Added project-based accounting

One of the things that you need to factor in when talking about divisions, projects, CVP, TOI, BEP and all these other foreign terms is the key point.

What is the target market of Manager?

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A lot of the stuff you are talking about is way over the head of just every business owner! Projects need to work for small business owners.

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I think probably the issue is what is SME? Biggest issue is it does not have a universal definition. Manger is FREE for small business but may be paid versions are for all. Manager is useful for many businesses which are growing beyond SME status and Manager seems evolving fast too.

@EPR_Capital I’m not saying your way of thinking is wrong. You just seem to have strong convictions which I do not have yet.

Currently, I’m choosing Divisions and Projects to be separate and evolve independently. They might evolve over time so that distinction will be more clear or they might end up looking almost identical in which case - merging these two concepts into one will have its merit.

I think, as said before, that there are different interpretations of what a project really is. For some it is a discrete job within a business for others like me it is almost like another organization. Given that @Tut confirmed that Manager is aimed at small businesses, I stopped my feedback relating to projects. As it seems for small businesses then EPR_Capital request somehow fits that paradigm.

@eko but Divisions concept is to create mini-business within a business. You can get divisional balance sheet, P&L and in future every other report. Do not pay too much attention to who Manager is primarily marketed to. I’m interested to hear how things work at all business sizes because that creates better understanding which direction to go.

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This is very clear. Thanks a lot. Just noticed, @lubos is celebrating the anniversary here in the forum. Congratulations.

The size of the business is not really the point I was making. The point that I was making is that whatever is implemented needs to be understood by non accountants i.e. people who run their own business. The end user needs to understand how to use the feature. All this talk of CVP, TOI, BEP is irrelevant to most users like myself as it’s all Greek to me - not being an accountant that is.

What I would suggest is rather breaking it down as there is a sense that you cannot see the wood for the trees here. I feel that you are over complicating the matter. What I have listed below is perhaps an over simplification, but it helps to define what the module is and what you are actually trying to achieve by using this module

Define the modules:

Divisions - London versus New York
Projects - House Renovation for Client A is project 1. Jacuzzi and Waterworld Theme Park for Client B is a separate project, thus project 2.
Sales Order - Quote that has been accepted and is now been actioned by the company to provide services/goods to the client.

Once you have defined the modules, then you need to determine what you want to achieve by using these modules.

Function of Module/What you want to achieve with the use of this module:

Divisions - Calculate net/gross profits/expenses etc for London Branch and New York Branch presumably so you can see what is profitable in each division etc, examine why one division does better than another etc.
Projects - Calculate the profit made on Project 1 by determining all expenses and all income related to that project. This will help to ensure that there is a consistent profit margin for all projects and to ensure that there is actually a profit.
Sales Order - To track delivery of goods from suppliers and delivery of goods to clients. Track what has invoiced and what still needs to be invoiced to the client.

By defining the definition of the module and then defining what you actually want to achieve by using the module, you will be better able to work out how to integrate it all together. Using my example, I couldn’t see Divisions and Projects being the same thing for example.

What I have seen using my examples above is that we may be missing a module. We have Divisions, Projects, Sales Orders but nothing in that would track say profitability of electronic equipment compared to say furniture if you are store that sells furniture and home electronic equipment like tv’s etc. So I think there needs to be an Inventory Category tag or something to track sections of the business to determine what is making a profit and what is basically a loss making division of the business. I think that this is what some users are alluding to. But I see that as separate from Divisions, Projects and Sales Orders!

Hope that helps.

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@dalacor We are very much in the target market of Manager. Small businesses form about 90% of all businesses in the world. These tools are needed badly.

@Tut @lubos As per Lubos comment, it would be good to be able to have a “whole of invoice” select button/drop-down to set such things as GST and a Project.

This could be a simple append command to populate all line item fields in one click, BUT still allow for individual adjustments at the line item level … this is about speed & efficiency on invoices with many line items of same types.

