Editorial Note 2015100679 There are 8 pages of description only SEQUENCE LISTING 1. Abstract 2. Description 3. Claims 4. Drawings AUSTRALIA Patents Act 1990 COMPLETE SPECIFICATION INNOVATION PATENT THE RAPID INPUT OF TRANSACTIONS INTO AN ACCOUNTING SYSTEM USING A UNIQUE COMBINATION OF GENERAL LEDGER JOURNALS AND SOURCE DOCUMENT DIGITISATION By Mark Ryder (mark@rydercid.au) 22/05/2015 FIELD OF INVENTION This invention relates in general to a method, system and apparatus or device for providing 5 bookkeeping services. More particularly, this invention relates to a system, method, apparatus and device for the rapid input of transactions into an accounting system using a unique combination of general journal entries and source document digitisation. BACKGROUND .0 Prior to computers and software, the bookkeeping for small businesses usually began by writing entries into journals. Journals were defined as the books of original entry. In order to reduce the amount of writing in a general journal, special journals or daybooks were introduced. The special or specialized journals consisted of a sales journal, purchases journal, cash receipts journal, and cash .5 payments journal. The company's transactions were written in the journals in date order. Later, the amounts in the journals would be posted to the designated accounts located in the general ledger. Examples of accounts include Sales, Rent Expense, Wages Expense, Cash, Loans Payable, etc. Each account's .0 balance had to be calculated and the account balances were used in the company's financial statements. In addition to the general ledger, a company may have had subsidiary ledgers for accounts such as Accounts Receivable. Handwriting the many transactions into journals, rewriting the amounts in the accounts, and .5 manually calculating the account balances would likely result in some incorrect amounts. To determine whether errors had occurred, the bookkeeper prepared a trial balance. A trial balance is an internal report that lists 1) each account name, and 2) each account's balance in the appropriate debit column or credit column. If the total of the debit column did not equal the total of the credit column, there was at least one error occurring somewhere between the journal entry and the trial 10 balance. Finding the one or more errors often meant spending hours retracing the entries and postings. After locating and correcting the errors the bookkeeping phase was completed and the accounting phase began. It began with an accountant preparing adjusting entries so that the accounts reflected 35 the accrual basis of accounting. Adjusting entries were necessary for the following reasons: additional revenues and assets may have been earned but were not recorded, additional expenses and liabilities may have been incurred but were not recorded, some of the amounts that had been recorded by the bookkeeper may have been prepayments which are no longer prepaid, and depreciation and other non-routine adjustments needed to be computed and recorded. 40 After all of the adjustments were made, the accountant presented the adjusted account balances in the form of financial statements. After each year's financial statements were completed, closing entries were needed. The purpose of closing entries is to get the balances in all of the income statement accounts (revenues, expenses) to be zero before the start of the new accounting year. 45 The net amount of the income statement account balances would ultimately be transferred to the proprietor's capital account or to the stockholders' retained earnings account.
These days, the electronic speed of computers and accounting software gives the appearance that many of the bookkeeping and accounting tasks have been eliminated or are occurring 00 simultaneously. For example, the preparation of a sales invoice will automatically update the relevant general ledger accounts (Sales, Accounts Receivable, Inventory, Cost of Goods Sold), update the customer's detailed information, and store the information for the financial statements as well as other reports. 15 The accounting software has been written so that every transaction must have the debit amounts equal to the credit amounts. The electronic accuracy also eliminates the errors that had occurred when amounts were manually written, rewritten and calculated. As a result, the debits will always equal the credits and the trial balance will always be in balance. No longer will hours be spent looking for errors that occurred in a manual system. After the sales invoices, vendor invoices, payroll and other transactions have been processed for each accounting period, some adjusting entries are still required. The adjusting entries will involve: revenues and assets that were earned, but not yet entered into the software, expenses and liabilities that were incurred, but not yet entered into the software, prepayments that are no longer prepaid, i5 recording depreciation expense, bad debts expense, etc. The adjusting entries will require a person to determine the amounts and the accounts. Without adjusting entries the accounting software will be producing incomplete, inaccurate, and perhaps misleading financial statements. After the financial statements for the year are released, the 'O software will transfer the balances from the income statement accounts to the sole proprietor's capital account or to the stockholders' retained earnings account. This allows for the following year's income statement accounts to begin with zero balances. (The balance sheet accounts are not closed as their balances are carried forward to the next accounting year). '5 Bookkeeping (and accounting) involves the recording of a company's financial transactions. The transactions will have to be identified, approved, sorted and stored in a manner so they can be retrieved and presented in the company's financial statements and other reports. Here are a few examples of some of a company's financial transactions: the purchase of supplies 80 with cash, the purchase of merchandise on credit, the sale of merchandise on credit, rent for the business office, salaries and wages earned by employees, buying equipment for the office, borrowing money from a bank. The transactions will be sorted into perhaps hundreds of accounts including Cash, Accounts 85 Receivable, Loans Payable, Accounts Payable, Sales, Rent Expense, Salaries Expense, Wages Expense Dept 1, Wages Expense Dept 2, etc. The amounts in each of the accounts will be reported on the company's financial statements in detail or in summary form. 90 All of the foregoing proposals or methods, however, contain one or more of the following limiting features: " The input of transaction can be slow as you have to use different sub modules in accounting )5 systems to enter in specific transactions. For example, in Quickbooks, to input in raise a sales invoice you need to go into Customers/Create Invoices. To then receive payment you click Customers/Receive Payments. If you are a bookkeeper and have various clients all using different accounting packages, then they have to get used to each method of inputting transactions. )0 * A lot of the accounting sub-modules request for information input that is doubling up on what has already been input, or is either irrelevant. Thus the bookkeeper is often wasting time inputting in data which is not needed, or it doesn't add any value. For example, why would you need to input in data about what an creditors invoice is, when you have already )5 input information in beforehand when raising a purchase order? e With each new accounting system, there is a continuously "dumbing down" of the accounting process. Back in the day, one had to input in the specific debits and credits relating to the transaction. These days the process has been simplified, so much so, that if .0 something goes wrong many bookkeepers (and indeed accountants) have trouble fixing things. SUMMARY OF THE INVENTION .5 To refrain from using the typical methods of accounting systems i.e. sub-modules, to enter in transactions. To also stop manual filing of paperwork i.e. source documents. In its place, a new system will be used, where transactions are input directly into the accounting system by General Journals. Each General Journal number will correspond to a Unique Identifier 20 which references the transaction to the bank statement for easy identification. After the transaction have been input, the source documentation will be digitized (scanned) and kept in the Cloud or on a backed up Server. This will allow for easy file retrieval, and will reduce the need for paperwork filing. 25 DESCRIPTION OF A PREFERRED EMBODIMENT In order to enable a clearer understanding of the invention, diagrams illustrating the preferred embodiment are attached, and in those diagrams: 30 FIG. 1 is a bank statement / list of transactions in which a box has been drawn by ruler around those transactions needing to be input into the accounting system. FIG. 2 is a bank statement / list of transactions in which those transactions needing to be input into 35 the accounting system have been labelled with a Unique Identifier letter.
