Intergrated Accounting a la Francaise: The Perspectives of the Systeme Croise

1
Intergrated Accounting a la Francaise The
Perspectives of the Systeme Croise

• Eavan Keane
• Carsten Binnewies
• Benjamin Gaillard
• Amy Wheatley
• Jari Sairinen

2
Summary

• Description of the French accounting system
• Why do French companies use a  système croisé 
• Benefits of this system
• Limits of this system

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Introduction

• Like many countries France has a specific
  accounting system
• In France, there is a distinction between
• financial accounting, official and mostly for tax
  reasons
• analytical accounting, unofficial and non
  financial in order to study cost centres

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Requirement in accountancy for French companies

• Fixed by the Plan de Comptabilité Générale
• Include
• Balance sheet
• Revenue sheet
• No cash flow statement
• gt mostly for tax and control purpose

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Description of the Revenue sheet

• All charges and products are grouped by nature
  and not by function or cost centre
• Thus they are only classified according to their
  entry
• Criticism
• Value added produced vs value added sold
• Really hard to compare with foreign companies
• No managerial view
• Really useful for financial analysis

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Charges Products
Explotation charges Explotation products
Product purshasing 2000 Products sells 3000
Inventory change 0 Production sold
external services 14 Production stocked
taxes 40 Production fixed
Personal charges 300
depreciation 120 Other charges 0
other charges 0
Total explotation charges 2474 Total explotation products 3000

Financial charges 80 Financial products
Interest fees interests received

total Financial charges 80 total financial products 0

Total exceptional charges 140 Total exceptional products 200
Taxes on profit 100
Total charges 2794 Total Products 3200
Profits 406 Losses
Total 3200 Total 3200
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Why French companies use a  système croisé 

• Big companies began to use this system in the
  1980s
• By concentrating the entries in one department
• It consists of recording data in two different
  accounts with two separate double entry
• One corresponds to the nature of the operationgt
  for the income statement
• The other one corresponds to the cost centre for
  the analytical accounting

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The next step integrated system

• A triple entry system is used, introducing an
  extra dimension into the recording of each
  transaction
• As well as the application (debit) and source
  (credit), the nature, i.e. the purpose or
   raison dêtre  of the operation
• Impact for the company
• Reliability of the information
• Improve data relevance
• Clear overview of the current cash flow

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• Source The integration of financial accounting,
  management accounting and Cash flow accounting,
  Stowoy and Touron

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Benefits of  système croisé 

• Allows precise analysis of cost center for the
  company
• Combines both accounting systems (financial and
  analytical) in order to reduce disparities
  between the two
• Moves from an accounting approach to a management
  approach

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Limits of the system

• Implementation can be hard and expensive
• A huge upsurge in the volume of clerical work
• Traditional mistrust about French accounting from
  a global perspective
• Lack of incentive to introduce this croised
  systemgtmany SME dont have a clear idea of the
  principles of management system

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Conclusion

• Given the French accounting system, the Systeme
  Croise is the best way to implement management
  accounting.