Introduction to the CARL Code

The CARL System is an Alpha Mnemonic Accountancy Coding System.

Essentially this means that alphabetical characters are used to describe a variety of business concepts within the accountancy processing.

The codes are designed to be both easy to remember and to provide a strong contract between the user of the system and the software that implements the system. By receiving standardised and semantically meaningful codes, the CARL System software is able to execute all the necessary accountancy processing required to complete a user’s accounts.

1

Document Date Identity CARL Code Amount VAT
Purchase Invoice 14/02/18 Acme Repairs Ltd MR 600 100

2

Document Date Identity CARL Code Amount VAT
Purchase Invoice 14/02/18 Food Wholesale Ltd GF 600 100

3

Document Date Identity CARL Code Amount VAT
Bank Statement 01/04/18 Food Wholesale Ltd FS 600

4

Document Date Identity CARL Code Amount VAT
Bank Statement 01/04/18 Barlcays Bank PLC OBI 32.32

The tables above outline some examples for discussion. The CARL System spent many years as a paper based system but today it is available as a web application. It has been developed to be as simple as it can possibly be. Therefore there is only one page in the application and the user simply inputs data into a series of fields as above.

The power of the system comes from the combination of the Document and the CARL Code. When the CARL System receives those two pieces of information it knows what to do with the rest of the information and it automatically updates all the accounting data behind the scenes. The user has no need to understand what is happening and the results of the updates are displayed on the screen.

In this example in row 1 the user has identified the transaction as being a Purchase Invoice. The date on the purchase invoice is then entered. The supplier that sent the invoice is entered or it may already be known to CARL so it may be offered as a pre-filled option.

Then the user needs to identify the CARL code which will complete the nature of the transaction. It is a purchase invoice but for what type of goods or services? In this example it was a Motor Repair (MR). It is possible to simply use M for all Motor Vehicle expenses if preferred or it is possible to add further information to the transaction by personalising the MR code e.g. by adding the registration number of the vehicle MR/BA34 HAB .

Then the amount due and the VAT due is entered. The transaction is then submitted and all the accounting is completed for you.

In the example row 2 you can see an example of a Purchase Invoice for the purchase of some Goods For Resale. This is the purchase of Stock. Goods For Resale is coded by G and because different businesses tend to purchase different types of stock the CARL System supports the concept of Trade Codes. For example GF is Food in those businesses that purchase Food. Trade Codes will be covered in another article at a later date.

Example row 3. When the customer processes their bank statement they see the payment they made for the stock. The CARL code that is used to identify the outgoing payment to a supplier is FS (Finance Supplier).

Example 4 displays the feature that the CARL System uses to reverse the direction of payments. In this example there was a Bank payment BI (Bank Interest) but this was a reward payment from the bank to the customer so it was reversed by the addition of the O.

Hopefully it is possible to see from these brief examples that the user can by selecting the document type and the CARL Code they are able to submit any transaction their business generated without then needed to understand anything about accountancy such as Ledgers, Debits & Credits.

With this framework in place the CARL System offers an exciting direction with the application of Machine Learning and Artificial Intelligence. Because the rules of submission of transactions are finite and the meaning of each possible combination is finite, the system is able to check and advise and learn about the user’s business and also to provide advice based on knowledge gleaned from other the behaviour learned from other businesses of the same type.