FIG. 3 is an example of a General Journal being used to input a transaction found on the bank statement / list of transactions. [0 FIG. 4 is shows the digitized source documents being stored in the Cloud / Backed Up Server. Each document has been renamed (renumbered) to the specific General Journal entry it relates to. FIG. 5 is an example of a source document with the General Journal number that it corresponds to being written at the top of the page. [5 DETAILED DESCRIPTION OF A PREFERRED EMBODIMENT Referring to the figures above, the preferred embodiment starts with the creation of two data depositories labelled "Unpaid / Undeposited" and "Paid / Deposited". ("Unpaid" refers to unpaid i0 Creditor invoices, and "Undeposited" refers to unpaid Debtor invoices). All incoming financial paperwork is placed in the "Unpaid / Undeposited" repository. This is reviewed regularly and a payment / receipt runs takes place each week, where invoices are paid and receipted when they fall due. 15 Details of payment / receipt are recorded on the respective paperwork i.e. date paid, cheque number and amount on the document, and then the paperwork is placed in the repository "Paid / Deposited". i0 Periodically throughout the month the bookkeeper logs onto the Client's Internet Banking portal and prints off the latest statement / transaction list. It is then necessary to mark on the bank statement / transaction list a box around which transactions need to be entered into the accounting system (refer Fig. 1 for example). This will most likely be the 65 date from which the last bank reconciliation was performed until a couple of days before the current date. A Unique Identifier is then assigned to each transaction within the box. This is made up of the transaction date plus a letter from the alphabet. To start it off, one records an "A" to the left of the 70 first transaction's date. If the next transaction date is different, then one records an "A" to the left of this transaction date too, and so on. However, if there are other transactions on the same date then label the next one with a "B", and then "C" and so on (refer Appendix B for example). Continue to give a Unique Identifier to all transactions within the box (refer Fig. 2 for example). 75 The Unique Identifier becomes the transactions General Journal number by reading the Unique Identifier number backwards. For example a Unique Identifier of "A 2 Dec 2010" translates to General Journal Number "101202 A". The defined prefix is YEAR / MONTH / DAY / ALPHABET LETTER. Importantly, by using this number system, it makes it very easy to locate source documentation when it is referenced from the accounting system. For example, if a transaction had 80 a General Journal Number of "120105 B", one would be able to look at the bank statement for that period and see that the transaction occurred on 5 January 2012, and it was the second transaction on that day put through. Working from the oldest transaction towards the newest, enter each transaction into the accounting 15 system as a General Journal keeping within the following parameters (refer Fig. 3 for example): e Importantly, the emphasis is to enter only the minimum amount of information necessary to record the transaction as per Generally Accepted Accounting Principles. e The date must be the date in which the transaction hit the bank statement / transaction list. )0 e The journal number must be the Unique Identifier listed backwards, i.e. the journal number for a Unique Identifier of "A 6 Dec 2010", would be, "101206 A". Ensure there is one space between the number and the letter. * Code to the correct debit and credit accounts. * Ensure the tax item is recorded correctly. )5 e In the memo column, only record payment / receipt numbers, and a short description of the transaction (if it is necessary). * In the name column, ensure that the creditor / debtor are recorded on both lines. Write the journal number in bold letters at the top of all source documents (refer Fig. 5 for example) )0 as found in the "Paid / Deposited" repository folder. If a transaction doesn't have any source documentation, then one should write up a quick file note by hand using a Legal Pad if it is of a material nature. Digitise (scan) each source document, naming the softcopy file according the journal number (as per )5 Fig. 5). The following scanning parameters apply: * B&W colour mode. * 400 dpi image quality. * Double sided scanning (duplex mode). 10 0 Continue scanning after current scan is finished. * Use automatic document feeder scanner. Save all scanned documents to a Scanning folder in the Cloud / Backed Up Server (refer Fig. 4 for example). All hardcopies are kept for prosperity in an Archive Repository. Importantly, there is no 15 need to file these (as a traditional bookkeeping method would entail) as they have already been digitized. A Bank Reconciliation is performed to check that all transaction have been correctly captured. Next the Reconciliation Summary is printed (as is). After that the Reconciliation Detail Report is printed 20 with the following modifications made (in Quickbooks):): * Reduce type to "Gen..." from "General Journal" to save space. * Remove "clr" tab, and add "description" tab. * Make sure it all fits to one page. 25 The process comes to an end. 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