Orientation > Step 2 > Categorizing Crackerjacks
The categorization of accounting related transactions manually or in a spreadsheet or in an accounting solution where a Balance Sheet is not used as a cross check report is called single entry bookkeeping/accounting.
Categorization Systems typically resonate with Small Business Owners or Individuals who don't care so much about full Double Entry Bookkeeping because 1) they don't need it 2) they feel don't it or 3) they don't understanding it and they are comfy enough with that lack of understanding not to seek out more information.
The categorizing of transactions for business reporting, personal reporting or budgeting only involves three really simple steps.
You all don't care so much about full Double Entry Bookkeeping because:
Categorization Systems typically resonate with Small Business Owners or Individuals who don't care so much about full Double Entry Bookkeeping because 1) they don't need it 2) they feel don't it or 3) they don't understanding it and they are comfy enough with that lack of understanding not to seek out more information.
The categorizing of transactions for business reporting, personal reporting or budgeting only involves three really simple steps.
- Aggregate transactions for categorization
- Categorize Transactions using categories that aren't confusing
- Generate Reports
You all don't care so much about full Double Entry Bookkeeping because:
- You don't need it
- You don't feel you need it
- You don't understanding it, and you are okay with that
- You don't realize that double entry bookkeeping and single entry bookkeeping are nearly identical if you leave off the Balance Sheet functionality...
Accounting Alchemists refer to you all as the "Single Entry Bookkeeping Crowd" because that's what bookkeeping without a Balance Sheet amounts too in simple terms.
This Categorizing Crackerjack group typically consists of TWO rather different groups of people:
- Spreadsheet Users -- The first group consists of those who use or have used spreadsheets for some time with satisfactory success for these types of tasks. This group is typically more interested in Function over Form. They like the flexibility that spreadsheets offer and they may or may not know how to create custom reporting from their data. They like being able to get in and get out of this part of their world without a lot concern with how others might view proper navigation or a logical software interface.
- Software Users -- The second group consists of those who prefer to use software that is prettier than spreadsheets to try to do whatever it is they are trying to do (expense reporting, budgeting, financial reporting, etc). This group will tend to think there is something magical behind software like Quickbooks, Quicken. Freshbooks, You Need a Budget, Tiller or another comparable "apps". All of these are in fact just a simple data table or two that can look like magic when it's not. These folks will often think the software solutions are worth paying for, when in fact they take volumes of attention in return for surprisingly little payoff. These folks typically groan at the idea of "manually importing" or "manually inputting" data because they feel giving up passwords and privacy in exchange for those are some of the greatest benefits of these solutions. These folks have never realized that most CPA's, Bookkeepers and Accounting Professionals do NOT recommend automatic data downloads for very logical and simple reasons revolving around time savings, data privacy and risk reduction.
Most of the spreadsheet folks can benefit greatly and quickly from our bookkeeping module and managerial accounting modules with ease. With a little more understanding of proper reporting for cross checking, most will find the Balance Sheet and double entry accounting in the Bookkeeping Module to be as easy as what you've been doing with far greater power than you can imagine now.
Most of the software folks won't budge from their software unless there's a real lack or need not being met. Stubborn Donkeys and Jack Asses most come to mind. Most of you struggle to claim that which is in the mirror and most will struggle to give up sexy and the idea of totality for the fully functional and free without a bit of hypnotherapy.
We feel the real opportunity to pull many of you bad software addicts into this spreadsheet based, Accounting paradigm will be with our Sales Systems and other Managerial Accounting systems\.
- For you all adopting those may come first with Bookkeeping then being a close second.
- That said, it really does make sense to adopt the bookkeeping module first because it gives the end goal and shows you what is and what is not relevant. That allows you to understand first what is and is not relevant in your other systems that feed into it.