries are missing or unaccounted for.

6. The type of ledger account and the type of entry must be very clear: i.e. cash, journal, petty cash, fees etc. If entries get mixed up for whatever reason, it would become a nightmare to try and sort it out – better to spend a few minutes before hand making sure that the correct entries are batched together ready to be posted.

7. It is also important for all the audit trails to be numbered sequentially and they too must be permanently filed in sequence (either all together or according to the nature of the entries). This will assist any audits being done, not to mention for query purposes.

8. All batch printouts must be clearly marked with a heading that indicates the period involved, the nature of the entries and the source of the entries. Again, this is for ease of identification purposes.

9. Lists of the business balances must be extracted at regular intervals: this can be done on a minimum of a quarterly basis, but I would strongly recommend that it be done on a monthly basis. This will ensure that there is proper control of the business and will alert you to any problems that may be occurring prior to them becoming a disaster.

10. The total of these lists should be agreed to the control accounts and should also be kept as part of the computerized system. Again, this is for control purposes and it makes the audit trail much easier and queries can be resolved with a minimum of fuss and bother.

11. The balances on the computer control accounts must be agreed, on a monthly basis, by an independent responsible official with the control accounts in the nominal ledger. If you are doing your own books at home, I suggest that you put together a set of checklists and that this is added onto the monthly one. Attached is an example of what the checklists should look like. (See annexure 26 – Daily Admin; See annexure 27 – Weekly Admin; See annexure 28 – Monthly Admin; See annexure 29 – Quarterly Admin; See annexure 30 – Annual Admin.)

12. A permanent record should be maintained of the monthly balances, as detailed in points 9, 10 and 11 above. This will make it easier for the Bookkeeper/Accountant to keep track of all the balances and assists with year- end functions.

13. The information/data on your computer pertaining to your financials must be kept secure on the computer – if you are doing your own books, make sure that no-one else has access to your computer.

14. Your computerized system must generate an audit trail of the following:
a. transfers between loan accounts and personal accounts,
b. transactions processed to the loan account, personal and business accounts (both debits and credits)

15. The above reports must be reviewed regularly by a senior person and this review must be documented.

16. It must be checked that these reports can be generated on a daily, weekly or monthly basis and it is a good idea to ensure that a hard copy of the reports can be regenerated. This is because if the information reported on an audit trail cannot be reprinted at any point in time, there is a risk associated with the loss of such audit trails.

17. It must also be ascertained if the printing or generation of audit reports can be suppressed through a parameter in the application.

18. Programming that is done in-house – the security of the programs must be thoroughly checked, to ensure that it is sufficient.

19. Back-ups of the current versions of the production programs created must be stored in a safe place, in an alternative location. Many people use bank safety deposit boxes or a safe outside of the current office environment.