Dynamic Ledgers are spreadsheet systems for accounting and business management using Google’s cloud-hosted G Suite.
For five centuries bookkeeping ‘data entry’ was in the form of written lists, or ledgers. It served the world very well indeed.
However from the 1970s computers displaced the simplicity of lists with on-screen data entry forms. After completing many forms one could then ask the software to generate a ‘report’. Which is …a list.
A couple of generations of administration and accounting personnel have all but lost sight of the fact that accounting ledgers are, fundamentally, lists.
Ledger: a list of transactions
Dynamic: (of a process or system) characterised by constant change, activity, or progress.
Dynamic Ledgers revert to the original and best means of data entry: lists. Anybody is capable of producing a list. The lists are, however, dynamic which means (unlike those centuries-old ledgers) they possess capabilities such as:
sorting – by invoice date, by customer/supplier, by invoice number…
filtering – to look at only specific customers’ transactions, transactions in a date range, transactions in a value range…
warnings – highlighting of data/math errors, or values outside certain limits
compiling – Dynamic Ledgers automatically and continuously compile all the important management accounting information like Profit & Loss Account, Balance Sheet, Debtors/Creditors analysis, VAT Return, useful graphs and analytics.
List input is much more natural and satisfying than ‘lab rat’ repetition of form after form. This is no small benefit: we do not get lost when writing a list – if we get distracted and wonder if we had already listed ‘cheese’, all we have to do is look up our list to check. With data forms, we are forced to ‘run a report’ to seek cheese.
Listing shows us how much we have achieved and reveals patterns while we work. We can see:
- how many transactions we have entered
- the total value of those transactions
- with whom we have transacted the most
There is no need to go and run reports or analyse the data: we are looking at it. This is a big deal because few people – close to nobody – runs reports or analyses their daily input transaction by transaction. ‘Posting’ in most accounting systems is rather like posting the invoices through a letterbox. To look at them again you have to go to the other side of the metaphorical door to see them again.
Aha! You may now be thinking that all this listing demands lots of typing. But it doesn’t.
If you have lists of your suppliers and customers to hand you can set up Dynamic Ledgers and begin generating accounts in around 90 seconds.
Now that your Dynamic Ledgers contain the names of all those you trade with, posting of invoices takes around 25 seconds per entry. Let’s round that up to 30 seconds. In a business with, say, 1,000 sales transactions per month and 1,000 purchase transactions per month, this is 60,000 seconds … 1,000 minutes … 16.7 hours. A couple of days or so per month.
The vast majority of small business process far, far fewer transactions than this – 1,000 a month is roughly 50 per day, every day on each ledger.