The size of the business is irrelevant. It’s the ability for all users to actually use a feature that is important. I hardly consider myself ignorant, but I don’t know what the hell some of the people are talking about in some of the posts above. Hence my suggestion to break it down a bit more simply in order to determine how everything links up. You can’t do that until you have determined what you are actually trying to achieve.

I am not saying that we should not have the project feature, but it has to be relevant to non accountants.

To add to the point that Projects are entirely different from Divisions, here is what I plan to do with Projects.

I plan to use Projects (Jobs) to track performance obligations for Sales Contracts as per the requirements of new accounting standards on Revenue from Contracts with Customers. If the contract has several performance obligations, I will create a Project for every performance obligation and link them to the `Sales Order '/Contract (through custom fields, when they become available for projects). I cannot achieve this with Divisions.

I will only support this if the current way is not removed. To have the ability to select these things on a line item basis is one of the appealing things about Manager.

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Great point @Abeiku. :+1:

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This is the point I was making in my post about defining what the module is and what you want to achieve from it. I think this is where a lot of the problems are coming from as different users want to use the divisions for different things. Hence my suggestion to define what a division is and then define what businesses want to do with a division.Maybe my lack of advanced accounting means I am not explaining what I am saying well. But in short, I agree with Lubos about why divisions and projects are separate.

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I do not mean to be disrespectful to you @dalacor or users with limited accounting knowledge, but the Manager program is based on accounting concepts developed by accounting experts over many years, and it is difficult to have a discussion without reference to these concepts. Sure, most accounting computer packages are developed for the ease of use by operators that have not had formal accounting training, but it is usually expected that the manager of an accounting section in a business would be a trained accountant.

Each module that is added to Manager has some basis in an accounting concept and I think that it is important that the manager of the accounting section of a business has some knowledge about these concepts.

So I would suggest it is incumbent on the manager of a business to ensure that they, or someone in that business is across accounting concepts relative to that business.

Take Cost-Volume-Profit (CVP) which analyses the direct costs (variable costs - cost that vary with the number of units produced [manufacturing] or traded [retail]) with reference to the sales revenue, to get a Contribution Margin to go towards covering Fixed costs (indirect costs/overheads). Break Even Point (BEP) is reached when the number of units produced (or traded) provides a Contribution Margin equal to Fixed costs. All sales (net of variable costs) above this point are clear profit.

I would suggest that the Manager project module, as it is currently configured, is essentially providing the Contribution Margin for a project as it only uses Revenue and Direct costs

Some may want to define a project across a whole division or others might want to define a project for one production line in say, the manufacturing division. So, I think that Projects and Divisions should continue to be distinct modules.

Also, in a not-for-profit organisation, there will be projects to deliver a community program based on either a grant (requiring an acquittal) or set amount from fundraising revenue, that they wish to track so that it remains on target.

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Totally agree, we all have invoices which have a need for more than one tax code or project assignment.

Coders working with the database in the backend use CRUD (Create, Read, Update, and Delete) there can be one button/drop-down which affects all line items to quickly set a default value, then individual button/drop-down on each line which just affects that line item (as per current). Each can overwrite the input of the other.

This is helpful if say >20 lines where all but two lines are the same value, an update all to set the default to all, then tweak the two different ones on their line options.

I think your comment shows a bias. In my experience, the vast majority of businesses in the world have no “accounting section,” let alone a trained accountant to lead it.

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I agree some businesses don’t have an accounting section (although you could describe the “shoe box of receipts,etc” their accounting section), but if you are using Manager you have an accounting section and in most cases this is headed by the proprietor of the business.

So,this is why I also made this comment:

Maybe there is a little bias in my comments, but they were made to convey the message that accounting concepts have been developed for business managers to enable them to get the best out of their activities.

Dismissing the need for reference to accounting concepts in the discussions on this forum is also displaying bias and arrogance, considering that these concepts are an integral part of the Manager program.

