ANY ANSWERS: Electronic cashbooks for the 21st century

As Dennis mentioned I do feel quite strongly about this.

I can't be the only accountant who's seen clients (who after all didn't go into business to do double-entry bookkeeping) struggling to use a full 3-ledger system.

I'm not knocking Sage. That would be shooting myself in the foot because I've done the Sage accreditation. :-) But it's too big for many clients.

It does take time for accountants to get really familiar with yet another accounting package, and I have an unfair advantage here because I'm an employee, not a partner - so February slack does exist for me!

That said, Bob and his team at More are always very helpful about explaining things to accountants, and that package is very easy to learn - and for many small businesses, it contains all they need.

Winweb's online help system is also terrific for any accountant trying to learn the package. And if you can use Sage, you can use Winweb.

Imagine the convenience of an online package for those clients who struggle with anything beyond inputting. They input the basics and you can do the higher-level stuff like prepayments and accruals. Everyone wins. The client gets more meaningful records without having to learn to be an accountant - and you save time at year end. And there's no ping-pong with exchanging data backups, no having to chase the client to send a backup through - you just go on the Internet.

Also, I understand that Winweb have plans to bring out a cashbook-style entry screen - which makes the above even easier.

Unless you're lucky enough (as we are) to have a really good in-house Sage bookkeeper who can keep your clients' records for them, then I think that time spent getting to grips with new and simpler accounting packages has to be time well spent.

M

Virtually all the discussion centres around what functionality does or does not work, dominated by vendors pitching. They're not addressing the fundamental issue.

It matters not whether it is a simple cash book, ledgers or what have we. The same principle applies. Garbage in, garbage out.

I'd be exploring solutions that directly support the customer in getting the right information in as step 1. More is doing a good job there (they're not a paying client.)

This approach inevitably requires a level of training. The solution providers can do a great deal to contribute but as John Stockdyk says - the big brand vendors haven't done that.

That then leads on to thinking about how solutions can be delivered that provide a safety net. In other words, how can I, as trusted advisor, provide support so that clients can grow in confidence for themselves?

The most effective way has to be through online systems. And this works for VSBs because it's unlikely they'll do more than make periodic entries. That then plays back to Nigel's argument. But it's important to remember we're in the early stages. Developers have some way to go before they can offer the type of switch on/off capability that Nigel suggests. But it will come. If they choose to address the market.

If practitioners are prepared to make the investment in time to encourage clients of the value that upfront investment means in time/cost saved is solving problems at year end, then we've squared the circle.

At that point - the cost of a product or service becomes almost irrelevant. Why? What do your clients want - paying £50-200 for a product but which still requires £500-1,000 for you to effectively unravel? I don't think so.

The technology approach can make a significant difference. But in the end, it depends on you persuading clients to take repsonsibility for their records while you act in support, not as locum book-keepers.

There are no perfect answers today and may never be for that recalcitrant business person who refuses to play the game. Instead, I am seeing the growth of multiple systems usage inside practices. Emily Coltman talks about this as do others. Today, the preferred mix seems to be something like: More, WinWeb/Twinfield with Sage keeping in-house book-keepers in business.

Does anyone else see a trend here? So let's take off the 'wrong trousers' and put on the right ones. Address this from the client perspective in such a way that you, as practitioners, can concentrate on developing the role for which you were trained - advisory - not book-keeping.

Above all, stop looking at this from the perspective of what's convenient for the practice.

Nigel Harris just sent me the link to this article, following his review of our online product. At Twinfield, part of our vision is to move towards zero data entry, so that our accounting engine takes data feeds from operational applications and internet banking as far as is possible. As standard, our system handles import of bank statements in the SWIFT MT940 format, which is a de facto standard in many Continental European countries, and we are beginning to work our way through the UK and Ireland banking systems. Sadly each of our banks over here seem to have avoided MT940 and created their own statement/file format, but we are committed to providing a solution for all of them. So far each has been a modest amount of work in any case. Lloyds TSB is next on our list, so David Carter could even do his accounts with Twinfield rather than DIY and Excel.

