This is the second in the series of my Screw it! I’m starting again blog posts regarding my supplier choices.
I decided I want to do my own accounts again. The developments in software mean that it’s become very easy to do for a micro-business, and I think it will give me more control.
When I was searching for an accounts package, there were four things I wanted:
1) auto-sync / bank reconciliation with my bank account;
2) a mobile app or at least a mobile responsive site;
3) VAT and Corporation Tax returns to be completed within the accounting system;
4) Business and Director’s Personal accounting and taxation included. So, for example, some systems enable company directors to do their self-assessment through the same system as their business accounts packages.
5) I’m pursuing a crowdsouced business model, but I still need a PAYE capability for a handful of employees, including myself.
6) If the provider offers an online chat facility with people who demonstrated that they knew their stuff, then that made me more likely to use them.
However, I could only find one system that met all these criteria.
KASHFLOW. (NB: I have made a disclosure about my previous relationship with this company at the bottom of this article.)
All of the transactions that take place for my business are electronic, passing through my bank account. Being able to synch my bank account to KashFlow is making accounts management far easier and removes much of the manual data entry. The website is very mobile friendly and I can do pretty much all I really want to on my smartphone. VAT returns can be sent to HMRC, but currently corporation tax returns cannot be generated, although they’ll do the reports as every other platform offers. However, Company Directors can generate a self-assessment report as well as year end accounts — and that’s very useful for me.
Other functions I really like include how KashFlow emails me to chase payments, but also emails clients when they’ve not paid yet.
You can batch reconcile payments to suppliers — which is handy for the set-up and ongoing management of the accounts
My legal publishing business LawMindMaps sells via a website accepting PayPal payments, and also sells via Amazon. A PayPal widget can be incorporated into KashFlow, which means I can manage this part of my business within one portal, which is great. I have had a few problems getting this properly synched, but it’s working now. I had to set up a manual import for the Amazon payments, but that seems to have been quite easy. However, it’s a shame there doesn’t seem to be a way to prevent duplicate entries being imported if you mistakenly import the feeds more than once. I had to delete previous data and re-import until I got it right.
One downside about KashFlow is that the payroll system is on a different site. It integrates, and you can use the same login details, but it’d be better to have the payroll details accessed and managed in the same portal. Also, it seemed to be an incredible pain to get the affiliate scheme working — because I had a legacy account I hadn’t used for 10 years (see disclosure below). However, it’s all working for me now.
FREE AGENT
I had an extremely fast response to my questions via Free Agent’s online chat, so things boded well.
Yes they support automated synching with banking accounts. And they offer a mobile app on both iOS and Android.
They do offer VAT filing online, but at the time of writing, they don’t offer corporation tax — although it is scheduled for launch in the first half of 2018. However, they do support filing of Self-Assessment if you are a company director.
The cost is £29 per month, which is more expensive that KashFlow, and it has less functionality. I needed something ready to go for the beginning of the 2017/18 tax year, so unfortunately, due to not being able to file Corporation Tax returns via the system, I actually gave up on this one.
XERO
It was out-of-hours one Sunday morning when I was researching accounts packages online, and I sent an online chat message to XERO, and I must stay I had another excellent online chat with pre-sales / support.
They told me the following:
They do auto-sync and reconciliation with online bank accounts, there is mobile app / access, it can submit VAT returns through the system, but it will only run the reports necessary to generate the Corporation Tax figures to put the info into the return. It’s not a direct sync with the HMRC service. What’s more, XERO does not support personal tax returns for company directors, so it primarily fell down on this request. Hence I didn’t pursue it further.
QUICKBOOKS
There doesn’t seem to be an online chat option for Quickbooks — I had to call them during office hours or email them and wait for a reply. I much prefer good online chat options so already Quickbooks wasn’t working the way I wanted it to. If they weren’t immediately available for sales, it seemed they may not be available to help me with support questions.
When someone got back to me via email, a 30 day free trial was offered, but there was heavy persuasion to book an online demo. If a service needs a member of staff to talk people through how it works, that suggests to me that it might be difficult to use. Also, I’d rather just have all the info online so I can just go through it when I have the time rather than booking something during office hours. (I want to use my office hours to service clients or grow my business, not spend time selecting suppliers.)
Quickbooks does offer an auto-sync facility with bank accounts as well as mobile access to the system. It also offers VAT returns to be completed with the accounting system — but not Corporation Tax returns. A separate package is required to manage for tax returns for the business and director’s self assessment.
It all sounded rather complicated and costly, so the research of Quickbooks stopped there.
