Copyright: David Lawson– appeared Property Week May 1998Home page
Today's meeting of European ministers in the first moves to a common currency could be the start of a a computer nightmare for the property industry which rivals the infamous millennium.
Accounting programs cannot yet handle the conversion in euros, according to software experts. Property managers have been lulled into a false sense of security because Britain will remain outside the system for at least four years. But this could be shattered if a single client - perhaps a subsidiary of a foreign company - demands reports in euros after the currency comes into force next January.
The problem stems from an obscure EC regulation called Article 235. Conversions will no longer be allowed by simply switching from pounds to lira, francs or marks. It must be done through 'triangulation', which involves going from pounds to euros and then into the required currency.
A precise formula has been imposed to prevent inaccuracies creeping in through 'rounding-off' of these conversions. 'It is more than likely that existing software uses a calculation methodology that is at least inaccurate and at most illegal,' says Neil Harrison, business development director at Fraser Williams.
He is deeply involved with updating Skyline, the leading property management system to comply with European demands. But Gavin Eiloart, a property specialist at management consultant KPMG, says the industry as a whole seems to be underestimating the task ahead.
'The big accountancy houses say it will be a mammoth job. It could rival the millennium bug because the deadlines are so short. The euro comes into force in only six months,' he says.
Property software publishers insist that programs will be updated for clients who want to meet EC standards. 'It is still early days. We are still waiting for advice from the government on how the euro will work,' says Stephen Bolton, managing director of Estateman, which won top rating for management software in an Ernst & Young survey last month.
Three of the industry's gamekeepers have turned poachers for next week's Property Computer Show in Leeds. Jones Lang Wootton, Gerald Eve and Weatherall Green & Smith would normally be scouting the stands for new programs. But for the first time, they are selling software.
Each has written programs aimed at corporate users. JLW is releasing its CREDO strategic portfolio management system. Gerald Eve has developed a Windows-based terrier to access property information quickly. WGS is launching READ 2000, a desktop management tool focusing on control, analysis and reporting operational property.
PCS North - 12/13th May - Royal Armouries, Leeds.