“There is a perception that corporate governance is just more legislation put in place by bureaucrats to make doing business even tougher than it actually is. However, the fact is that these processes actually aid businesses rather than hinder them,” says Stephen Corrigan, MD of Palladium Business Solutions.
Corporate Governance Compliance is reaching its tipping point where it is an essential function for all businesses and not just larger corporations. With compliance becoming an entrenched part of doing business, it is vital that functionality that aids this process is built into software and related business management solutions. However, “when it comes to best practice we believe that accounting software vendors have completely missed the point when it comes to features that support corporate governance, and in developing common-sense features that protect businesses from risk and liabilities” adds Corrigan.
Developed with Compliance in Mind
When developing new features for the Palladium Accounting V10 edition we used compliance as an underlying theme that lead to the development of features like Integrated POD (Proof of Delivery) Document management, Displaying Journal Calculations and Integrated Creditor Reconciliations.
With our POD management feature, users can attach POD’s to related invoices manually or run a function to attach them to the related delivery document or invoice automatically, and then generate a report highlighting the outstanding POD’s. This allows clients to manage and quantify the risk or contingent liability associated with these missing documents. Another key advantage is that these documents are electronically stored, making it simple to track any document at a moment’s notice, an essential feature for any manager and auditor.
Creating features that not only simplify accounting but also arm accountants with valuable information is key to Palladium. The ability to record In-Line formulas for calculating Journal debit or credit values is one of these features. While it may sound quite arbitrary at face value, it is invaluable when using complex formulas to calculate provisional or accrual amounts allowing the approver to be able to view the makeup of the values at a glance. The ability to attach supporting documents at transactional line level renders this an invaluable control for the discerning accountant.
The ability to manage and control all creditors and related reconciliations is critical for any business to run successfully, yet there ironically are no software solutions available with functionality to address this risk. In the latest version of Palladium, we have addressed this with our Creditor Reconciliation function. This new feature gives users the ability to process a reconciliation, starting with the system balance, highlighting all the reconciling differences, and ending with the creditor statement balance. The Creditor Reconciliation control sheet lists a creditor reconciliation summary per reconciling item type per creditor; allowing a single view of your monthly weekly or even daily recons. The ability to show zero balance reconciliations ensures that there are no unrecorded invoices or liabilities lurking in the shadows. With these reconciliations stored on your main accounting system and not in a hardcopy file that could easily get lost, adds immense credibility to the business and related stakeholders such as financiers such as banks. “Processing creditor recons is probably one of the most important functions in a business yet it seems that Palladium is one of the very few applications in the world boasting this essential feature,” says Corrigan.
Technology as a foundation for compliance
Corporate governance is more than just about processes; it extends to the technology used in the software itself. Yet in saying this, most accountants and auditors are unaware of the technologies used to develop their clients’ solutions, choosing to believe the spin-doctoring of these accounting software vendors without question. Often Outdated systems and inadequate for modern business needs, and often cause clients damage in the form of data corruptions and downtime that is unnecessary in this day and age.
An example is the Visual Basic Programming language, which is still widely used by a number of well-known Accounting Software Vendors was last updated in 1999 and for which Microsoft discontinued all support in 2007. Using a solution based on this language opens up business to the very real risk of viruses and malware attacking their financial records, another area that needs to be addressed from a good governance point of view.
Another area of importance is the database itself. Many outdated solutions use databases that are simple flat-file structures and are not capable of holding much data or managing it well. These databases have little or no data integrity, leading to frequent data corruptions. The simplest way to tell if your solution uses a flat file database is that the software asks you to back up the data before you update a transaction, “If this is the case you should be worried, very worried.”
“Ultimately, good corporate governance is about putting in place the right structures to protect the business, its data and its related stakeholders in the form of shareholders, directors, financiers and employees. Selecting the right business software will aid this process and not hinder it, “at the end of the day, your accounting software should be a sail, not an anchor to the business”, concludes Corrigan.