UK businesses have been told to buck up their ideas and get their accounting systems in order to deal with the euro.
Dennis Keeling, chairman of the Business and Accounting Software Developers' Association (Basda) fired his warning shot - which is particularly aimed at SMEs - after concerns of delays in solving problems connected with systems changes for the European single currency.
In a recent white paper entitled 'Managing Accounting Currency Conversion to the euro', Keeling highlighted three key problems.
The first related to businesses only now realising the extent of change needed to successfully conclude a euro project.
'Many people are under the mistaken belief this is just an accounting thing. It isn't, the euro affects every system that touches a transaction,' said Keeling. In his view, companies have only just started to understand the full impact of euro projects.
'Siemens thought it would have its systems live by September 1999. Now it believes it will take nearly two years to complete everything,' said Keeling.
The second problem according to Basda is the lack of understanding document integrity through the transaction recording process. 'Auditors we spoke with didn't appreciate that multiple line analysis means the risk for any or all accounts to be out of balance,' said Keeling.
The reason this happens is that any time a system demands line-by-line analysis, each line needs to be converted separately before it appears as part of the records.
The compounding effect of small currency differences over time adds to the problem, so in future, companies will need to prepare balancing entries.
If this is done on a global basis, then it would be a relatively simple matter, but it is unlikely this would be acceptable practice from an audit perspective because of the need to trace all related entries.
In addition, most modern systems do not cater for this kind of problem and Basda envisages a significant overhead in terms of manual reconciliation as customers switch their systems.
Finally, while application vendors are well aware of the complexities and issues, Basda believed there needs to be a far wider appreciation among business executives about timescales.
'Many businesses thought this would be a weekend handover - nothing is further from the truth,' he warned.
Basda is particularly concerned about the 'fuzz' at the SME level where Keeling claimed there was almost universal ignorance about what is needed.
'The year 2000 was the worst IT project problem people have faced. But compared with the euro, it was little more than a dress rehearsal,' commented Keeling.
He claimed that when customers wake up to what they have to do, many will buy inappropriate software applications.
'This will be good news for the application vendors, but there is a risk customers will suddenly realise they have a problem and panic. They must evaluate systems carefully to ensure their needs are met.'
The Basda white paper, which includes case material and benchmarking information from SAP is available for £50.
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