Article Description:
Whether a manual or computerised accounting system is in use, an accountant's or bookkeeper's job can be made much easier if he or she has reasonable to expert skills in the use of spread-sheets.
Article Body:
The efficient use of spread-sheets can be of immense benefit to both basic bookkeepers and high level accountants, as well as to all levels in between. There are two main areas where a skill in the use of spread-sheets will prove to be beneficial to bookkeepers and accountants of all levels. These areas can be classed as "Pre General Ledger" and "Post General Ledger". In both areas, the knowledge of V.B.A. (Visual Basic for Applications) will be very useful to automate repetitive tasks, although, even without macros, well designed spread-sheets with relevant formulas will simplify and speed up many tasks. Lotus 123 macros, are much easier to create than V.B.A. macros, but now Excel seems to have become the "industry standard" the creation of macros require a knowledge of the more difficult V.B.A. It is recommended that, in an organization of any size, with an accounting department of (say) five people or more, at least one staff member, who need not necessarily be the department head, should be given the opportunity to gain the skill of writing macros using V.B.A.
1) Pre General Ledger
Some examples of tasks in this area of accounting are set out below.
a) Salaries and Wages
Spread-sheets can be a great substitute for specially written software for the calculation of wages and salaries, especially if the payroll is not particularly large, say less than 50 employees.
b) Cashbooks
Now that online-banking has become so popular, many sites give the user the option to download transaction lists in Excel readable formats. Quite often the format used is "C.S.V" (Comma Seperated Values) but Excel can easily convert this to the normal "xls" or the more up-to-date "xlsx". In all probability quite a lot of formatting will be required to make the spread-sheet more readable, but a V.B.A. macro could be written to do this automatically. Very good spread-sheet designers can even automate the allocation of common types of expenditure into individual columns to reduce the amount of posting into the general ledger, and, indeed, some more sophisticated accounting programs can accept entries directly from spread-sheets.
c) Fixed Asset Registers
Fixed Asset Registers are ideally suited to spread-sheets. The calculation of depreciation can be done with formulas in whatever style the organisation's accounting policies demand, and journal entry formulation can be automated.
These three examples are only the tip of the iceberg when it comes to tasks that can be simplified and speeded up with the use of well-designed spread-sheets, whether they use V.B.A. macros or not. The pricing of goods, jobs, or services is another area where spread-sheet skills can come to the fore. But it's not only pre general ledger tasks that can benefit from the use of spread-sheets. Read on for examples of tasks that can be simplified after whatever system is in use to produce the trial balance.
2) Post General Ledger
Many more sophisticated computerised general ledger packages include an integrated report generator. These vary in flexibility and ease of use. In many cases it is easier and more flexibility can be obtained by exporting a trial balance into a spread-sheet and then, either manually or using a V.B.A. macro, format reports using the spread-sheet software. Another benefit of using spread-sheets to generate reports is that it is easy to produce graphs to highlight important points. Some reports that derive their figures from general ledgers and can be formatted using spread-sheet technology are:
a) All aspects of End of Financial Year Financial Accounts
b) Periodic Management Accounts showing current period and year to date figures
c) Periodic Management Accounts showing what percentage each category of sales and expenses are of total sales
d) Periodic Management Accounts showing budgets and comparing actual figures to budgeted
figures either as positive or negative amounts or percentages
So the list goes on, limited only by the imagination of the users and the needs of the organisation.
This article has only scratched the surface of why it is important that finance department staff should be good spread-sheet operators. For example it has not touched on the production of budgets, the production of cash flow forecasts and many other aspects that are important to any well-run enterprise.
About the Author (Plain Text)
Phil Ramage CA (Scot) CA (Aust)
For more information and, if needed, assistance, go to:
http://www.bookkeeping-theeasyway.com
(C) 2011 Philip Ramage All rights reserved
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