You don’t need to be sold on the benefits of computerised accounts, now do you? Any Smart Company manager will wonder how others could possibly do without accountancy packages. But believe it or not there are some successful small — and even medium size — businesses out there who are still working with manual accounts. These firms may recognise what the benefits of computerisation would be but are usually reluctant to fix what ain’t broke. This isn’t necessarily because they believe that their way of looking after accounts is better, but because those in charge of totting up the sums may not be not computer literate and perhaps fear the effort or disruption involved in changing to a computer system.
With this in mind, we’ve divided up this article into two sections: firstly, we offer a mini-directory of accounts packages which are suitable for start-ups and first time users. We also focus on some of the ways in which users of PC-based systems can add management value to the basic and statutory accounting functions with some great practical tips that will allow you to get more out of accounting software packages.
Adding up
Let’s be honest: bookkeeping is a boring but necessary chore. Without a decent software package, it’s also a lot of hard work. What accounts software gives you or feeds into, is valuable information that helps you control your business and your finances as well as possible. That means reports which can be directly generated from the accounts package itself or based on data that it feeds into a spreadsheet, for example, or a specialised financial reports package (often available as an add-on). Here are some key areas where accountancy packages can help you out:
Sales: every manager in a small business is sales-obsessed, because that’s where the (financial) energy comes from to keep you going and growing. So your accounts system will show you running totals — for today, this week, this month. But this is just the start, because it will also show who your biggest customers are, how quick they are to pay for products and services and any underlying seasonal or other patterns to customers’ buying behaviour. All of this is of use to you because the more you know about the real as opposed to the anecdotal behaviour of your customer base, then the more you can target them for special attention, incentives and marketing programmes like direct mail or telesales.
VAT: the financial nightmare of so many SMEs, yet it need not be. Accountancy systems from entry level up can work out your VAT returns almost with a single click. They can also produce them in a format acceptable to the Revenue Online Service.
Forecasting: of course you can never be absolutely sure what your customers are going to do — or what new business you will pick up. But with solid factual information in your system you can then, with a spreadsheet or other tools, make realistic projections of what will happen if the same patterns extend into the next sales period/year.
Cash Flow: every trader knows that all too often it is not the actual sums of money that count, it’s the time value, because wages and bills have to be paid and the bank manager placated. As well as speeding up your cash flow because you have a real, up to date picture of your Debtors, accounts software allows you to make realistic cash flow projections. At least you can see in advance when you are likely to be threatened with a cash famine and try to take some action ahead of time, and if you need to ask the bank to bear with you temporarily, you certainly have a lot better chance of getting them to do so with good-looking computerised figures to show.
Online Banking: the online services from Irish banks are still limited but enormously useful and time-saving. You can check your accounts (hourly if you like) and make payments to previously nominated accounts (staff, Revenue and utilities, major creditors, etc.). Accounting packages vary from one to another and for security reasons it is not yet possible for accounts software to interface directly with your electronic bank account. Nonetheless, online banking is a superb complement to computerised accounts and it just takes a few minutes to input the most recent figures so that you know exactly how you stand.
Reports: even the most basic systems have built-in report generators for standard stuff that is usually the most essential and often all that the small firm really needs, like amounts outstanding and aged debtors. Knowing exactly who owes what so you can prioritise your payment chasing is possibly the top survival tool for many small businesses.
The other tool that goes in tandem with your accounts is a spreadsheet like Microsoft Excel, Lotus 1-2-3, WordPerfect Quattro Pro or StarOffice Calc. Data from your accounts systems can be imported into a spreadsheet and automating the process for, say, monthly reports is not too difficult for experienced users. The importance is that you can do endless ‘What if..?’ calculations so that you can foresee the financial implications of various eventualities on your business. What if the summer slump goes all through September? What if our new promotion brought in 10% extra revenue for two months? What if our fixed costs go up but sales remain static?
Management decisions are, obviously enough, always better when based on information. Computers enable the small business to blend known facts, probabilities and the best judgements you can make from experience and even gut instinct. That’s actually a very powerful combination.
Getting more
These days, accounts packages are really software for technophobes! They are practically self-set-up; feed them the entries and they’ll do the number crunching. All packages contain wizards and examples for all procedures and they simply don’t let you do anything disastrous. You can mis-type figures OK, which will often be caught out later when something does not add up/reconcile. But since accounts tasks are defined, repetitive and arithmetical by definition there is really not much in any technical sense to go wrong. However, here’s some practical advice and tips that will enable you to get even more from your accountancy package.
Customer Lists: the one place guaranteed to have all of your customers is your sales ledger, so you can use it as the master list for all purposes. In all packages the addresses and other details are held there for invoices and statements and there will always be the facility to add other contact information and notes for purely internal use. Generating labels or direct mail letters is generally a doddle. Some users add sales prospects as new accounts with no sales, which is clever if you ensure you have some means of de-listing them after a period (and if reports like ‘average sales per customer’ are of no great value to you).