GNUCash
GNUCash gets good anecdotal reports and it’s free. However, if I get really stuck with something, I still want the safety net of personal support, so I didn’t go further with GNUCash.
Wave
I hear great things about Wave, and it’s free / freemium in large part. They don’t have an online chat system for communicating with sales or support, so that was off putting. I instead sent an email to them asking some specific questions about their software. (If the software was good I could live without just emailing people.) However, I never received an answer to my support question. I’ve searched my spam filters and deleted items files (just in case) but my email of 29/01/2018 remains unanswered. So I never went further with this one.
CLEARBOOKS
Clearbooks was looking good, but fell down for a couple of reasons.
I had to email them rather than having a chat support agent available straight away, however, they got back to me very quickly with detailed answers to my specific questions — so I could live with that.
However, they don’t support direct filing of Corporation Tax. To be fair, they do have a Corporation Tax estimate feature which can be enabled on the Profit and Loss report, but I’d prefer the direct filing option that KashFlow offers. Clear Books only support direct VAT returns on the software. If you want to use this you have to appoint them as the agent.
They also don’t offer Company Directors’ self-assessment tools, which again, is something I’d rather have.
Finally, at the time of my research, Clear Books had removed the Clear Books app for further development. They intend to have a mobile offering by the end of 2018, though, so perhaps it’s worth looking at in the future.
On the other matters, Clear Books provides an automated bank feed through a third party service; Yodlee. Many of these systems use such third party services, but one of the problems with Yodlee is that it’s only able to pull through feeds from up to 3 months ago. Somehow with KashFlow it seems I can pull in all the data I want — at very least I’ve been able to pull in over a year of data with my tests.
FRESHBOOKS
It’s a shame Freshbooks don’t have an online chat system. That said, when I emailed my questions to the support email, they got back within 10 hours, so that’s not so bad. And the amount of information that they support staff were able to offer through links to support sections of the website were extremely good.
However, Freshbooks wasn’t going to work for me on pretty much all of the key functions I wanted.
When it comes to syncing bank accounts, Freshbooks can do this for integrating expenses in North America, the UK and Australia. Freshbooks is a single entry accounting program at the moment, so it isn’t able to offer full bank reconciliation. All income is invoice based right now.
Freshbooks offers mobile apps for Android and IOS. However, they are streamlined versions of your accounts. An html5/mobile responsive site is probably more useful than an app, particularly a streamlined app. I am actually impressed by KashFlow’s mobile experience. I can do pretty much all I want via KashFlow’s mobile responsive site.
Freshbooks can add VAT to items on invoices and run the “Sales Tax Summary report” at any time — but that is in no way the direct VAT filing that I really want. Also, Freshbooks excuses itself as “a simplified software program”, hence it doesn’t offer country specific tax reporting.
SAGEONE
Again, SageOne only offered email support. That really is off putting for me, especially since I’ve discovered the benefits of the immediacy that both customers and businesses achieve through operating an online chat system. What’s more, although I received answers to my questions, the spelling mistakes, failure to properly write the brand name, a lack of familiarity in the tone of the email response, and things like that kinda conveyed a lack of ownership over the business. That was off putting.
When I got the answers, it turns out that SageOne wasn’t going to work for me.
SageOne wasn’t applicable to me, because there’s no direct filing of Corporation Tax and Directors’ Self-Assessment. You can create and submit a VAT return in SageOne, though.
SYNERGY ACCOUNTS
A special mention goes to Synergy Accounts which didn’t match the criteria I set for choosing an accounts package. The full and transparent information I was able to obtain from the CEO himself through immediate responses to my emails meant I felt very reassured. That’s something that may only be available in the early days of this company, but it was pretty bloody good. He gave me good reason to look at his system, he’s a micro-business himself, and he raised words of caution regarding security and dealing with HMRC, so that was useful info to have.
In fact, this is the balance this review needs, so if you’ve got this far, it’s worth reading.
Synergy can auto-sync with banks as long as your bank gives you and Synergy the necessary access. However, Synergy’s CEO cautions that unless you are a micro business this is not an effective way to keep on top of your accounts. I’m not sure what the justification for this is. It may be the “accountant’s mindset” (but this is a techy that’s advising me), or it may be founded in experience (he’s been in business a while) but as far as he’s concerned, businesses should be entering transactions into their accounts long before they even get to your bank account.
