Even when the laws are comprehensible and you're not running at scale, existing accounting systems make supporting simple new requirements difficult.
Imagine a US LLC setting up their chart of accounts to track IRS deductible expenses. Coding expenses into this 17-account schema in the normal course of book keeping means taxes can be filled by copying the account totals into the corresponding IRS form field.
But later, the business wins an federal contract which reimburses certain "R&D" expenses and possibly some "overhead" expenses. Now not only must every expense must be categorized with one of 17 expense categories for the IRS, but it must also be categorized with one of 3 categories for our federal contract purposes. But wait, a small business loan application may require profit and loss broken down by a different set of categories. New and local tax authorities may impose other categories.
One way to address this complexity explosion is with multiple instances of the same accounting software; each imports the same bank account statement, then justifies it against a chart of accounts. But many businesses will break out Excel and hope there aren't too many expensive errors.
If new regulation is inevitable, why does our software pretend otherwise?
Imagine a US LLC setting up their chart of accounts to track IRS deductible expenses. Coding expenses into this 17-account schema in the normal course of book keeping means taxes can be filled by copying the account totals into the corresponding IRS form field.
But later, the business wins an federal contract which reimburses certain "R&D" expenses and possibly some "overhead" expenses. Now not only must every expense must be categorized with one of 17 expense categories for the IRS, but it must also be categorized with one of 3 categories for our federal contract purposes. But wait, a small business loan application may require profit and loss broken down by a different set of categories. New and local tax authorities may impose other categories.
One way to address this complexity explosion is with multiple instances of the same accounting software; each imports the same bank account statement, then justifies it against a chart of accounts. But many businesses will break out Excel and hope there aren't too many expensive errors.
If new regulation is inevitable, why does our software pretend otherwise?