How It Works

The secret to EconoAccounting and why our users use words like "awesome" to describe it is quite simple. Like all good inventions, it's a case of "why didn't I think of it".

I realised that no small business really has their accounts up to date. Whether the fault lay with the existing packages or the users is irrelevant, the business still had a problem getting their accounts up to date.

I looked at the problem, by forgetting all the accounting theory and ignoring all the pre-conceived ideas I had (Accounting is for accountants - you have to know what a debit and a credit is, etc).

I realised that the perceived complexity of accounting packages is a major drawback. There is a popular accounting package that used to say in their advertising "Designed by accountants for accountants". Does this give the small businessperson confidence that it was designed for him and that he can use it also?

I realised that it actually takes a lot of time, even for an expert to capture data. In traditional - old fashioned - packages the poor user has to capture cheques he writes out, capture deposits he makes, check the bank statement and find other transactions like bank charges, leases, subscriptions and then capture those as well. This takes time, is prone to errors, and is the reason why the average person struggles with doing their accounts. Who really wants to spend hours reconciling a bank statement looking for that elusive R5.65?

I also realised that the vast majority of your financial transactions are contained in your bank statement - that is why your accountant asks for your bank statements when he does an audit! Once Internet Banking became a reality, it became very easy to see your bank statement on-line. I realised that the banks (and we support all banks) have done the data capturing task for you. It is a simple matter to download your bank statement and EconoAccounting does all the data capture for you. Approximately 95% of all your data capture is done within 30 seconds, removing the first drawback of all other accounting packages. Obviously EconoAccounting still allows you to use the old fashioned way of capturing, by typing.

Moreover, the bank statement contains descriptions that have some meaning: "Internet payment to TELKOM" surely implies that you made a payment to TELKOM for telephone expenses, and this is ´VATable´. The incredible "auto-allocate" feature of EconoAccounting is trained to recognise keywords and descriptions in the bank statement and can then allocate those expenses to the correct account instantly.

On the bank statement itself it shows the amount as a negative or a positive figure. A payment to TELKOM is a negative number - makes sense - the money came out of your bank account and this decreased the amount of money you have. Which is easier - seeing a minus sign next to the number or noting that you have to CREDIT the Bank account and DEBIT the Telephone account and also DEBIT the VAT input account? My brain says the single minus sign is easier! The software itself is programmed to know the difference between a debit or credit on the basis of the single minus sign!