Welcome to Central Accounting; so where do you start?
Central Accounting is an Enterprise Resource Planning (“ERP”) application which aims to help you keep track of sales and customers, purchases and suppliers, the goods and services you sell, buy, or make, and people and assets you need to run your business…… oh, and by-the-way, keep accounting records so that the accountant and tax man are happy!
That takes quite a lot of doing to get right, so you need to think carefully about how you set up your Central Accounting installation so that it is always working for you.
If for example all your sales are ‘cash sales’ (where a customer pays you immediately on presentation of the invoice/ receipt), there is no need to set up individual customer accounts, however if you have sales to customers on credit terms or want to keep track of sales by customer, setting up individual customer accounts will be important to you.
And if you have a limited range of non-stock controlled purchases you may be content to set up a consumable stock/ order item for each of the expense codes you use, for example a ‘Stationery’ consumable item linked to the Stationery & Printing expense code, or you may want to set up many consumable stock/ order item reflecting the variety of stationary that you purchase, each with its own purchase price so that you can check the price charged on the supplier invoice against that which you have on record.
With this in mind we suggest the following three steps towards a successful implementation:
1. Read/ View
These documents include a Quick Start Guide, suggested Operating Procedures, and Video Tutorials and we suggest that you review those which cover the topics you envisage will be relevant to your business operation.
For any job, you need to use the right tool, and Central Accounting being a relatively sophisticated application, may be too complex for your needs; that said, there is nothing to stop you using only those parts of the application you need, so please think carefully about what you are trying to achieve, and what you need to use in getting there.
Timing is also an important issue both in terms of when to commence using an application (see ‘cut off date’ in the following section), and in terms of how long it will take to set up the application and for users to become familiar with its functionality: we have attempted to make Central Accounting as straightforward as possible to use, but any new application will take time for users to become comfortable in using, so be sure to plan for thorough training and testing once the application has been set up and configured in the way you intend to use it.
Many older applications require ‘codes’ – codes for customers, supplier and stock items in particular. The Central Accounting application has a sophisticated ‘search and select’ capability, which together with Advanced Search on both customer and supplier listing screen, make such codes less critical. However, codes can still be useful, for example, in grouping types of stock by giving them a common part to their code, or differentiating customers or suppliers with similar names, so it is worth spending some time considering if you require your codes to be meaningful, and if so, what format they should take.
In this application, Stock and Order Items are the goods and services your business sells, buys, or make, and the difference between the stock item types are set out in Stock Types. We would suggest that you consider carefully what items you sell, buy, or make, and in the case of the latter, what items are used to make the make these goods, and have a clear and consistent policy on how items are identified and categorised.
Works Orders can be generated within the application which specify the goods to be made and in what quantity, the items to be used to make the goods and quantities needed, and the process routing required to process these, all based upon the Stock record of the goods being made. On Completion of a Works Order, the goods being made are added to stock, and the items used taken from stock, so the correct set up of Stock and Order Items is critical to ensuring ongoing stock accuracy.
Process Routing, as the name suggests, is the route by which a goods are assembled or manufactured, identifying the Resources needed, in sequence, to effect that process, and time needed to set up each Resource, time to complete the process on each Resource, and indeed any time after processing for the goods to rest, cool down, or otherwise wait, before moving to the next Resource for further processing.
Resources are the facilities you use to assemble or manufacture goods and these can be a single machine, group of identical machines, individual or groups of people, or a discrete unit or department, which can be planned and measured in terms of performance; can you identify the resources within your organisation?
Communicated your plan and use it – make sure everyone who is touched by the new system is aware that change is coming and how it will affect them.
3. Set Up & Training
You will need to enter basic details about the business including address and contact details which will appear on your invoices and other documentation, and this can be done by clicking on Settings, Company Settings, from the main menu bar.
If your business is registered for VAT you will also need to set up the VAT Registration details by clicking on Accounts, VAT Registrations, from the main menu bar.
You should also check that the default VAT Rates included with the application meet your particular business needs by clicking on Accounts, VAT Rates, from the main menu bar.
If you have employees and need to run a payroll, then you will need to set up tax and other deductions by clicking on Employees, Deductions, from the main menu bar, and then the individual employee records by clicking on Employees, Employee Accounts, again from the main menu bar.
