Accounting Software that supports Negative balances?


L

Larry

Hello;

I'm a former engineer, now moving into veterinary practice management thanks
to my wife's purchase of her employer's clinic. I am taking an accounting
class as part of the transition (which will take months) from engineer to
manager.

One thing I'm struck by in the accounting world is the avoidance of negative
numbers. All of the difficulties having to do with "debit" and "credit"
balances could be eliminated by simply admitting the concept of negative
values; which have been around since about the 11th century, if I remember
my
history correctly.

Do any of the modern accounting software packages allow for single-balance
accounts, which can go negative?

TIA
 
K

kandles

Larry said:
Hello;

I'm a former engineer, now moving into veterinary practice management thanks
to my wife's purchase of her employer's clinic. I am taking an accounting
class as part of the transition (which will take months) from engineer to
manager.

One thing I'm struck by in the accounting world is the avoidance of negative
numbers. All of the difficulties having to do with "debit" and "credit"
balances could be eliminated by simply admitting the concept of negative
values; which have been around since about the 11th century, if I remember
my
history correctly.

Do any of the modern accounting software packages allow for single-balance
accounts, which can go negative?

TIA
To put it in engineering terms, there's no such thing as suction, only
less pressure in one place than another. Everything is relative.

How can you have negative wealth? Negative food? Negative air? You
can only have less than someone else, or be obliged to provide some to
someone else.

Accounting measures flow of value. Anything that flows has to have a
source and a destination, therefore you need the two entries.

Credit is the source, debit is where it goes to.
So when you receive money from the bank, you credit the bank and debit
yourself.
You are saying Money came from the bank and went to me.

The bank will do the same thing from their perspective, so their entries
will be the mirror opposite of yours -- if they are giving, you are
receiving.

You both are documenting the flow from your own point of view.

You can have 'negative' balances though.

If you have an account that is defined as an asset account (i.e. a bank
account)
It is hopefully the destination (debit) of more money than it is the
source (credit)
If the opposite happens, most software will show a negative balance --
in accounting that is done with brackets

But if you have an account that is defined as a liablity account (i.e. a
credit card account)
It is probably the source (credit) more often that the destination.
(Hence it's name)
But it is possible that you pre-pay your credit card. That would give
you a negative balance

So negative in your bank account is bad for you, but negative in your
credit card is good for you.

If an accounting program only dealt in negatives and positives, things
would get confusing fast.

You have to stick with the documenting both sides of the flow.

BTW debits and credits may not date back to the 11th century, but they
do go back as far as the 15th century where they were invented by
Pacioli, a Franciscan monk and mathematician



If we were to just
..
 
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C

Chris Gunn

If an accounting program only dealt in negatives and positives, things
would get confusing fast.
Howdy,

Only people get confused including inept programmers. Computer programs
have no problem with positive and negative numbers unless the programmer
tinkers with it. There's also no need to mess with the formatting. A minus
sign works fine. If emphasis is needed, you should display negative numbers
as red and leave the minus sign alone.
You have to stick with the documenting both sides of the flow.
Wrong again! Your "balance" is simply a column of numbers you ask the
computer to add up for you. What you put in a separate column to describe
those numbers does not modify that function.

BTW, your computer hardware does not know how to subtract. All it can do is
add positive and/or negative numbers. It also does not know how to multiply
or divide.
BTW debits and credits may not date back to the 11th century, but they
do go back as far as the 15th century where they were invented by
Pacioli, a Franciscan monk and mathematician
Ledger accounting hasn't changed since then. Well written software should
follow the same rules and stop trying to treat people like chimpanzees. If
a person does not understand accounting, they should hire and pay someone
who does. Buying a program with pretty pictures does not compensate for
that lack of understanding or qualify anyone as an accountant.

Thanks, Chris www.bizynet.com and www.bizycart.com
BIZynet Coordinator (e-mail address removed) - (505) 586-1225
 
K

kandles

Chris said:
Howdy,

Only people get confused including inept programmers. Computer programs
have no problem with positive and negative numbers unless the programmer
tinkers with it. There's also no need to mess with the formatting. A minus
sign works fine. If emphasis is needed, you should display negative numbers
as red and leave the minus sign alone.
My point is what is positive? When I get my credit card statement, a
positive amount is one that I owe. On my bank statement a positive is
what is mine.

You have to differentiate between normally debit and normally credit if
the numbers are to make any sense.
Wrong again! Your "balance" is simply a column of numbers you ask the
computer to add up for you.
The point is how you arrive at those numbers.

What you put in a separate column to describe
those numbers does not modify that function.

BTW, your computer hardware does not know how to subtract.
But it knows how to make a binary two's complement, thus creating a
negative number.

All it can do is
add positive and/or negative numbers. It also does not know how to multiply
or divide.


