Accounting Programs & FileMaker™

Accounting Programs & FileMaker™

There are many different accounting programs available today ranging from the very inexpensive (Quickbooks) to the very expensive (Great Plains). No matter what the cost is, they all, fundamentally, do the same thing which is keep track of the financials, or the Big Picture, for a business.

What they don’t do at all well, because they weren’t designed to do it, is keep track of the small picture which allows managers/owners to look at their business in detail, run analyses and then be able to make decisions as to which way to move the business forward. To do this, you need a database which is where FileMaker™ comes in.

Think of FileMaker™ as a front end to your accounting program taking over the functionality of inventory control, sales, receivables and customer management; all of which it does extremely well. Say, for example, you have all of your customers in your accounting program and you invoice them through it which is the ‘normal’ way of doing things. Now instead of doing that, let’s move all of your customers into Filemaker™, process all of the orders and record payments coming in against specific invoices. (This will allow you to look at all your orders and compare the sales of one item to another and a myriad of other things, including keeping a very close eye on inventory). In one day, you issue, in FileMaker™, 10 invoices to 10 different customers for $1000 each. Now, in your accounting program post a journal entry of $10K as follows:

Credit Sales Income $10K
Debit Accounts Receivable $10K.

On that same day, you receive $5,000 in payments, which you post to the correct customers/invoices, again in FileMaker™. You then create another journal entry:

Debit Cash (or the specific bank Account) $5K
Credit Accounts Receivable $5K.

With these journal entries, you’ve ‘given’ the accounting program what it needs to have to manage the big picture and the detail of those transactions is held in Filemaker. This means that you can instantly retrieve information you need, run reports on it, analyze it, generate statements for the client and do much more. To see how FileMaker™ handles getting the journal entry numbers, take a look at the next screenshot.

Image1

The two date fields at the top are linked to the date field in the tables that you are getting the financial data from so when you enter a start date and an end date (which can be the same date for a single day report), the relationship instantly displays the relevant numbers for that period and any of the report options (shown in the lower left of the screen) can be run for that period.

In the next screenshot, we’ve changed the dates and the numbers have changed to reflect transactions for the newly specified period:

Image2

The complexity of the breakdown is completely dependent on how complicated the accounting is and, if needed, specific account codes (for different types of transactions) can be entered into FileMaker™ and numbers broken out for those different codes.  Because this system for generating numbers is so flexible and fast, it makes it very easy to run any number of complex (or not so complex) reports.

If we now go back and look at our customer record, in FileMaker™, on a single screen we can see a variety of different information:

From any of these records, we can instantly bring up the detail view or reprint an invoice or a report.

If you’ve ever worked with an accounting program, you will know that doing this is not an easy or a very quick task; such is the power of FileMaker™ when it is used as a front end to your accounting program.

Now, you may have noticed that I’m not suggesting FileMaker™ handles payables or payroll.  While it could do it, that functionality is best kept within the accounting program as invoices from vendors will come in and need to be paid and payroll calculated for employees; in other words, there is no point in re-inventing the wheel to perform these tasks.

Admittedly, if all you are familiar with is Accounting software, this concept may be difficult to grasp but once you see how much time it will save you, you will very quickly realize that, in this instance, using FileMaker™ as a front end to your accounting software is a better mousetrap.

The video that follows shows you how to get accounting numbers out of FileMaker™ so that you can post them into your accounting system as journal entries.

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