Up The Asset: Modern Accounting on the Open Web | Hacker News Reader

Up The Asset: Modern Accounting on the Open Web

blog.zacharyvoase.com

36 pointszacharyvoase20 comments

>The advent of the computer should have been enough.

The advent of the computer revolutionised the accounting profession. Gone are the thousands of accounting clerks who used to laboriously update ledger books and sum up figures. Accountants are not bookkeeepers.

> By modelling a company as a complex information network, the in- and out-flows of each part of the business will act as signals and semaphores revealing reckless spending, potential embezzlement, or unsuccessful ventures. Collecting information allows for an empirical, scientific approach to management, based on actual performance, and backed up by numbers.

This is what accountants do. But the world is filled with ambiguity and unusual corner cases. Accountants organise all the monetary relationships of a business into a hierarchy, and like any hierarchy, it has annoying things that could fit into one of several places.

Part of accounting is to identify these anomalies as they emerge (and given the indefinite complexity of the economic world, they emerge constantly) and to come to a consensus on them. This is the source of the GAAP and IASB standards. This is necessary so that accountants can communicate information to each other in an honest, comparable fashion.

It is a profound and common mistake of software types to say: "that's stupid. That's simple. I could reinvent that, 100x better, in a weekend!"

Well good luck with that. (Sometimes they're right. But rarely).

> Unfortunately, the landscape of publicly-available accounting software is rather poor.

This may be true down the bottom of the foodchain, but accounting software gets profoundly sophisticated as you move up to larger and larger organisations.

Like lawyers, we in software engineering are smugly certain that ours is the hardest of professions, ourselves the brightest of the professionals. Self-serving, chauvinistic tosh. We could use a bit more modesty. Refer to the Tao of Programming.

Everything looks simple and easy from the surface.

Nine times out of ten when I hear a developer (or engineer, or lawyer, or wall streeter, or doctor, or contractor, almost anyone) saying something else is trivial or easy, it says a lot more about how little the person knows about the subject matter than the actual complexity of the subject at hand.

I can't think of one thing in my life that is gets simpler as you learn more. It is all corner cases and esoteric solutions to non-obvious problems as you get more advanced. Engineering, software, math, physics, language, philosophy, economics, politics, design, and every single sport I've ever played (not to mention most relationships) only seem to get more complicated the deeper you dive into them.

How does politics get more complicated as you drill down into it?

Its about getting as much as possible for your self while giving all the blame on the "other" group.

I agree with the other examples you have listed, but politics isn't nearly that complicated, nor are those involved smart.

> How does politics get more complicated as you drill down into it?

Speaking as a former student politician and candidate for Parliament: yes. Yes indeed.

Aside from being written in compiled languages, are Ledger and hledger not a good starting point? https://github.com/jwiegley/ledger/wiki http://hledger.org/

Yes! I came in here to recommend those, too.

I was about to re-invent that wheel, too. See http://thoughts.pro/beekeep/

But when I heard of Ledger I abandoned it. A lot of great work has been put into Ledger.

UpTheAsset looks like a great project, too, but someone should be fully aware of Ledger before reinventing that wheel.

Actually, the record-keeping party of accounting is simple and most accounting software packages store their data in much the same way as this post is proposing.

The complicated part of accounting, and the reason why we need actual accounts is the regulatory issues surrounding money and how to manage/tax it.

Real accountants (not just book-keepers) provide 'advice' on how to handle money, they don't go around balancing books and shuffling paper. This may have been what accountants did in the 1950's, but computers made all this 'busy' work obsolete and left them to do what humans are good at… thinking and problem solving.

Financial reporting for large multinational enterprises is decidedly non-trivial - of course each individual part is fairly simple when looked at in isolation but the complexities soon multiply up - especially as data is highly dimensional (at least 12 dimensions are common) and also hierarchical.

My roommate in college was an accounting and comp sci double major. He became an accountant after college. Never have I heard him say "you know, I could replace my entire job with a computer program". Nor have I heard him really complain about the software he uses at work.

This makes me think the problem isn't really with the software available to your average full-time accountant.

Maybe the real issue lies with small businesses that need some accounting, but it is not what they do 100% of everyday (but isn't that what Quickbooks is for?)

But is there really a problem with modern accounting systems?

very interesting. I wonder how much more code I'd need to write to use this as a backend to handle billing my customers?

I've been looking for a simple billing component that I could then link in to the rest of my system to handle billing, rather than the large, complex and difficult to modify integrated provisioning, billing and management system I currently use.

> I wonder how much more code I'd need to write to use this as a backend to handle billing my customers?

More than you'd expect. Plus you are now relying entirely on yourself to remain abreast of changes to the law and accounting practices.

The division of labour is not some kind of personal affront to programmers, mate.

The job of the billing system is not to "remain abreast of changes to the law and accounting practices." That's the job of the accountant. I have a good accountant. The job of the billing system is to keep track of who owes me how much money.

I mean, I have an accountant for dealing with the law, with deprecation, and other more complex subjects. but I'm not going to make my accountant bill an $8/month customer.

So you want to keep your books, is that all? Because in fairness I wouldn't fiddle writing software myself. I'd rather use Xero or a POBKS* for something like that.

(*) Plain Old Book Keeping Service

well, my sister does the bookkeeping that doesn't require an accountant, you know, dealing with buying equipment and such, and we're still sorting that out (I'm having the accountant train her, so it's probably more expensive, for now at least, than a regular bookkeeper would be, but that will change once she's up to speed.) Really, though, that's not the problem. Yeah, I buy equipment every month, but not that much equipment. For a while I was having the accountant do that bookkeeping for me, and it worked okay (though that was a whole lot more expensive than a regular bookkeeper. Accountants charge a lot more than bookkeepers.) You are talking in the low tens of transactions a month, if you don't count my small customers, so accounting for my expenses and income from large customers can be done manually even using rather expensive labor.

But I have a rather large number of very small customers. my median customer is probably close to $8 or $12 a month. Considering that I've got to pay for power/hardware out of that, really, if it requires /any/ human intervention for every monthly bill, even if that human bills me at bookkeeper rates rather than accountant rates, I'll have to raise my prices, probably above that of the competition, which uses custom in-house billing software, as far as I can tell.

I'd consider using a service, in that case. I think Xero does this sort of auto-billing stuff; in Australia MYOB will do it for you also. If you haven't already, consider using a payment gateway service to take money from credit cards.

Good luck with your business.

Have you looked at the subscription billing web services?

Disclosure: I work at FreshBooks.

maybe not as thoroughly as I ought. Last I looked they were better than just a payment processor, but not that much better. Also, while I really like the payment processor and credit cards to be outsourced, the rest of the billing system? I am not particularly comfortable with lock-in.

It's possible that they have data import/export facilities that are reasonably compatible, in which case, I should probably take another look.

Computers should put complexity accountants out of business, it's a shame they haven't did that yet.

This approach seems really implementation oriented.

I'm not sure what a "complexity" accountant is, but there is more to accounting than software. Yeah, you need a bookkeeper to input stuff, and that sort of thing can be automated more and more, but someone needs to actually understand what is going on. Especially when it comes to taxes and the like, the 'obvious' answer is quite often wrong.

Much like programming, in accounting there are many "That word, I do not think it means what you think it means" moments. Sure, if you can put the right numbers in the right boxes, and the computer program was designed to the exact sort of business you have, yeah, it could do a lot of the accounting tasks. But the problem is much more complex than it seems.

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