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What I'd love to know about Crunch
I've read Crunch's website and there are several things I'd like to know about its service.
1) It mentions that they "send off your year end tax returns". Does this apply to the CT600 and the SA100s for the directors? Or do they just do the company tax return?
2) Would they also act as agents with HM Revenue, and be there to help a client if they get an inspection?
3) Do they lay out the pros and cons of becoming a limited company before taking someone on board as a client? Yes, trading through a Ltdco can result in tax savings, but what about overdrawing the DCA, what about the extra legal formalities, responsibilities, and paperwork, what about the extra transparency and addresses being on the public record? Do Crunch's clients know about this before they sign up?
M
Great, but...
It's good to see such forward thinking, but Crunch is cheeky to position itself as unique - there are several other online accounting systems that are also backed by accounting firms who also claim to provide a complete service!
What is the objective? To win more clients? Or build a software company? Or both?
The trouble with a solution that's backed by an accounting practice is that it's hard for another accountant to recommend it to their clients. So it's hard to scale the solution up to volume.
The other issue is "focus" - it takes vast amounts of resource, skill and (most importantly) funding to build a competent, high quality software solution. Accountancy and software development are very different things, trying to do both may well result in a conflict of interests.
e-conomic sees itself as a software company that enables accounting practices to utilise technology to provide better services to their clients. In our case it's a true partnership, because we give free use of e-conomic to all accountants and bookkeepers. Accountants often ask why we don't increase our prices - presumably because they fear that it makes their fees look expensive. But we believe that the cost of the software should be a small component of the client's overall accounting costs, because what clients really value is having their accounts filed etc. So the real value is in the service that the accountant delivers. Hence we maintain an incredibly clean business model, giving practices complete commercial control over their clients.
The most viable long-term approach for practices is not to develop their own software, but to work in partnership with software suppliers that you can rely on not to impinge on your client base or over charge you for the software.
Incidentally, we've just revised our pricing for the first time in our near 9 year history and the cost comparisons with Sage are compelling.
Mark Davies
e-conomic
Couldn't agree more...
... there are many accountants using web based accounting software already, seamlessly integrating all the facilities online systems allow, backed up by a solid, rounded accountancy practice.
Quite simply it's neither new nor unique, and to say so is a little disingenuous. Statements like "in complete difference to all the other boring bookkeeping systems is that that’s all they do" are inaccurate.
The benefits of online accounting to both accountant and end user are clear and becoming more widely-known. For Crunch to generate publicity like this helps us all. But I think it is important to let accountants know the whole picture.
Julian Shaw
www.arithmo.co.uk
I love these things
Garbage in, garbage out.
"as long as you have some really good, qualified people on the end of the phone who can answer your questions, you don’t need to have a dedicated manager.”
Sounds just like HMRC thinking about call centres. Which are of course such a pleasure to deal with.
A user responds
Thanks for your sensible question Emily, as a Crunch user I feel I can respond to that at least.
* Crunch is designed to handle all the paperwork for single-director limited companies - this includes all VAT returns and year-end paperwork.
* Crunch do act as agents for VAT, PAYE and Corporation Tax.
* If people go Ltd Company (if not already) business and personal tax are kept separate.
* If people also wish to have personal taxation done for them Crunch can offer that service too.
[edit: 10/7/2009 - my apologies for the misleading statement here, I'm new to freelancing and wasn't totally cognizant of the issues. Crunch can offer personal tax return services if needed - thanks Dennis for pointing this out]
More generally, the target audience for Crunch are Freelancers, Contractors and Independent Consultants who can get a better deal by switching from Sole Trader - as I did myself, earlier this year.
It's great to see Crunch shaking up the sector... obviously a lot of this has been done before but for small Ltd Companies I think Crunch is more efficient than an Umbrella company and, when they add automatic bank reconciliation I really believe they will be offering something unique and joining the dots.
Of course accountants have, and recommend, software but Crunch is designed so that I'm in control of my invoicing and expenses and Crunch will take care of the rest. I don't have a complex financial setup, single director, no share portfolio, etc. so I'm happy with £68.43 a month, pay as you go accounting and the peace of mind that gives me.
Hope that helps.
Re:Crunch chomps at ‘traditional’ Cloud accounting
"Having an internal group of accountants is one thing, but are clients given their own dedicated accountancy manager to deal with? Fell says no, and for one very good reason: “The problem is that that person goes on holiday; that person goes to lunch; that person leaves the business. Building up a relationship isn’t all that, as long as you have some really good, qualified people on the end of the phone who can answer your questions, you don’t need to have a dedicated manager.”
Any half-decent client's going to want somebody they can visit who knows them, knows their business and doesn't have to be brought up to speed on their issues by reading notes off a screen. If you're going for the call-centre route it begs the question of why you'd need expensive, qualified South-East staff when you could shift the work somewhere off-shore.
Any contractor wanting more will probably make their way over to SJD.