Customer and Supplier records can be set up by clicking on Sales, Customer Accounts, and Purchases, Supplier Accounts respectively from the main menu bar, but if you already hold these records electronically elsewhere, you may be able to import the records direct into this application – see Import Customer Records and Import Supplier Records. We recommend that having imported such records, that you then select and edit these records, or at least a sample of them, to ensure the record looks as you would expect.
In this application, Stock and Order Items are the goods and services your business sells, buys or make, including any items you might require as lines on sales quotes, orders, and invoices, or purchase quote requests, orders, or invoices. The essential differences between the types of line item used by this application is set out in Stock Types.
There is also an Import Stock Records guide which sets out how stock records held electronically elsewhere can be imported into this application, but it should be noted that only the basic stock details can be imported in this way, and that it is strongly recommended that stock records are subsequently edited and updated.
The application does not differentiate between raw materials/ components, levels of assembly, or finished stock items, but rather the relationship between a stock item and any components (including other assembled or manufactures stock items) is specified in the Manufacturing tab on the stock record. Therefore the application does not limit the number of levels on a ‘bill of material’, and quite complex assemblies can be set up.
Finally, if you are transferring to Central Accounting from another application, you will probably need to input Opening Account Balances from that application.
We would suggest that this is done at a financial year end, or at least a VAT quarter end, so that a clean ‘cut off date’ can be achieved (i.e. all transactions up to and including that cut off date are in the previous application, all transactions after the cut off date are in this application), and indeed you may wish to plan two such dates – the first as a trial run which will give you the data and system on which to carry out training and testing, and the second as a real ‘go-live’ date at the next convenient date which gives a clean cut-off.
Opening account balances would normally be input at some point after the cut off date using the final ‘trial balance’ from the previous application as the data source, but the application can be used for transactions after the cut off date whilst this data is being finalised.
We would however suggest that individual customer and supplier balances (individual invoices and credits if preferred) are input in lieu of the total debtors and creditors figures respectively on the trial balance, so that subsequent payments can be allocated to the correct documents, and that the bank balance is input as the last reconciled statement balance and individual unpresented/ unreconciled items so that these can be validated against future statement values.
Having completed the above, the application is essentially ready for use, but please remember that time and effort must be committed to both training and testing – we will have extensively tested the software in classic business functions and scenarios but if you use unusual processes or steps, or configure the software in a specialised way then then further checks may need to be made that the software still works as expected – just because it works well at another organisation never negates the need for testing in your organisation!
Neither can our testing include the performance on your own networks and machines which are dependent on a wide variety of external factors, and if user access is expected from special devices such as mobile devices, then these too need to be tested.
Once you have set up and configured the application in the way you intend to use it, we can provide a duplicate ‘test system’ (at no extra cost) for you to carry out training and testing on your own data.
However it is your responsibility to ensure that all those that will use the new system have received training appropriate to their role – remember this isn’t just those that will be keying into the system, but also those that use the outputs such as picking lists and bills of materials.
Also remember training needs to be done at the right time, too early and it gets forgotten, too late and the testing is cut short.
We would recommend that you have a written test script for every business process you use – the script should use realistic data e.g. customer, product, quantities, etc. and also have the expected outcome noted. These scripts will be useful on multiple occasions such as testing the new system, training staff, to bring new staff up to speed, and to re-test following major software upgrades.
We would further recommend that you identify one or more members of staff who will be trained to understand how the software is used for all of your processes (not just for their particular role or function) – they will become your first line of support and the people other users turn to for coaching and solutions.
Especially in the early days of running with the new system, have some manual controls in place, perhaps have a day-book and check that the number of customer or purchase orders received, match the number of orders on the system, do some sample checks of stock – remember that you need to check not only that the software application is working as expected, but that your paper-flow and manual processes are also working in the new world.
If you feel that you need further support then you could review frequently asked questions, visit the Facebook or LinkedIn groups, or contact one of the organisations with whom we have been working to deliver support and training on a one-to-one basis – please note that this is a chargeable service and you will need to agree scope, timescale, and cost, with the selected trainer.
We recommend that you take regular backups of your data by clicking on Settings, Backup, and downloading the file produced to a safe location.