Stationery: most software allows printing on plain paper or your letterhead, but some are designed to be used with their own proprietary stationery for invoicing, statements, cheques, etc. This adds costs if your business does not really need pre-printed stationery so do check before buying.
Upgrading: even as you venture into computer accounts for the first time you may be keeping an eye on the future, but our advice is don’t bother your head. Get started with the package that suits you and your business now, particularly if you need maximum simplicity and ease of use. When the time comes to move up you will know a lot more — and besides, changing accounts packages is one of the easier IT tasks. At the end of a period you can easily transfer/enter all of the accounts and current balances. It may be a chore but it poses no technical problem. Simply leave the old system sitting. You can look up whatever you want and eventually you will find it’s all history and you hardly open it any more.
Spreadsheets: inexperienced users can find them difficult to set up but there’s usually no problem using them because it’s just a question of filling in the appropriate figures. Find someone who knows their way around spreadsheets, an employee or friend — pay them if necessary — to set up what you want in your reports. It’s not likely to be more than a few hours’ work for an experienced person and you can go on reaping the benefits for years — possibly without ever needing to learn anymore!
Costs: bluntly, accounts software is downright cheap considering what it can contribute to a business, so don’t be mean. Payback time can be measured in months in terms of employee and accountant/auditor time saved — not to mention time savings to the boss! Some of the least expensive packages are brilliant for what they do and those they suit. Some that may seem more expensive are so for a reason, usually the range of features. You may not use more than the bare essentials at first but later you are likely to get ambitious. However, as some start-ups are learning to work with PCs for the first time, the simpler the accounts system the better.
Shop around, enquire from other people what they use and why, ask your accountant. But be a little wary: people tend to be enthusiastic about their own choices and accountants, like clients, tend to have systems that suit them and few people have direct experience of more than one or two products. Several accounts packages have free 30-day trial offers which are well worth trying if you can find the time. You do not have to set up your entire accounts — just enough for a realistic trial in parallel with the real world!
Some Accounts Packages for First Timers
Access Accounts
Range starts with 1-3 user Foundations XP, a network product, starting with FXP Business (Sales/Purchases/Nominal Ledgers, Cash Book, VAT, etc.) and costs EUR625 plus annual licence fee EUR315. www.access-accounts.ie
Artemis II
Irish-developed integrated multi-currency package starts at EUR95 for Light version with Sales, Purchases, Nominal Ledgers (simplified invoicing, no product codes), EUR195 Standard (product/service codes, detailed invoices) and EUR325 Plus+ with Stock Control Module. Free 30-day trial downloads, manuals are extra at around EUR20. www.aquilatechnology.com
The Big Red Book
Another Irish product, easy to use screens look like traditional ledgers. Starts with Cash, Sales/Invoices, Purchases, Petty Cash Books and cheque journal for up to five companies. Creditors version EUR550, Debtors & Creditors EUR695. Installation and training (your place /their place) also available. Telephone support EUR140p.a. www.bigredbook.com
QuickBooks 03
Worldwide bestseller, easy to use, no specific Irish edition but setting VAT rates and the currency to euros are all that is required. Standard books plus stock, POs, credit card payments, 105 reports, etc. QuickBooks 03 EUR250, Pro version adds estimating, time/expense tracking for EUR500. www.quickbooks.co.uk
Sage Instant Accounts
Market leader, Sage has packages all the way up, starting with Instant Accounts at EUR180 and Instant Accounts Plus at EUR340 adding Stock and 2-user capability. The Sage Line 50 product is a more sophisticated single company, 2-user network product starting at EUR1,060. www.sage.com
Sam Jr
SAM Jr (for Apple Mac & Windows) includes Sales Invoicing, Sales & Purchase Ledgers, Cash & Bank and Journal, EUR630. Single / multi-user versions. Stable companions SAM Sr. and SAM Nominal. Phone support is EUR127 annual licence plus EUR152 for 120 minutes. www.glanmire.ie
SortMyBooks
Another friendly entry level package from Aisling Software in Killarney. Single company version EUR390, installation and half-day on-site training EUR350. Sales, Purchases, Debtors/Creditors, Bank, VAT. Job Costing. Cash Accounts for retailers. Companion product is QuickVAT. www.quickvat.com
Take Five
Leading Irish package for many years, Take Five Enterprise Accounts starter pack has the three ledgers plus cashbook, service invoicing, bank reconciliation and a forms design facility. Optional modules include Stock, Sales & Purchase Order Processing, etc. Starts at EUR1,814. www.takefive.ie
TAS Books 1
Possibly the most widely used package in Irish SMEs, starts Customer/Sales, Supplier/Purchases, Accountants/Nominal, Cash/Bank, VAT/Audit, Goods/Service invoicing and reports for EUR160. Optional phone support EUR200p.a. includes upgrades. TAS Books 2 and 3 add functionality if required, e.g. credit business, job & project costing, stock control, etc. www.tassoftware.ie
22/08/2003
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