Business and Accounting Software Developers Association (Basda) chairman Dennis Keeling has fired a warning shot about delays in solving problems connected with systems changes for the European single currency.
In a white paper released yesterday, entitled 'Managing Accounting Currency Conversion to the euro', Keeling highlights three key problems.
First, Basda said it is only now that the extent of change needed to successfully conclude a euro project is becoming obvious.
"Many people are under the mistaken belief this is just an accounting thing. It isn't, euro affects every system that touches a transaction," said Keeling. In his view, companies are only just starting to understand the full impact of euro projects.
"Siemens thought they would have their systems live by September 1999, now they reckon it will be a 44 month project to complete everything," said Keeling.
Second, Basda points up the problem 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," added 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 so 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 believes there needs to be a far wider appreciation among business executives about timescales. In Keeling's view, many organisations are leaving it too late.
"Many thought this would be a weekend handover - nothing is further from the truth," he warned.
Basda is particularly concerned about the 'fuzz' at the small and medium sized enterprise level where he says there is almost universal ignorance about what's needed.
"The Year 2000 was the worst IT project problem people have faced. But compared to the euro, it was little more than a dress rehearsal," commented Keeling.
In his view 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 solutions carefully to ensure their needs are met," he concluded.
The Basda white paper, which includes case material and benchmarking information from SAP is available at a cost of £50.
To comment on this story email [email protected]
US space agency believes the crater could have preserved ancient organic molecules from the water that flowed there billions of years ago
Valve quietly closes down hardware initiatives launched following Windows 8
Scientists create a virtual reality simulation of a black hole sitting at the centre of the Milky Way
Simulations like this can help people understand complicated systems in the universe in a better way
The most luminous galaxy ever discovered is cannibalising at least three of its smaller neighbours, study finds
The galaxy radiates at 350 trillion times the luminosity of the Sun