How to Build A Near Fail-Safe Accounting System to Reduce Costs and Increase Productivity
By Ken Garen, CPA
The Holy Grail of accounting systems is one that “just works,” every time and without fail, with great efficiency and small hardware requirements. The system must have significant reliability, and procedures and processes should cross validate on a constant, ongoing basis. This is our quest and can be our accomplishment.
Constructing a near fail-safe accounting system is like putting together a jigsaw puzzle; all pieces must be present and carefully placed in order to create the big picture. With accounting systems, one has to take all of the following pieces into consideration: software capabilities, hardware capabilities, training and internal procedures, support and strategic planning; AND these components must all fit and work together to create an efficient, reliable program that will take your firm’s productivity to the next level.
Accounting Software
Two words - bullet proof. Most importantly, accounting software must be written to protect against data corruption, meaning data should not be stored in a database, but in a mainframe style ISAM (Indexed Sequential Access Method) data file instead. Database design that places all information in a single database does not provide easy recovery if needed. In a worst-case scenario, all data in the database can be corrupted, with the only solution then being to bring back the last known good data and re-enter everything after the fact all over again. Solid design allows you to recover just the area that needs it. In addition ISAM data files can be copied from one operating system to another and used as is, while databases must be converted.
Properly designed accounting software will have diverse types of data stored in different files. This is beneficial so that, for example, “current” entries will not need to be re-built if they are fine in the event of a major data file corruption. The most sophisticated accounting design will allow for data files to be “re-combined” as the need arises. This can help solve a variety of problems where pieces of a data file set are good from different days.
Also, the ability to easily change existing entries that are still “open” is very important. This is best accomplished if the accounting software is real-time. With a real-time application, an update is not needed to see the results of the entry and the user can instantly determine if a correction achieved the desired results.
Great accounting software should have an operator-by-operator defined interface with user defined short-cut keys so that the software seems “natural” to the user. This includes the type of screen (Graphical or “Green Screen”), screen colors, implied decimal points and even the placement of negative signs. This level of user control leads to reduced errors and a “quick fix” for those mistakes that do occur.
And, all of this should happen in a true multi-user environment, where people can be simultaneously accessing the same data files over a LAN, WAN and/or the Internet.
Accounting software should run on all 32 and 64-bit versions of Microsoft Windows®, Linux and UNIX®. This way, as accounting needs change, all data files and programs can be moved to their new home without any re-training or cumbersome data conversions. To be most effective, keystrokes need to be identical on all operating system platforms. For a true “plug and play” system, accounting software must run completely independent of operating system settings, such as registries.
In addition to portability, an important long-term issue is the ability to transform data. As business needs change, highly developed accounting software programs will allow for the “re-numbering” of general ledger account codes, employee numbers, labor distribution codes, etc. This “re-numbering” will ensure that all new business needs are met with the existing data. This allows you to simply re-use your current data in a new way, saving huge amounts of set up and data entry time.
And, as your business and client base grows, be sure that your software vendor can provide custom programming. If your software vendor does not provide this service, you are less likely to meet your future clients’ business needs.
Hardware
A good hardware system must have redundant everything, including power supplies, hard drive controllers, CPUs (Central Processing Unit), NICs (Network Interface Card), Internet service providers, battery backup, RAID (Redundant Array of Independent Disks) or striped disks. Even the servers themselves should be stored offsite, which can be extremely beneficial for disaster recovery and planning purposes.
A very frequently overlooked redundancy is to have multiple “pipes” to the Internet. For example, different service providers frequently share the same fiber optic cable. If the cable is cut, your Internet service will be down with all carriers that use that cable. So, satellite and/or dial up are viable “real” redundancies.
If there is an option within your operating system to have the “lazy write” turned off, it is recommended that you do so. Lazy write saves up data to write when it is most convenient for the operating system. If information recently created is requested before it is written to the hard drive, then the information given will be “old” data. Also, if a system “blue screens,” any data that is not written is lost. It is best to keep the unsaved data to a minimum.
Data should always be backed up using multiple types of media, with each backup tested regularly. An Internet accessible backup, in addition to tape and/or DVD, is recommended. The online backup can be scheduled as often as you want. This will allow you and your staff to access company and client data from any location with an Internet connection.
Unless you have a large IT department, outsourcing your server to a hosting service is the way to go. In doing this, you can satisfy most of today’s hardware ‘best practices,’ without the heavy investment in time and money.
Lastly, be certain that your original installation keys and CD’s are always available, should they be needed in the event of an emergency.
Training and Internal Procedures
Training sessions must be done regularly and often. Redundancy is also critical here, so be sure that there are at least two people that are trained to perform each and every task in your accounting software and hardware areas. Be sure to have each “alternate” actually complete the tasks that they are trained for on a routine basis, as knowledge that is not put into practice often disappears. This way, should an emergency arise, everyone will then be able to hit the ground running.
Support
Proper support is critical for a near fail-safe accounting environment. Make sure that help is available whenever you may need it - 24 hours a day, seven days per week - from both your accounting software and hardware providers.
Check that your customer support representative is sufficiently skilled and communicates clearly. Offshore support, although common today, can at times be very problematic and should be avoided if possible.
Vendors with online support forums can also be helpful in that you can access information regarding other user instructions and experiences.
Support requests should be taken via telephone, email and/or fax. Training should be provided in Web seminars and/or face to face meetings. Look for vendors that offer guaranteed response times and easy-to-use escalation procedures for faster response if needed. Escalation is critical should you have a problem that is not being solved by the entry-level tech that you first speak with.
Planning
Strategic planning is an essential element in creating and maintaining a near fail-safe accounting system. A clear road map of where you are and where you expect to be in the short-and long-term is of great benefit as your on-going journey progresses. In addition, you should inform each provider of your plans, so that they can give you the most appropriate service and best advice. The more details you can nail down, the better off you will be.
Although it may be impossible to create an 100 percent fail-safe accounting system, better informed choices are a step in the right direction on your journey to a “near fail-safe” system. As your business needs evolve, make sure each component of the system you choose works together to drive your firm into the future.
About Author:
Ken Garen is President of UBCC (Universal Business Computing Company), developer of accounting and payroll solutions for accounting firms since 1981. For more information, call 800-827-8610 or visit http://www.ubcc.com
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