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Business Management Systems – The Evolution of Capturing Data (Part 1)

Posted by Gary Feldman on Jan 9, 2018 9:08:42 AM
Gary Feldman
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Too often company’s think that putting in new software will solve their problems. Software is a tool.

• Tools are only valuable in the hands of people who have been trained to use them.

• Tools often need to be setup, calibrated, and maintained to be effective

• Tools often dull or wear out with age.

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The first and most critical part of a business management system is its ability to accurately capture and classify data. Accountants looked at their calculators with paper tape as a vast improvement to manually adding their ledger sheets. Then the spreadsheet improved the basic function of adding. Finally the accounting software eliminated the need to “foot” the ledger as the computer already did the adding. Information was stored on ledger cards for customers, vendors and then ultimately in the General Ledger (GL). Information was written on these cards and transferred in batches of vouchers from the receivables ledger to the General Ledger. Computers were a way of automating the manual capture of data and redundant transfer of data between ledgers.

Some people may remember punch cards as the first method for capturing data. ADP at one point in their history had a product for Accounts Receivable where customers punched cards and sent them in for processing on the mainframe. Then came dumb terminals with green screens and keyboards. The first edition of MAS 90 was written in a version of UNIX and mid-sized companies could begin to afford their own systems.

With the introduction of personal computers small companies could afford their own accounting software. Peachtree for DOS led the pack with an affordable package that could automate ledgers like never before. Both MAS 90 and Peachtree were true double entry accounting systems (debits and credits) that were flocked to by the CPA industry.

Windows and the advent of affordable local area networks (LANs) clinched the deal in the 90’s. Quickbooks took over the low end of the market with software that made double entry accounting almost hidden to the small business end user. LANs tied together all the departments in a company and what was accounting software found its way into the warehouse for distributors and the shop floor for manufacturers. Mid market software exploded onto the scene and new players like NAVISION (now Dynamics NAV) offered customization tools like never before so the software could be tailored to unique requirements just like the mainframe software run by the Fortune 500!

This evolution changed the way data was captured from accountants in the back room to the capture of data at the source. The mantra became capture the data early and capture the data once. Just as computers eliminated the redundant data capture on manual cards and transfer to other manual cards, the LAN transformed accounting software into ERP by tying together spreadsheets or Access databases for inventory with the general ledger so all data could be in one system, entered once.

 

Topics: Business Management System, data capture, evolution

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