Integrated Accounting - Cost Accounting Techniques, Cost Accounting Video Lecture | Cost Accounting - B Com

hi I'm Paul Perdue and I am the
infrastructure nerd and today we're
going to talk about integrated
accounting people ask me what does
integrated accounting mean very commonly
I have people come to me and they're
using let's say tabs three for billing
and QuickBooks for accounting and that
is not integrated accounting and the
reason is they are not designed to work
together and therefore when you write a
check in QuickBooks it needs to be
entered into the billing system if it's
something to be billed to the client
like a court cost or a filing fee and
when you log a payment in the billing
system it needs to also be logged in the
accounting system in order to show up in
the bank account and show up on the
deposit
that's not integrated accounting so very
simply integrated accounting is
something that ties those two functions
together so that when you do one the
other side of it is automatically done
for you at the same time let's take a
look at how that works I am in the
accounts payable system from software
technology which hooks into tabs so I'm
going to go in I'm gonna write a check
for a filing fee and I'm gonna write it
to the clerk of the district court with
today's date my demo system for this
particular software package thinks today
is 11:15 11:00 and I'm gonna write it
for $100 and let's say it's a filing fee
for Michael Larson as it says here
normally you would type whoever that is
this is your memo line for the check and
when I click tab enough times to get
through this screen it automatically
takes me over to the general ledger side
and says hey this is where we're going
to put it in general ledger
now that's one part that's the first
part of the integration we're writing a
check in in this particular application
from software technology we're writing a
check in accounts payable and it needs
to be put over in the general ledger
into a certain account and this is the
account that in my sample firm here
we've decided that these sorts of cost
but here's what the kicker when I save
this it says okay who do we build this
to and I'm the same Michael Larson and
today's date and I'm gonna press f2 to
automatically apply the remaining amount
from this check that we've written and
I'm going to use a transaction code of F
F for filing fee and there we have it
the one single group of transactions has
put this into the accounts payable
system where we'll print a check put it
into the general ledger system for the
purposes of accounting for that
transaction and put it onto the clients
bill we don't have a situation where
we're over here in QuickBooks and we are
going to write the check and then we
have to remember to go into the billing
system to to Bill for it it's all done
there is no list of things we still need
to bill for there is no bottleneck there
is no backlog there is no
synchronization later on it's done
before we can even print that check out
we have done everything now the flip
side of that integration wise and we're
using tabs 3 as an example any any
accounting and billing system that has
integrated accounting is going to going
to do it the same way is is the payment
now Michael Larsen sends us a check for
$1,100 and of course the billing system
knows that that check represents $100 to
reimburse the firm for this court cost
this filing fee that was advanced and a
thousand dollars worth of time now
perhaps the system even knows the tabs
free certainly would that five hundred
dollars worth of that time that's that's
being paid for now was for a certain
attorney Bob Jensen and the other $500
was for another attorney now what's
missing in a non integrated system is
that when we come to the billing system
and make that payment for $1100 you then
need to go over to QuickBooks and also
reflect that $1,100 payment so that you
can create a deposit
in a truly integrated system and I'm
gonna go ahead and get out of here we
are done writing that track and I'm
gonna go in here and I'm gonna make a
payment I think for mr. Larsen let's see
if he owes us any money yeah he owes us
no he doesn't let's find somebody who
does
there we go this John Williams when we
make a payment in an integrated
accounting system
let's stay with today's date and a
regular payment and no matter what the
amount of the payment is here at says he
owes 101 5.25 the billing system knows
how that breaks down and when I'm not
going to enter a check number so that's
okay when we then go over to the general
ledger system and go to create a deposit
slip one of the receipts that we're able
to create a deposit slip for is this 11
are 10 15 25 so here we have a situation
where the payments been a made in the
billing system and immediately without
the user even knowing it that payment is
transferred over to the general ledger
system now it's not just transferred
over here so that we can show it up on a
deposit slip but it's also transferred
in such a way that the general ledger
system knows that in my other example of
$1,100 that $100 was in advance $500 was
time for one attorney and $500 we
represented time for another attorney so
you could then show an income statement
that now represents this thousand
dollars in fee income coming in broken
down by attorney if that's the way you
want to show it and you could of course
in your balance sheet probably saw this
reduction of the cost advance that are
outstanding because he paid that hundred
dollars back that's true integrated
accounting from both perspectives one
where we write the check and it allows
us to build the client that's
responsible for that check being written
if there is one and the second where the
client then pays us and everything goes
back to general ledger you don't get
that when you're using QuickBooks and PC
law or QuickBooks on tabs three
QuickBooks on anything there is not that
level of integration but if you're using
PC law or tabs or any of the billing
systems that have integrated accounting
and you're also using their integrated
accounting functionality this is what
you're going to get you're going to get
something that happened
immediately and seamlessly and if it's
set up right effortlessly so that you
don't have to jump through a whole bunch
of Hoops to get things to balance out
thanks much if you need any help with
that give me a call
you