An effective accounting system provides accurate and timely financial information while meeting compliance requirements. It requires organization through separating duties and integrated software to avoid manual data re-entry. Careful planning is needed before implementation, including departmentalizing the general ledger to mirror business flows and using nomenclature for accounts and inventory that supports filtering and reporting for employees, customers, and vendors. The data structure must accommodate any stock numbering systems, standards, or software limitations to enable flexible reporting and compliance.

1. Designing an Effective Accounting System
An effective accountinginformationsystemsprovidesaccurate,timelyinformationregardingyour
businesswhile meetingregulatorycompliance. Inordertoachieve this,organizationand
systematizationisrequired. Thismeansthatdutiesmustbe segregatedtocomplywithinternal control
guidelinesandGAAP. Anotherkeyelementissoftwaresystemsthatare integratedthatomitmanual
rekeyingof data. Data structure conventionsthatmeansomethingtoyourcompany,customersand
vendorsisthe mostimportantpart of a soundfinancial system.
In orderto achieve the propersystematizedandorganizedAccountinginformationsystem, careful
planningmusthappen priortoimplementation. Masterfilesforthe General ledgershouldbe
departmentalizedmirroringyourproductorservice flow sequence. General ledgeraccountsmustbe
setup usingnomenclature thatcompliments extensive filteringcapability,forexample: (GLaccount
codes=XX-YYY-DDDDD-AAA),whereeachcomponentprecedingadash meanssomethingtoyou,your
employees, customersandvendorstoallow forachievingfurtherfiltering andreportingrequirements;
thiswill lendflexibilitytoyourreportingsystem byallowingmultiple dimensionsof lookingatyourdata.
If your companyhas inventorythenarrangementsmustbe consideredfordatastructure inorder to
effectivelyutilizefilteringfieldsatthe masterfile level. Inadditioninventorynomenclature shouldbe
designedbysegment: example (sku=XX-YYY-DDDDD-A),whereeachcomponentprecedingadash
meanssomethingtoyou,yourcustomersandvendorstoallow for the filteringrequirements;thiswill
lendflexibilitytoyourinvetory reportingsystem.
In caseswhenyourorganizationoperatesinanindustrythathasa National StockNumberingsystem, or
doesbusinesswithavendororcustomerthat hasstandards,youmay be requiredtouse the National
Stock Numberorstandardas the SKU. In these instancesthere are systemsthathave featuresto
manage such a situation. However,inthe case where youhave a cannedpackagedsoftware system,
there maynot be a specificfeature todeal withthisskuissue. Whenthatsituationarisesitissimple to
explore alternativewaystouse the software toattainthe accommodation. Thisisalsowhy the data
structure nomenclature mustbe considered,inordertoaccommodate filtering,reportingand
compliance.