I should also add that Twinfield security allows you to turn off what a particular user sees function by function, so you can simplify the system for the end user in exactly the way wished for in this article.
David Terrar
Mailto:dt@d2c.org.uk
web: http://www.d2c.org.uk and http://www.twinfield.com
blog: http://biztwozero.com

I have no doubt that it if I was still servicing the micro business market in a big way I'd be using MORE day in day out.

It seems to me exactly what they and their accountant need.

Hi Melanie,

What is your e-mail address please? I would like to get in touch to swap ideas about More (we use More and like it very much) if that'd be OK by you,

Kind regards,

Emily

I have been using Money Manager for over 10 years to keep the accounts of the local rugby club, and it is now used by many of my small clients, including shops and farms, as well as by our staff for analysing jobs without cashbooks. A good basic cash book programme, with an excellent instruction book that (nearly) anyone can understand.

like the sound of using the bank statements for the transactions, but how would you then spot errors made by the bank. Lovely to assume they don't make any, but a step too far for me i'm afraid

We use this, and encourage our small clients to use it too. It's simple, shouts at you if you have not reconciled to the bank statement, or if the VAT calculation isn't 17.5%.

Plus, it feeds directly into our excel FRSSE accounts software making accounts prep very very easy.

http://www.lindseytye.com/Spreadsheets/Cashbook.xls

Feel free to have a look, but you use it at your own risk.

Contains macros.

Another Excel based alternative is the Simple Accounts Workbook by Payexcel Limited. Whilst having the flexibility to be tailored to the particular needs of the business, the default income and expenditure headings are mapped to a profit and loss account mirroring the self-employment pages of the UK self assessment tax return.

The workbook does not rely on macros and licences purchased by an accountant or financial adviser allow copies to be distributed free of charge to bona fide clients.

A free evaluation version of the workbook is available to download from

http://www.payexcel.co.uk/saw.htm

David Wagstaffe
Payexcel Limited

Why not take a look at BankClarity? We have developed a system to accept downloads from online bank and credit card accounts, ie no data inputting.
After downloading the system is taught to recognise transactions and will automatically post them in the future.
If the included invoicing module is used payments and receipts can be tracked automatically.
VAT Returns (particularly cash) are completed in minutes. As are C/F forecasts. P&L and Balance Sheet will follow later this year.
It is extremely easy to use, either by clients or Accountants working with incomplete records - ask Paul Evans & Co in Church Village, Wales
I did write to John Stokdyk twice last year asking him to take a look, but have not received a response yet.....

I have had a preview of Microsoft Office Small Business Accounting 2006, although I have yet to discover if the UK edition is now available. It's fantastic, and I can't wait to get it. The ZDNet review at the link below says everything about it. It's not for the tiny business, but will certainly suit the growing small business with at least a couple of employees. www.zdnet.co.uk - Software reviews

BUSINESS OPPORTUNITY HERE!

Simply Books is an electronic cash book. It is designed from a bank statement's point of view. It can be extended to fuller book-keeping. A caveat - you can't download your bank statements (see more below).

We agree strongly with David Carter: "The 21st century cashbook has been staring us in the face for the past year or two - it's the electronic bank statement." The biggest difficulty with the electronic cash book is when it comes to transfers between bank accounts.

Our only disagreement with David Carter is with his implied assertion that the software solution does not yet exist (and is not near existing) and that banks and accountants must therefore get together to "hammer out a specification".

Simply Books, available for the past five years, is what David Carter is looking for, or is within a whisker of being so given two things: (1) electronic downloads, and (2) the ability to restrict users to the cash book.

So why has Simply Books not made these modifications, and why is it not better known?

The market is dominated by three gigantic players, and is very difficult to break into. Simply Books struggles to make a profit. When Simply Books was launched it employed three people; now it employs only the founder cum software designer - myself.

We started the business because we believed that the market for book-keeping systems for very small businesses represented an opportunity for serious growth and we still believe this; however we seriously underestimated the difficulty of breaking into the market.

So, the technical solution is already here, tried and tested for five years. We are passionate about this niche market, we love our customers and (by and large) they love us.

I repeat: Simply Books struggles to make a profit. But we have the technology, an established user base of a few thousand, and a tried and tested product. BUSINESS OPPORTUNITY HERE! Contact David Keeling, office@simplybooks.net, 0845 456 0365, www.simplybooks.net.

