by Ted Needleman
Trial balance software is very much a niche product.
That’s really saying something, considering that the accounting market is itself a niche market to start out with. As a class of software, trial balance is a bit hard to pin down. In many aspects, it is very similar to write-up, and packages for the two applications, especially those available from the same vendor, often have a lot of feature overlap.
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Write-up, as with trial balance, lets you capture transactions with the intention of generating financial statements. While the final product — financial statements — produced by the two applications is the same, the intent, mechanics and operation of these two classes of software products diverge substantially.
Write-up software is designed to allow you to perform both bookkeeping and financial statement preparation for your clients. While the end product of a write-up engagement is often a set of financial statements, the primary purpose is to produce the original books of record — the journals and general ledger. To accomplish this, it is necessary to capture the financial transactions in detail.
Trial balance as an application, however, usually concentrates on the financial statements as the primary product. These are often generated as the end product of an audit, compilation or review engagement. In this case, not only are the financial statements required, but depending on the type and scope of the engagement, you may also have to produce various types of workpapers and other documentation.
A number of the products we reviewed in this round-up address this need, as well as the financial statement generation requirement. Another way that trial balance software is used is as an input engine for tax return preparation. In this use, the trial balance is either developed or imported from an accounting system, adjustments are applied, and the resulting TB exported to the tax prep software to prepare a return.
At the core of any trial balance application is the trial balance report itself. This is used both to prepare adjusting entries, and to show them as being applied. The ancillary reports can include specialized journals for adjustments, reversals, and other specialized entries such as amortizations. Again, exactly how you use these journals, and, for that matter, which ones you use, will depend on the specific engagement.
In the reviews that follow, several vendors have addressed the details of the engagement itself, as well as, or instead of, the mechanics of producing an adjusted trial balance report and financials. These packages will be of benefit to any practitioner who accepts audit, compilation or review engagements.
The management of the details of these kinds of engagements can not only be tedious, but at some future time you may be called on to prove that you covered all of the bases. Engagement management software, either in concert with the trial balance application or as an adjunct to write-up and/or accounting software that is used for these types of engagements, is an important consideration for many practices.
