Document based or Journal based PSA accounting interface? Get it right from the start and you'll save time and money in the longer term

    Written by HarmonyPSA on 2014-06-17 Last updated 2018-06-27 - 2 minute read

If the PSA tool you use does not contain its own ledger, it will need to support an interface to a third-party accounting package.  There are two ways to do this and here we discuss the pros and cons of both.

We refer to the two methods as being either Document based or Journal based.

The most common interface is the first, a document based one.  With this model the PSA tool provides the content of the transaction and the accounting package books the accounting entries, or put another way, converts the business event (billing) into a set of accounting events (journals).

The document interface seems reasonably simple to operate.  To make it work you need customers and product codes in both the PSA solution and the accounting package.  The interface message then includes both these codes plus a quantity, price and transaction date.  The physical invoice is created in the accounting system and payments are managed there.  In some instances, the invoice details are written back to the PSA solution and can be marked as paid there.  While more complex, at least this provides the PSA solution with a customer account status view.

However, the big draw-back of this model is that it can only deal with “current P&L” type transactions. Meaning that all the money is booked to P&L in the period of the invoice.  It has no way to model deferred revenue or pre-payments.  With traditional break/fix monthly billing models, this works fine, but with emergent cloud billing models that can span many months, it falls short and spreadsheets are needed to account for periods correctly.

The journal interface moves the heavy lifting of converting a business event into a set of accounting events to the PSA solution.  This seems more complex, but in fact is actually easier to operate.  The PSA solution’s accounting rules need to be configured, but once that is done, the full view of the customer or supplier remains in the PSA solution and the accounting package is simplified.  Setting up a new product does not change the accounting package as the accounting rules are embedded in the PSA tool where the product is built.  Similarly, accounts payable and receivable processes reside in the PSA solution providing a complete view without further interface messages.

Indeed, the journal interface is the one standard interface provided by even the simplest of accounting tools.

Now, because the interface is carrying accounting events, it can easily manage deferred revenue and work-in-progress accounting activities, greatly simplifying finance’s job by placing these activities within the full order/project context, not the interpreted one found in an accounting system.

HarmonyPSA has a journal interface.  To find out how this can save you time and money, contact us and we will explain.


About the Author: Harmony Business Systems Ltd (HBS) is the company behind HarmonyPSA, the most complete cloud PSA software on the market. Developed with functionality to cater for even the most complex needs of MSPs, VARs, ISVs and Professional Services organisations, HarmonyPSA truly is the next generation of PSA systems. HBS is an independent company based in the UK. Follow HarmonyPSA on or LinkedIn

Tags: Business, implementing PSA, managing deferred revenue, psa accounting interface


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