@eko Paragraphs. Nobody wants to battle a wall of text. It’s much easier to read if you create paragraphs.
You are correct and I made amends. Funny enough I have something I would like you to amend too and that is to not address me as “dude”, thanks in advance.
@AJD The main point I was making is that I felt that you were all getting too stuck into the details, such that you couldn’t see the wood for the trees. The second point, as Tut says the vast majority of small businesses don’t have a dedicated accountant person never mind a department. For Projects to be useful to someone like me, it has to be simple like add these purchases, add these sales and add “overhead” and that’s it. Which is what Manager has always done very well.
People seem to be using Divisions completely different things, which means it’s not going to work as a Divisions concept to handle New York and London is not going to work to handle track performance obligations. that abeiku was talking about. Hence my point about defining the modules and function.
Anyway, I wade out of this conversation as I can’t really contribute anything further and I am just repeating myself. I am sure that whatever Lubos brings to the table will work for everyone.
@ATMCAssociates your questions in this topic should be about Projects.
Thanks @Abeiku . Two questions directly on it and I represent client’s questions/ requirements. I am here for them and I should be answerable to their concerns. My effort was to show what are the requirements of SME clients who do have audit and other obligations while advancing technology support them to diversify business to different areas which require effective delegation of financial reporting. So, both projects and divisions are essential selling points.
As far as divisions are concerned, budgets aren’t missing, but they’re done differently. You need to create a report (Profit and Loss Statement (Actual vs Budget) for each budget period and enter your budget figures right there and then.
It’s much simpler and, imo, better than most other workflows.
As far as projects then I agree, there needs to be a budget. Idk, if the developer or other forum members agree but I believe that project budgets need to be based on POs/RFQs and SO/SQ. So if you can assign these documents to projects you’d have an automatic project budget.
Dear @Ealfardan I am aware of the only option to do something with budgets as you described, but that is far from what I try to say here. In for example Oracle Financial (yes large scale software, but @Lubos asked about cases irrespective of size) we are able to setup cost centers (similar to Divisions) and assing live budgets to each account. Whenever something goes out or comes in it reflects in these accounts directly and shows burn rate against the budget allocations. We monitor actual vs budget expenses all the time and have tresh-holds preventing over expenses. Similarly, we have approval hierarchies from budget officer to senior management and finance Director. At the same time support, lots of small so called youth businesses and these have their own “business” set up in Manager. Ideally, Manager would have some “business clustering” function where reports from different business/projects can be agregated for overall performance. However all have assigned budgets with live updates of the balance against budget whenever something is purchased or sold.
Businesses that do not have accountants should go back to using Excel or the countless personal budget and finance software on the internet. Manager was made for small businesses and not “Non-Accountants”, small business does not mean businesses without account officers. Users around the world cannot be denied features because some of the users lack advanced accounting knowledge. You can always ignore features or modules you don’t want to use.
Manager provides users around the world with a platform that offers so much for free, you can’t get this anywhere. I will always go against anyone who tries to block the natural development of this application.
Although I am satisfied with the current setup, I am not opposed to what you suggest as long as it’s not rigid.
Maybe Lubos can think of a simplified process to the same effect.
I am an accountant by training. I have done a lot of accounting for a lot of small businesses. I have since qualified and working as a Statutory Financial Auditor. I completed my ACCA over 10 years ago. I have a Masters degree in Financial Accounting.
I have used Manager since 2018 And I can say it is not an accounting software per se, but rather a mini ERP that helps small business manage their own core businesses while at the same time build their accounting records. In most countries, the laws require that the accounting records be audited for statutory purposes e.g for Income Tax purposes.
90% of all my clients who run micro businesses (without an accountant or a functional accounting department) have loved the functions. You can say teach sales people on how to generate invoices/credit notes from their limited user accounts. They agree it is as simple as ABCD. An Office Admin finds it easier to manage refund claims. Owners find it easier to manage accounts payables via purchase orders and invoices. We intergrate bank and Mpesa data directly from the bank. I handle payroll/debit/credit notes and other complex functions for my clients remotely. We all collabotrate seamlessly. This software is amazing!
Back to the issue of Divisions and Projects, I have not heard a compelling reason as to why Projects should be a separate function. For example, suppose a Human Resource module is added (a purely non accounting function), the most logical way to add that function is to combine it with the already existing Payroll function. Similarly, project management (or cost accounting) is a means of reading financial accounting data for a project management purposes. For ages, I have done this, even in the old days when accounting was done on handwritten Ledgers. Professional Project managers will agree that the onset of computerized accounting has solved a lot of the problems that came up in manual ledgers. @Ealfardan has directed me to some article that seems to be dealing with problems that have already been solved by the modern computing.
The problem of overhead costs can be likened to the LIFO, FIFO and Average Costing methods for stock valuation that may be ridiculously cumbersome for manual record keepers but is a walk in the park in this era. Issues of allocation of “Items Excluded From Cost Accounts - Finance Strategists” have been overtaken by events because computers can crunch those numbers as long as one has a “fixed overhead absorption ratio”. This in fact will maintain the correct amounts for costs and profits/loss figures will remain the same whether you are talking about project reports, cost accounting or just plain Financial Statements based on IFRS, ISA or GAAP.
That’s a bold claim to be passed without proof.
I am curious how did modern computing replace cost accounting principles. I would really appreciate if you could elaborate on this.