Nigel Harris said in relation to Liberty Accounts and Winweb:

"It seems to me a missed opportunity not to have included a customisation option to allow the accountant to turn off certain modules in these packages"

Liberty Accounts does allow "Partner" accountants to provide a restricted menu to their clients if required. This would not have been apparent to him as I think his recent review of Liberty Accounts was based on a trial as a standard "direct" user rather than as a managed client via a partner.

One of the many benefits of online accounts is that proactive accountants can monitor clients in the early stages and help them develop a correct approach from the outset.

Alan Wright
Director Liberty Accounts

I'd describe “more” as the modern equivalent of drawing up a Cathedral book and giving it to a client. But, the client does the bank reconciliation (because they have gone through video training), you are not restricted to 13 columns (so you don't need to analyse "sundries") and clients can email you data file weekly or monthly. I do quarterly reviews as standard and at the year end cients give me a pre-coded trial balance, which I just post into IRIS and the job is finished in a couple of hours.

The other benefit of “more” is the ability to promote fee bookkeeping software and participate in the national marketing initiatives, which I believe are just about to start. I am told Version 5 will be out next month with the option to switch on day books which makes it suitable for businesses who are on accrual accounting for VAT but don't want/need to use accounting software.

It may not be an online system but Moresoft have produced an excellent product for those clients who want an electronic cash book but don't need the ledger functions of sage etc.

We have just published the first edition of our Big Red Book guide which we have been testing on 100 of our clients. The second edition - which will include a link to a sample cashbook - will be publisehed shortly

Download the trial version free from

http://www.fairbalance.co.uk/downloads.html

I say that people have got it wrong with Excel. Everyone has to be 'clever' and pile in colour, macros etc. These actually disempower the user. Clients should be taught the very simple skills to operate Excel.

Why does it always have to be a 'complete package' in the hands of the client. Why cannot we just get them to help us by assembling their data?

The answer is purpose - “more” has been developed for one reason - to help accountants make more profit.

This is why we do not sell “more” to the end user and our partner firms give “more” away for free. They understand that there is more money to be made from adding value and saving time than just reselling software.

The “more” solution is about developing a small business strategy for your firm. When you work with "more" you:

(i) Add value to compliance services

(ii)Guarantee high recovery rates from fixed prices

(iii) Find time to build stronger relationships

(iv) Tie clients in and maximise their lifetime value

(v) Differentiate yourself from the competition

(vi) Stimulate and control word of mouth marketing

(vii) Develop new ways to win profitable clients

(viii) Reposition the firm as “consulting accountants”

Warning - “more” is not about buying some software for a few clients. It is also not an overnight solution, it will require your energy and commitment. But, if you follow our processes we gauantee you get perfect bookking from clients so you can generate recovery rates of at least £125 per hour.

The software works and clients enjoy using it but that’s not the question. The real question is “are you an accountant or a business that provides accountancy services?” If you are the latter then you will probably find “more” an interesting proposition and we'd like to talk with you.

I think David has a very good point here. Many of our clients are using debit cards and online banking specifically to reduce the bookkeeping chore – by doing so they have narrative for most of their payments on the bank statements themselves. What we need is a facility in online banking to add text comments against transactions, so clients could note the VAT element or invoice number against debits, or add the customer name and invoice number against credits. This will certainly make the prime records more accurate although it will be of only limited help for accountants.

The limitation of this approach is time lag. Financial management often requires forward planning of cashflow and managing expenditure. Relying on bank statements means you're always working in arrears. Better than nothing, but won't suit everyone.

In practice we, I suspect like many firms, have been using bank statements for years as our prime record for accounts preparation. If clients don’t keep a cash book, or keep one which is not added up or reconciled with the bank statements, we normally just code up the bank statements and post them directly to our accounts preparation software. After all, we know the bank statements are going to balance and there won’t be any missing transactions.

What accountants need is an accurately analysed bank account summary that has been agreed to the bank statements. As far as I can see, only More has come up with such a product.

Nigel Harris,
Practice manager (& AccountingWEB contributor)
Burton-Sweet