The Accountz Philosophy
Accountz is based on the world professional standard of double-entry accounting. However, Accountz differs from other professional software in the way double-entry is presented to you, the user. We have removed the jargon and transformed the process. Instead of Credit and Debit, you now have From and To. Here is an example of how this simple transformation turns double-entry from difficult to easy:
Example: Suppose we pay business rates by direct debit from our bank. In a typical double-entry software system you would make 2 entries. The first would debit your business rates account. The second would credit the bank (yes, credit). Both entries would be for the same amount, hence the books would balance and all is well.
Fig 1. Traditional double-entry journal
The problem is, what exactly does a ‘credit’ mean when we are taking money from the bank? How does taking your money from your bank result in a credit entry? And worse, how can we remember that without taking a course in accountancy?
Well, you don’t need to! Here is how this same transaction looks given the Accountz treatment:
Fig 2. Accountz alternative transaction
Replacing Credit with From and Debit with To simplifies everything. Having a single amount column guarantees the transaction balances. The point is this: accounting for your business means tracking the flow of money in, around and out of your business.
When you make any payment the money flows from your bank (or credit card etc.) to some expense or other account. This from and to concept is all you need to remember. It will enable you to logically understand and enter any type of transaction.
When you pay off your business credit card each month from your bank, the money flows from your bank to your credit card account.
When you make a sale, the money flows from a sales account to your bank.
Once you have this single rule fixed in your mind, accounting with Accountz will become a pleasure.
And if you want to impress your accountant/bank manager/tax inspector, just remember the rule:
- Credit = From
- Debit = To
Alphabetically they are in the same order (C before D, F before T) so it is even easier to remember should you need it.
Accountz is unique amongst accounting software. It has simplified the double-entry accounting system. Use it with confidence and it will pay dividends by saving you time, giving you better financial control, and therefore saving you money.