It is important to recognise the distinction between discussions focussed on
- Designing how an accounting program works and
- How to use and accounting programs features
In my opinion a useful accounting program MUST get the accounting EXACTLY correct, complying with underlying accounting principles. The produced records must pass auditing by a professional auditor / accountant / government tax office. I am not saying Manager must natively produce data in the ideal format for these external parties but I am saying the the numbers must be correct and based on recognised accounting standards.
As a result discussion of modification to an accounting programs behaviour does require an in-depth knowledge of accounting principles. Well beyond most business owners. And for an accounting program serving many jurisdiction, often also beyond most local accountants.
However to facilitate other readers researching words & concepts they do not regularly deal with, could we please define abbreviations (eg CVP, BEP, TOI) when introducing them into a thread. Often different abbreviations are used for similar concepts in different places.
What really is Manager’s target market is a very interesting question.
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Small business:- is not really a very meaningful description as small is a relative term. Manager is used by a wide variety of businesses with a wide variety of priorities and I suspect every business owner using Manager, considers themselves a small business.
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I believe the average Manager user is not an accountant. By which I mean if you look at the hours spent by people using Manger (data entry, looking at reports, tracking profit & costs), most of these hours will not be spent by accountants. So ease of use in terms of labour hours saved and accessibility of business data actually mostly depends on it’s usability by non accountants.
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Many business will have some supervision by someone with good accounting knowledge. The importance of having accounting principles embedded in the software is actually lower when there is more accountant supervision. A spreadsheet will product accurate answers if closely supervised by and accountant but is likely to result in many errors if left to a micro business owner.
So I disagree with the suggestion that Manager should be designed for accountants but I agree Manager should be designed by accountants but to address non accountants business requirements.
In terms of functionality / focus, I suspect everyone wants the software to efficiently address there businesses use case. So there are as many valid opinions as Manager users.
Now that is a useful question.
In earlier posts reference was made to cost centers (CCs). I am experienced with large-scale international organizations, programs, and projects management. The basic setup is very simple. You would have a GL and each program, project, division, unit, location would be assigned a cost center. Each cost center replicates the cost and expense accounts and are assigned budgets as basis for expending funds. In essence therefore words like Division, Unit, Project, Program, etc are more organizational hierarchy identifiers under which one groups the expenses and distributes the finances from any kind of revenue (grants, sales, etc.). As such there is indeed no need for Manager to have both Divisions and Projects build-in as in essence they are just groupings. It is better to use cost centers and as already exist let groupings be setup in GL.
Thank you for your post. Your post has explained exactly what I meant! I am not wanting to prevent features being added. Far from it.
I was appalled at the suggestion that small businesses with non accountants use excel. Has that person ever used Excel to run their business accounts? Error prone was the least of my problems when I was using Excel. It was horrendous. Never again.
I will make one comment on your post. I am not objecting to the discussion of CVP etc as you do need to discuss accounting principles when discussing certain aspects of the program. It is clear from the discussion that you can do a lot more with Projects, than I had realised. I don’t need to understand these concepts. You are right - Manager needs to be designed by accountants but to address non accountants business requirements.
My concern was that they were getting lost in the woods, not seeing the trees and forgot to ask the basic question - what are they actually trying to achieve with this module? If they looked at Manager, they will see payments, receipts, banks, sales invoices etc. They will not see Accounts receivable, accounts payable, debtors, creditors, nor do you have to close off the year end and start the new financial year by doing a trial balance annually etc. The key point about Manager was to make it easy for non accountant business owners to use.
Anyway, I am going to bow out of this discussion as I agree with the main point. Accountants need to design the program as I don’t have the knowledge necessary to provide any further meaningful input other than I like the name projects and divisions as I know what that means to me and to me they serve two very separate purposes for my business. I have no idea what a cost centre is!
I see this feature as Manager’s answer to Job Costing. It is still a WIP.
Job Costing Accounting is different from divisional accounting. For example, a job is usually generated from a customer order. There can be multiple jobs in one customer order, this is one of the reasons why jobs and Sales orders cannot be the same thing. It will become more obvious with time. Besides, there are other issues to consider e.g. user permission settings.
A division is a business unit in a different location, different industry, subsidiary, type of product etc).
This topic is about Projects (job costing) but it looks like we have shifted the discussion from its purpose. As Lubos has already said, an enhancement to Projects will eventually reveal if projects and divisions are the same.
We should all take note that Lubos didn’t just introduce this feature for fun. This feature has been requested directly and indirectly by users over the years.
I believe if the enhancements come we shall see the difference.
Suggested enhancements
• Reference number for projects.
• Custom fields in the projects tab to enable the linking of projects to other documents e.g Sales Orders and capture more project data.
• Ability to select a customer who owns the project and show the customer as a column in the projects tab and possibly link the project to the customer tab
• Have something like a project estimate/budget and generate a report to see the variance. And others.
When we have the above added we will all begin to clearly see the need for this feature.
I agree. But that should be optional since there are internal projects as well. This is very common with real estate and tech companies.
In real estate, customers are only known when the project has progressed more than 50% of the way – in many cases. And in tech companies customers only appear when the project is almost over.
This also has me thinking of the ability to transfer a closed internal project to an asset or inventory items.
Hi @lubos
Depreciation/amortization should be charged to Project as well, is it implemented?
Is this being implemented @lubos
Is what being implemented, @sonicgroup? This thread is almost 120 posts long and has wandered through many subjects.
@Tut i mean above implementation