I think that the ability to customize Manager helps different types of users to do different things from basic bookkeeping to accounting for tax purposes or preparation for financial performance analysis. If you just record payments and receipts you do not need to have a lot of knowledge about a lot of concepts, but more is rapidly needed when enabling for example invoicing, inventory, etc.

These are few important questions I faced so far.

  • …(few names of other software) have been there for long time, what do you have to say about continuity?
  • Does it have Fixed Assets Register as auditors need it each year
  • Can it be used to provide automatic depreciation on straight line basis
  • Can it show customer and supplier aging and movements?
  • Can it handle projects (costing in particular)
  • Can it handle divisional profitability, assets and liabilities
  • What about payroll, we need this as…(name of another software common in Sri Lanka) does not provide as a one package
  • Can it track inventory items and movements?
  • Show us how it works with VAT returns.
  • Does it has payment voucher and cheque printing direct from the system?
  • Does it has ability to deal with batch posting?
  • Can POS be integrated to system?
  • This is fantastic software (when I demonstrated), since it is online, how can we use to delegate with proper controls?

I believe, these questions all come because of the influence of auditors who necessarily follow accounting principles and laws prevailing in the country over VAT, employment, etc. and because of rapid improvements in tech space allowing business to diversify the business into divisional set up requiring delegated management . Any software with a future sustainability must cater to these needs and flexibility (reducing balance vs straight line, weighted average vs FIFO, LIFO is not supported by IAS 2). If any one look at closely, accounting standards is a part of law in any country which has been given clear reference in Company’s law. As more and more online software coming free for small unregulated businesses, Manger’s fantastic features need to be strengthen to sustain in the SME sector which are increasingly becoming subject to regulatory scrutiny due to the availability of required technology for regulators.

  • Why QB is loosing market? in our country along it looses it’s market because of audit requirements over Fixed Assets Register and Its inability to provide payroll as a one package.
  • Why Xero is not gaining the market? It charges for separate components.
  • Why Zoho is unpopular? Again because of Fixed Assets Register.

Things that was unthinkable in 2019 have become thinkable by now, so Manager community will be benefitted from taking this environmental shift into consideration.

Manager is having an edge over many such features already. Hopefully, Manager can be the leader with few adjustments to deal with control requirements and flexibility. Thank you and waiting to move strongly with Manager.
@lubos @Abeiku @Tut
QR codes is another aspects that is gaining awareness fast which has been anyway discussed.

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@lubos at risk of repeating myself in other topics one of the key missing elements when using Divisions (indeed could be seen also as Cost Centers for some) and Projects is the need for budget allocations and at all times see how much is used or added.

For Divisions, this budget is usually set up and agreed upon at the start of each fiscal year. For Projects, it is established at the start of the project. However, both are monitored throughout the financial year (running balances against budget for each account) where revisions to project budgets are dependent on their so-called burn-rate.

In addition, and I think it is in the ideas category is Manager to have the ability to have approval hierarchies that include approval limits (when expenditures made above that someone higher up in the hierarchy should approve and where in all cases some-one else co-approves (except for Petty cash transactions).

As mentioned this may not be needed for many small businesses and maybe Manager would benefit from actually removing a lot of more complex functions and focus on those aspects that help small businesses to do all the essential book keeping tasks and generate reports that make them compliant with taxation in their jurisdictions.

As Manager has already a lot of more complex functionality the alternative is to go the extra mile and add functionality as described above to be functional for businesses and organizations that require those. I also do not think that a small business is equal in interpretation, for example a business in Ghana, Nigeria, India or Nicaragua will be considered large by most people when they have a revenue of more than $250,000, medium between $50,000 - $250,000 and small when under $50,000 with many having less than $10k per year.

In Europe you are still small when earning more than $1 million and the book-keeping and accounting needs become more complex as richer countries also have more complex Fiscality policies, measures and control.