He also mentioned some of the reasons to go for the manual approach to bank reconciliations: customers may not have paid the right amount, or not put the right reference in their bank account entry, and the like. To be fair, although it has many automated features, KashFlow assumes that you’ll be conducting a bank reconciliation manually, although it offers an easy import of bank transactions into the accounting system, and helpful tools to match those transactions to purchases, sales and other transactions, like tax payments.
As regards mobile access: Synergy is a desktop product. They don’t offer an app or mobile responsive web service. The CEO was very cautionary about the “huge security risk” of having accounts data stored in the cloud.
His recommendation was to use remote access software to create a secure tunnel between my laptop / tablet / mobile device directly to a machine at the office with my accountancy package on it. I have to do this for a far less important aspect of my business, and I’m really not a fan. Connection failure is frustrating, wake-on-lan success is intermittent to say the least, and I would rather a direct connection between my device and my data, even if it is in the cloud. He countered this by advising me of “significant advantages” in security and in speed of operation: the work is done on the more powerful machine and only the screen image and key press information is transferred down the tunnel — the data remains in the secure side of the connection.
Moreover, he said that all web and app based accountancy offerings suffer from the severe limitations of the web page structure. (Just saying: I think KashFlow’s is pretty good, but always good to listen to the counter argument.)
He argues that desktop applications deliver a level of rich functionality and the ability to work on several windows in the same view or dragging and dropping between these windows. However, I’m realistic in that I know for more complicated tasks I’m not going to be working on my accounts on my mobile. I just need it from time to time when I’m out and about or travelling. If your whole job is in-depth accounts, then maybe being on a desktop application is what you need. But my accounts are pretty simple, I just want the convenience of being able to perform simple tasks on KashFlow. That said, I haven’t noticed any difficulties achieving what I want via KashFlow at the moment.
As regards tax:
Synergy are registered as software developers with HMRC (albeit that’s not approval or recommendation from them). It’s also interesting that they are involved in advising and working with them on the new MTD (Making Tax Digital) programme so they’re getting fairly early notice of all of the functionality that HMRC will be incorporating into their systems. However, I can’t achieve — nor does the CEO recommend — the same level of automation that I can achieve with KashFlow.
Synergy calculates VAT automatically, but the CEO recommends that VAT should be at least sanity checked by an accountant before doing a return as the penalties for getting it wrong are “draconian in the extreme.”
Like other packages, Synergy can produce the figures for Corporation Tax returns, but he says it requires an accountant to ensure that all tax allowances, income and expenditure are correct before completing the return. Accountants normally use their own software to file a Corporation Tax return for their clients, so Synergy doesn’t normally need to do that, but Synergy’s CEO said they could implement that functionality should it be needed. However, I just wanted something ready to go, so that wasn’t for me.
As for enabling company directors to do their personal self-assessment through the same system as their business accounts packages: in Synergy you can have an unlimited number of companies / businesses / databases so it is trivial to create one for your company and one for your personal use. This is actually very attractive, and I prefer it to KashFlow’s approach, as I have a couple of other personal incomes that sit outside of the business.
His main message was unless you are the smallest of micro business you should be passing the figures to an accountant for checking / approval / tax advice rather than just hoping you have got it right. He cautions that it may cost you thousands as a result of either simple failure to claim allowances to which you are entitled or even worse as a result of penalties for not doing the figures correctly.
Food for thought.
DISCLOSURE: In 2005, KashFlow was a client of mine. My company, Parker, Wayne & Kent, defined KashFlow‘s initial key messages, analysed research they had undertaken for interesting editorial angles, and drafted and pitched out their launch press release. (We got coverage in business, start-up and accountancy media, which was our brief. Here’s an example of the coverage in the UK’s top accountancy trade magazine.)
The Managing Director of KashFlow at the time, Duane Jackson said, “Parker, Wayne & Kent got us off the ground with PR by researching and developing robust key messages and generating the content of our online press office. They also helped us to recognise the PR resources we already had available within KashFlow. They turned the results of a simple online survey we ran in the months before we recruited them into a news story for the accountancy, technology and small business media. We were impressed by the amount of coverage achieved in such a short time.”
My policy is to always use the services of my clients wherever possible — as it’s good to give back. Hence I also used KashFlow in its first guise. It was good. However, business just became a bit too busy to manage my own accounts, so I went for an accountant who took on all of the book keeping, and used their own software systems. KashFlow was purchased by IRIS, hence I believe my review today is objective and there are no conflicts of interest. Since changing how I work, and the automation and mobile working that KashFlow now permits, it seems to be much more applicable and manageable. We’ll see over the next year, of course.
Also, if you sign up to Kashflow from the links in this article, I will get a small reduction in the price of my Kashflow service.
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