Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Learn accounting for free

accountingcoach.com

Post reply on HN
Print view View original

21–30 of 121 posts

Re: Learn accounting for free

#21

Post by dugmartin »

jimnotgym wrote: post #18
augiemagic wrote: post #11

Earlier quoted context omitted.

This sounds like something I'd be interested in learning more about. Do you have a couple examples of said data reconciliation issues, and the corresponding accounting approaches?

An easy example. In a well designed database that represents an accounting ledger, debits are positive numbers credits are negative. With double entry accounting, if everything is correct the entire ledger sums to zero at all times. It is trivial therefore to know if an error crept in to your system, maybe something posted only half the entry before erroring (btw always post a complete double entry inside a database…

You can also design your schema using unified ledger accounting (https://en.wikipedia.org/wiki/Unified_ledger_accounting) which captures both the transaction's debit and credit in a single row in a single table negating the need for a transaction.

Re: Learn accounting for free

#22

Post by onphonenow »

I'm not a fan of debits / credits for folks not going into accounting properly.

Porter has a book - the alternatives to debits and credits, using financial information.

Basically accounting is an equation you keep in balance.

Assets = Liabilities + Equity

You can understand how any transaction "posts" by keeping this equation in balance (or solving it).

You borrowed $100K? Your liabilities are + 100K, and cash (an asset) is also + 100K. Books in balance.

(Change in) Equity = Income - Expense

Extends this formula to your profit and loss statement if needed. Errors accumulate in the balance sheet as well.

Note that balance sheet is more important. With two balance sheets at different times I can see my net income for that period (no categorization of income / expense needed).

Re: Learn accounting for free

#23

Post by EvanAnderson »

marton_s wrote: post #3

I'm a software engineer who moved into freelance consulting a few years ago (I do back-ends and front-ends for mobile and web, nothing finance specific other than occasional credit card payment integrations). It's been a roller-coaster in many regards and one of the highlights is having learned a lot about bookkeeping, taxes, financial planning and everything that comes with running a small business in general. (Aspe…

I took the 101/201-level accounting classes at a local community college before my partners and I started our IT support contracting business in 2004. (For me, instructor led training is a preferable delivery vehicle, but the results might well be the same if I enjoyed self-education for this kind of thing.)

The dividends paid by having basic accounting knowledge were twofold.

It definitely helped me run the business better-- particularly when it came to working with the CPA who handles our taxes. It also helped me in communicating the operation of the business to the partners who have less of an accounting background. I've ended-up doing all the bookkeeping for the business and I think we've saved a ton of money versus hiring an accountant to do that basic work. (We still hire-out for tax-related work because I don't want to sink time into learning those intricacies.)

The other major benefit, and arguably a larger one than the first, is giving me credibility when I talk to Customers' finance and accounting people. Properly using the terminology they're comfortable with to describe their business problems feels like it has helped me land relationships and projects. Obviously, I can't spin-up a "scratch universe" to test that hypothesis, but I do know that I've seen tech-heavy and accounting-light presentations by other vendors go over very badly with some of the same people.

Finally, I'd argue bookkeeping and accounting is, arguably, the oldest "information technology" discipline in humanity. Much of IT springs from the history of bookkeeping becoming computerized ("automatic data processing"). I think knowing the history of IT, be from the dawn of computer science birthing from logic and mathematics, or the first practical applications of IT to human problems, is valuable to its practitioners.

Re: Learn accounting for free

#24

Post by zerop »

Pardon my ignorance if any, but I find financials and accounting as quite boring things. Most problems in these are about tracing numbers, reconciliation and mismatches. What thril one can face in these areas? Any examples of challenges you see ?

Re: Learn accounting for free

#25

Post by cheradenine_uk »

marton_s wrote: post #3

I'm a software engineer who moved into freelance consulting a few years ago (I do back-ends and front-ends for mobile and web, nothing finance specific other than occasional credit card payment integrations). It's been a roller-coaster in many regards and one of the highlights is having learned a lot about bookkeeping, taxes, financial planning and everything that comes with running a small business in general. (Aspe…

UK based, so YMMV.

Moved from self-employed for the odd side gig, to UK LTD co, to VAT registered UK LTD co.

The "business services mafia" will like to frighten you into believing you have to drop hundreds of £ on their services - plus £120/yr for an accounts package, more for payroll, business banking, etc.

Because your mind is too tiny to comprehend the ways of the priests. e.g: Don't ever ask a question in a business forum, you'll get swamped with the clergy telling you the question implies you're definitely going to prison because you're going to get it all wrong.

Do not believe them.

It is perfectly possible - perhaps even 'easy' - and if you understand the basics of double-entry accounting, all entirely learnable without too much effort. And best of all, you can do it almost for free!

Don't drop hundreds per year on Xero, use https://www.quickfile.co.uk. Cost: £0 (upsell on receipt scanning, but I don't use that). Does VAT, with electronic submission. I literally don't understand why you'd spend money on Xero - the extent to which it's advertised over here is insane; you're just paying for TV advertising.