Ledger accounting hasn't changed since then. Well written software should
follow the same rules and stop trying to treat people like chimpanzees. If
a person does not understand accounting, they should hire and pay someone
who does. Buying a program with pretty pictures does not compensate for
that lack of understanding or qualify anyone as an accountant.
I thought your original question was is there a simple accounting
program that is only positives and negatives, no debits and credits.
Actually, I think the simplicity of Quicken fits the bill here...

But if you understand accounting, then you should be comfortable with
double entry accounting.

You might want to take a look at SQL-Ledger. It is open-source and
fills a niche that no other software seems to fill. You can install it
on a webserver, and then access it through a web interface on any
computer on the intranet (or if you are brave, internet)

http://sourceforge.net/projects/sql-ledger/

It doesn't come with lots of pretty pictures, but will easily handle
large companies' accounting.

Cheers,
Lester
Thanks, Chris www.bizynet.com and www.bizycart.com
BIZynet Coordinator (e-mail address removed) - (505) 586-1225
..
 
C

Chris Gunn

My point is what is positive? When I get my credit card statement, a
positive amount is one that I owe. On my bank statement a positive is
what is mine.

You have to differentiate between normally debit and normally credit if
the numbers are to make any sense.
Howdy Lester,

You can confuse yourself by trying to assign concepts when the numbers talk
for themselves if you let them.
The point is how you arrive at those numbers.
It's simple. You put in negative numbers if they are supposed to reduce the
balance and positive if they increase the balance. Check book programs make
the decisions for you when you fill in the appropriate blanks.
I thought your original question was is there a simple accounting
program that is only positives and negatives, no debits and credits.
Actually, I think the simplicity of Quicken fits the bill here...
They all work internally with positive and negative numbers. On top of that
is added a user interface. Some programmers handle it in a logical straight
forward fashion. Others like to add a lot of decoration and fancy titles.
You might want to take a look at SQL-Ledger. It is open-source and
fills a niche that no other software seems to fill. You can install it
on a webserver, and then access it through a web interface on any
computer on the intranet (or if you are brave, internet)

http://sourceforge.net/projects/sql-ledger/

It doesn't come with lots of pretty pictures, but will easily handle
large companies' accounting.
This one sounds well worth trying out. Didn't have time to see if it
provides backups and other insurance measures. On the web, without backups,
is not a good idea. SQL bases on a web server can trash themselves. If
this program is script based, rather than compiled, got another set of
problems waiting to catch you by surprise.

Be nice to see some reviews by folks using it as an alternative to the price
and code bloated commercial candyware. I hate being treated like a
chimpanzee and asked to click a bananna when I'm hungry.

Thanks, Chris www.bizynet.com and www.bizycart.com
BIZynet Coordinator (e-mail address removed) - (505) 586-1225
Moderator of biz.ecommerce, biz.general, biz.marketplace.discussion,
biz.marketplace.web-design, biz.marketplace.international & others
 
M

Michael J Davis

Larry said:
Hello;

I'm a former engineer, now moving into veterinary practice management thanks
to my wife's purchase of her employer's clinic. I am taking an accounting
class as part of the transition (which will take months) from engineer to
manager.

One thing I'm struck by in the accounting world is the avoidance of negative
numbers. All of the difficulties having to do with "debit" and "credit"
balances could be eliminated by simply admitting the concept of negative
values; which have been around since about the 11th century, if I remember
my
history correctly.

Do any of the modern accounting software packages allow for single-balance
accounts, which can go negative?
Larry,

ISTM that you are confusing the brilliance of double entry bookkeeping
with the simplicity of single balance accounts.

(I'm an engineer and commercial businessman)

When I worked as an engineer, I would frequently have what we now call a
spreadsheet - an analysis chart - in which the columns and rows required
totalling to ensure that the arithmetic was done correctly. It the total
of totals by rows didn't equal the total of total by columns, then we
knew that an error had been made. I recall an analysis of 200 columns by
300 rows that took us two days to find the summing error. Now we have
spreadsheets.

The reason for double entry is that everything must equal zero as we go.
Errors are eliminated. The concept is brilliant. Every penny is
accounted for. (I once proposed double entry bookkeeping as the
greatest invention of the last millennium!)

If you have single entry accounts (and you can set up your own
spreadsheet to do this) then you receive in a bill for, say, $569.75 and
write out a cheque for $596.75, you won't know until the end of the year
that you are $27 short. Then all hell breaks loose.

Double entry, with a place for assets / liabilities that must balance,
avoids such problems. Stick with it - it appeals to the engineering
mind! ;-)

Mike

--
Michael J Davis
<><
Some things in life are too important
to be serious about
<><
 
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S

Steve Scott

For me it was understanding that the equation
Assets = Liabilities + Owner's Equity was paramount in accounting.
Once you accept that that equation is the basis for accounting it
become much easier for me to accept the machinations required to make
that equation work.
 

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