Part2, Software desires
Introduction
Accounting software should let accountants record freely. Separation of content from presentation is the way to achieve freedom. We accountants could capture what matters without constraint. Reports, displays, and combinations come later, in whatever form is required.
Methodology
1. Design → Record → Report
Our software main menu does not allow “posting journals”. It is structured as: DESIGN | RECORD | REPORT
- Design: Templates for records are defined before any entry is made.
- Record: Events are captured using those templates.
- Report: Outputs are generated in any required form.
2. Records as Graph Segments
- Events are recorded as oriented graphs representing movements of value.
- Event dimensions belong to two families of concepts:
Natural-world dimensions (things, places, beings).
Human-world dimensions (transactions, processes, roles, rights).
- Nodes bear the natural dimensions, while edges carry the human ones.
- Records are segments of a larger graph representing the entire entity in scope. (see below)
- Each segment dimension has an appropriate set of properties, including those required for the audit trail.
3. Properties of Records
- Balanced: Node values of a record always sum to nil (debit = credit).
- Instantaneous: A movement occurs at once. If not, an intermediate step must be explicitly recorded.
- Pre-designed: Templating ensure consistency, traceability, scalability, and business meaning.
The Entity Graph
1. Definition
The entity graph represents the logical flow of value from cash to cash within the entity.
- It is logically oriented, meaning logical order may differ from chronological order.
- It is closed: nothing exists outside the system. Closing the books realizes the closure of the graph.
2. Closing
- Unlike in Claude Perochon’s models, profit is not seen as a resource external to the entity. It arises only from matching, closing, and from the project dimension (see below).
- Matching is absent in reality but is performed by construction of the accounting model and processes.
- Closing requires analysis, judgment, and decision to proceed. This is the responsibility of the accounting department.
3. Origins of Models
The archetype is the one-time venture: stakeholders contribute resources; all expenses serve the venture and all revenues derive from it; the venture comes to an end, the books are closed, assets are distributed, and the venture dissolves.
From this logic come models like trade (buy–sell) and fabrication (buy–transform–sell). Every business accounting is ultimately project accounting, and the project dimension has to be explicitly coded as a node in the entity graph.
Conclusion
Our methodology combines a dual approach to analysis concepts (natural vs. human), graph-based representation of records and rigorous separation of content and presentation.
This framework enables extension into regulatory, managerial, and sustainability reporting without redesign.
With this backbone, our system can grow into a full ERP with multi-GAAP reporting ability. With no excluded data, any type of reporting can be produced: GAAP, IFRS, XBRL, Solvency II etc
Next Steps
- Build a proof of concept.
- Prototype or select a tool to design and visualise entity graphs linked to record templates.
- Formalise references to Searle (speech acts and representation), Claude Perochon (flow models) and Wikipedia.