Payroll (and all the tax calculation): Free, for up to 3 users. https://www.shapepayroll.com

Business banking: Tide. 20p/per transaction (no monthly fees!)

The hardest parts are - discipline of entering the transactions and not letting them build up - in the UK, understanding capital allowances vs depreciation - when doing payroll how to split the payments into the correct accounts (shape does the sums, you have to account for it correctly) - Make sure you pay all your HMRC bills - Doing the year end as a micro-entity (the CT600 corporation tax return) is actually surprisingly easy, and amounts to putting numbers in about 6 boxes.

By all means pay for all of this stuff if it isn't of interest to you. For me, as I intend my co to run long after I finish working, I didn't want to have annual fees for services that I really wouldn't be getting the use out of.

Re: Learn accounting for free

#26

Post by xboxnolifes »

Closi wrote: post #17
rahimnathwani wrote: post #14

Earlier quoted context omitted.

Yes profit is the same as net income. But you wouldn't know that if you read those two sections of the text. They use the word 'profitability' several times, without ever defining it. Right at the end of part 2 (income statement), they say this: "The difference (or "net") between the revenues and expenses for Direct Delivery is often referred to as the bottom line and it is labeled as either Net Income or Net Loss."…

Well, net profit is the same as net income. Gross profit is different.

The point isn't about whether they are the same or not. The point is the the teaching material isn't very clear on the terminology used.

Re: Learn accounting for free

#27

Post by cheradenine_uk »

jimnotgym wrote: post #18
augiemagic wrote: post #11

Earlier quoted context omitted.

This sounds like something I'd be interested in learning more about. Do you have a couple examples of said data reconciliation issues, and the corresponding accounting approaches?

An easy example. In a well designed database that represents an accounting ledger, debits are positive numbers credits are negative. With double entry accounting, if everything is correct the entire ledger sums to zero at all times. It is trivial therefore to know if an error crept in to your system, maybe something posted only half the entry before erroring (btw always post a complete double entry inside a database…

If you're interested, you can always check out the code to GNUcash;

IIRC it has a SQL Schema that can be imported into most databases.

https://wiki.gnucash.org/wiki/SQL

Re: Learn accounting for free

#29

Post by jsmith99 »

cheradenine_uk wrote: post #25
marton_s wrote: post #3

I'm a software engineer who moved into freelance consulting a few years ago (I do back-ends and front-ends for mobile and web, nothing finance specific other than occasional credit card payment integrations). It's been a roller-coaster in many regards and one of the highlights is having learned a lot about bookkeeping, taxes, financial planning and everything that comes with running a small business in general. (Aspe…

UK based, so YMMV. Moved from self-employed for the odd side gig, to UK LTD co, to VAT registered UK LTD co. The "business services mafia" will like to frighten you into believing you have to drop hundreds of £ on their services - plus £120/yr for an accounts package, more for payroll, business banking, etc. Because your mind is too tiny to comprehend the ways of the priests. e.g: Don't ever ask a question in a busin…

Does it let you file directly to Companies House? The forums imply you have to hire an accountant to do that.

Re: Learn accounting for free

#30

Post by rrnn »

EvanAnderson wrote: post #23
marton_s wrote: post #3

I'm a software engineer who moved into freelance consulting a few years ago (I do back-ends and front-ends for mobile and web, nothing finance specific other than occasional credit card payment integrations). It's been a roller-coaster in many regards and one of the highlights is having learned a lot about bookkeeping, taxes, financial planning and everything that comes with running a small business in general. (Aspe…

I took the 101/201-level accounting classes at a local community college before my partners and I started our IT support contracting business in 2004. (For me, instructor led training is a preferable delivery vehicle, but the results might well be the same if I enjoyed self-education for this kind of thing.) The dividends paid by having basic accounting knowledge were twofold. It definitely helped me run the business…

I come from a family of accountants. But when I first went to college I chose IT Management which included both IT and Accounting subjects. I've worked on the IT Side for about a decade.

> The other major benefit, and arguably a larger one than the first, is giving me credibility when I talk to Customers' finance and accounting people.

I also have benefited a lot from the accounting subjects I took in college have also been an advantage in my professional career as I can 'speak the language' of my workplace's financial department.

> Finally, I'd argue bookkeeping and accounting is, arguably, the oldest "information technology" discipline in humanity. So much of the discipline springs from the history of bookkeeping becoming computerized ("automatic data processing"). It's a good background to working in IT to know about where it came from.

- Definitely. The software used at my family's the accounting office was older than any other I had used. This year I helped them migrate from an MSDOS Fox Pro 2 application to a newer app.

The MS-DOS It worked well, it is even still supported by the developer (!), but the work around required to make everything work in a Win 10 environment was too much of a hassle.

It felt like doing digital archeology when opening files created between 1989 and 1994 to see how data was stored. Even this newer app still uses an older tech stack: Visual Fox Pro 9. Accounting software seems to run in an alternate timeline.

Post reply on HN