Real World vs. Computer Realm


I recently read the book Ready Player One by Ernest Cline.  The book drew me in from its concept of escaping the real world with a computer, or virtual realm.  In the book there is a virtual realty system where humans can escape from their dreadful existence in a future world that has become poverty-stricken and depressing.  The lines between real world and the virtual world blur, especially as the main character races against the clock to win a competition.

We are in the midst of the Fourth Industrial Revolution, also known as the Digital Revolution.  One day, the accounting software program that your company uses may be fully entwined with the outside sources.  This may easily enable the tie-out of the balance sheet to occur automatically.  However, we aren’t quite there yet.  Therefore, one must still look at the flow of items in the accounting system, both in the real world and in the computer realm.

In other words, your accounting system should include processes for not only the physical flow of documents and resources, but also the technological flow of inputs and calculations in the accounting software system.  The goal is to mirror these as close as possible. Computerized accounting processes must be examined in coordination with real-world flows.

An easy way to look at this is to take the checking account of the business.  If the real-world process involves the collection, storage, and deposit of multiple checks, the software input and output should mirror this.  Same with outstanding items.  If there are checks that have been written and mailed, but not yet cashed by the payee; the software input and output should reflect these outstanding items.  The closer we can get to mirroring the real-world inputs and outputs in the accounting software system, the more up-to-date and accurate output we will have.

Let me know if I can help in evaluating your own system to ensure the real world and computer realm flows are in alignment.

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Optimized CFO > Blog > Accounting > Real World vs. Computer Realm
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