The Small Business Financial Survival Guide

Awareness of relationships, a focus on intelligence, mindful of security, and always questioning trust makes for a good accountant and business person. There is no SuperBooks®, the new cloud-hosted accounting system that will make your job easier, … yet.

BY DAVID L. WHITEHURST – CEO/Principal Consultant for CI Wise Inc.

Questions

Why would you connect your online bank account to any general accounting system? And, do the transaction string descriptions and amounts outweigh the security risks of allowing an online application access your daily operating account using the same credentials you use to authorize transfers? You will be the only one to blame when your business account credentials are compromised or your private data is stolen. And, blame is not the currency we use to measure failure. Our cash situation may be represented in the books and even rendered somehow in the cloud vapor but real currency jingles and bills still feel crisp in our hands.

Credential compromise means anyone can e.g. login to your online bank account, use sensitive information to create a PayPal account, and then use your new PayPal account to buy nice things for their spouse and children. You could blame yourself and avoid your own embarrassment but the cash will be long gone. I can’t answer our first question directly because trust can’t be defined by other individuals. I do, however believe the bank statement transaction descriptions and amounts, while they do save time for general accounting entry, absolutely do NOT outweigh the risk in providing another corporation or commercial entity your connection information to your most critical asset, your online demand deposit account (DDA).

Your accounting system should account or keep a record of business transactions but you should keep these records and only use the online or paper statements to reconcile your records. Great reward and value can be enjoyed with the implementation of lean and agile practices, however we must never sacrifice tested and proven process and practice. A good example where change provides little to no monetary benefit is double-entry accounting, its process and mechanics. And while this accounting practice originated in medieval Europe to support joint-stock companies, the system of process has not changed and should not have changed with the introduction of computers. Computers can replace the columnar pad and also the cost of raw storage. But, the accounting system is still sound.

Quality, security, and analytics are lost when the IT system replaces the double-entry system with a laissez-faire auto-entered cash transaction system. New systems were introduced using computers that blurred the requirements for modern accounting systems. An easy-to-use financial system does not by definition prove itself to be a secure system nor does it infer trust. And, these systems are bad for one of two reasons. Either they restrict the user from making adjusting, but necessary entries or they compromise the value of reconciled and accurate transparency because they allow excessive historical revision. The purchase of a well-known (superbly marketed) financial accounting system does not mitigate risk and neither instill trust.

Would you allow an accountant, that works for another for-profit corporation, enter your organization and assume responsibility for your financials? Business intelligence is an asset as well as your operating figures. While we wouldn’t allow an individual, loyal to another for-profit entity, assume financial recording responsibility, we do however, quickly accept machine-process software to handle our record-keeping and report our obligatory transparency. This question’s answer should be a resounding NO. And, now I ask, would you allow an accounting system, written by another for-profit corporation, to be run by your organization and assume responsibility for your financials? Our answer here would be YES but only over time and with trust.

How is trust defined? This question is very grey in nature. And, the answers are many. Personally, I want to know about every aspect of my business, right down to how my information systems work and perform. Long ago my job title was Information System Specialist and with that came an intimate knowledge of the enterprise systems that ran that corporation. Today, we live in this pseudo-trusting environment where most everyone trusts all IT systems within their organization and even some now outside the walls of their network infrastructure. We believe that if it’s a Microsoft product, it must be good.

I would ask, Is the product well-known or just well-marketed? We even base our decisions on the cost of software. If it’s expensive then the quality must be there. On the other hand, we trust some applications because they are cheap. Cheap stuff tends to open our trust filters. The organizations that give away their software or charge a small fee, only want us to use it, right? An excess of marketing strategies provides little to no benefit to the consumer. And, it tends to cloud our trust (no pun intended).

Considerations

Before you choose or purchase business systems for financial operations, make a list of process needs and for each process, Create a checklist of must-have features and accept no less of a product than what meets your need. And, if you cannot find a system matching your requirements, manage the process by hand until you can either write the software yourself, hire someone to write it for you, or it becomes available to purchase within a reasonable time frame.

Our Story

CI Wise formed in March of 2015 and started with a single employee, that’s me. I’m a huge fan of Dr. W. Edwards Deming and I believe in a lean business philosophy. I’ve never kept my books using computer software. Money is tight and I wasn’t going to spend our hard earned revenue on that recommended accounting software in the green box. I wasn’t going to do it.

What’s almost hilarious is that my family owns two years of that software but it was never an expense of the company. My wife is a bookkeeper and accountant by trade and we bought the copies for her to keep up with how to use the software. She currently maintains our personal records and I handle the company books.

Even though all CI Wise journal transactions are done by hand, I’ve also keep the ledger accounts in spreadsheet tabs using OpenOffice (free software) and I create our financial statements using OpenOffice and give them to the CPA as needed.

Your Opportunity

While I dislike the software in the green box, I’m not going to describe my reasons here. I am, however going to tell you about the software that I’m currently creating. I now have an enterprise-level web application called Wise Accounting that models the double-entry accounting system virtually. This application provides a dead-simple, web-accessible, textbook-style, double-entry financial accounting system that can be hosted in the cloud and accessed anywhere in the world. It can be used to capture your financial transactions real-time. You can basically carry your daybook in your pocket now and use it on your data phone. The application is useable on any internet-capable device. Once you’ve captured the data, the four basic, globally common, reports are available with the click of a menu selection.

Currently, only US currency is allowed but we will soon offer other currencies as defined by ISO-4217. Internationalization of the application can implemented easily and will remain one of our goals as we focus first on establishing a market in the US.

The application development is being done in private now until the application can be hosted publicly. We (CI Wise) are currently maintaining our records using the software. Your opportunity to begin using the application is available now upon request. If your business would like to be one of our beta testers you can contact me at mailto:dlwhitehurst@gmail.com .

We would keep your data in isolation of other clients in a MySQL database schema of your own and provide you automated backups of the data. We value your feedback and would be willing to host an instance of the software for you at only the cost of the virtual machine (VM), about $20 month. We would administer and monitor your testing and provide you, regularly 1) the raw data dumps and 2) maintenance and support. Also, if you become one of our early-bird adopters, your subscription (EULA) would be free for life.

Or, you wait in anticipation for the press release of our first public release. At that time, we will have determined a fee structure for monthly subscriptions for the product and you will have missed your invites to our Joint Architecture Design (JAD) review sessions.

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