the essential pocket guide series

The Accounting Toolkit

The must-have guide for every Australian small business
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Contents
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EDITORIAL Editor: William Maher: wmaher@bit.com.au Art Director: David West Creative Director: Sam Grimmer Contributors: Daniel James, Debra Anderson, William Maher, Leanne Berry SPECIAL THANKS TO Debra Anderson: Legally BAS Pam Madytianos: 2 Peas Leanne Berry: Love Your Numbers Kelvin Deer: Australian Bookkeepers Network ADVERTISING Phone: (02) 8399 7619 Fax: (02) 8399 3622 Advertising Manager: Daniel Baddeley: dbaddeley@bit.com.au ORDER PRINTED COPIES Contact Daniel Baddeley: (02) 8399 7619 dbaddeley@bit.com.au

 hy care about W accounting software?

How it can make your life easier

What if Im using  Excel or paper?

The pros and cons

16 Cloud vs Desktop 22 The software

 Why switch to the cloud?

 Compare the range from MYOB, Reckon, Xero, Intuit (QuickBooks Online), Saasu and Cognito (MoneyWorks).  Essential steps to setting up your accounting system 

36 Setting it up

The BIT Essential Pocket Guide Series is published by Haymarket Media Pty. Ltd. Company registered in Australia, ABN 61 083 063 914. This publication may not be reproduced or transmitted in any form in whole or in part without the written permission of the publishers. LIABILITY: While every care has been taken in the preparation of this magazine, the publishers cannot be held responsible for the accuracy of the information herein, or any consequence arising from it. BIT logo is a trademark of Haymarket Media. All editorial items are the copyright property of Haymarket Media. Copyright 2013. All rights reserved.

o I need a 38 D bookkeeper?
The basics explained

40 Useful extras

 Pick from these add-ons that can help you run your business

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Welcome
hatever goals you have for your business, making a positive change to the way you manage your nances is an important step. Not only will tax time be less stressful (we hope), but more importantly, you will be able to plan for the future - whether its having enough money to meet large expenses, predicting ups and downs in cash ow, or starting a new part of the business. Modern accounting tools promise to make all this easier, especially as your business starts to get more complicated. This guide has been written to help you understand how accounting products can assist you, whether or not you already have computerised bookkeeping. Youll learn what to look for, the difference between well-known products and common mistakes to avoid. As is often the case with these things, getting some solid advice from a professional can go a long way to putting you on the right path. We also hope this guide helps you in some way. For more useful tips about key IT topics like this, visit our website at BIT.com.au.
WILLIAM MAHER Editor, BIT (Business IT)

Youll learn the difference between the well-known products and common mistakes to avoid

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Why should I care about accounting software?

Thousands of small business people are switching to the latest accounting software.
rior to the year 2000, a lot of small business people got by quite happily using paperbased accounting systems. But the introduction of the GST meant many people switched to using accounting software. Since then, tens of thousands of small business people have started using accounting software to do their bookkeeping. Thousands are also signing up to use cloud accounting services. The right system will help you keep on top of all sorts of things: from doing your BAS to keeping track of where your money is going, paying your staff (if you have any), superannuation and planning ahead so you dont run out of cash.

If youve been using the same accounting software for years, you might be pleasantly surprised at whats changed. Typing all those receipts into your computer at the end of each week might no longer be necessary. Your accounting package can link to your bank account(s) and automatically match a bank transaction it sees in your bank account with an existing item in your books. If you take a lot of taxis and want to keep records of those

Typing all those receipts into your computer is no longer necessary.

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WHY SHOULD I CARE?

receipts, or you need to keep track of whats being spent on supplies, the software can not only automatically record it but also organise it by category, so you know where your money is going. If you need to submit a BAS, it can help with that too. Some packages have a BAS report (the terminology may differ) that can be generated with a few clicks of the mouse. Some versions can even send it to the ATO for you - no lling in a piece of paper any more. You dont even need to buy a stamp. Apart from helping with the end-of-quarter and end-of-year chores, a computerised system really does make it easy to determine your exact position at any time (provided you keep up to date with data entry). If you have problems with cash ow, having this data in your computer makes it easier to plan ahead. Better still, if youre lucky enough to be able to afford an accountant or bookkeeper, they can be using it to keep track of your business and help you with advice. With the right system, you dont even need to send them a DVD or USB key with your data - theyll already be able to see it on their computer. Above all, you probably didnt get into business to spend all your time doing bookkeeping. So it makes sense to have a system that will make this part of your job easier.

6 ways an accounting system can help me

Easier to do your BAS. Easier tax time: If youve set things up correctly, you wont have as big a mess to sort out at tax time. Less effort sorting out staff pay, superannuation, stock expenses, customer credit. Know how much money you have: See a prot/loss and balance sheet when you need to. Plan ahead so youre not caught short by a big tax bill. Spend less time ddling with receipts: Get the system to record as much as possible automatically.
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Why change what Im doing?

If you use paper or a spreadsheet to keep track of your money, read on
heres nothing wrong with staying with a paper-based system if it suits your business. We survey around 1,000 bookkeepers each year, and 13% of them still offer a manual bookkeeping system, says Kelvin Deer, a director of the Australian Bookkeepers Network. Manual can be cheap, and easy to handle if the requirements are basic. If you are a taxi driver, for example, your records will probably be very simple. You collect cash and credit fares

Handing over a shoebox could be an expensive exercise

from customers, pay a rental to the taxi owner or operator and incur a few other expenses. Its hard to see why anyone would not stick with paper records in this situation, and the ATO even provides a worksheet for taxi driversto record their takings and
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expenses. But if you hand over a shoebox of records and expect your accountant to turn it into a pristine set of accounts, that could be an expensive exercise at $150 to $200 per hour, Deer warns. You might get by with a set of spreadsheets. A lot of tradies, for example, dont use packages at all. Its a lot easier for them to type the information into a spreadsheet, says Deer. Since many dont have any staff, they dont have to worry about payroll. The downside comes when you go along to your accountant at the end of a nancial year, and have to pay to have that spreadsheet turned into a balance sheet and prot and loss statement. Accounting software comes into its own as things get more complicated. Unless you put in extra effort, determining who owes you what can become a time-consuming process with a manual system.

WHY CHANGE

Handy forms
You can download a copy of a basic record-keeping system from the ATO which you can use, including sample cashbooks and activity statement. Click here The ATO also offers a set of blank forms that can be printed and used to keep the nancial records of your small business. You can buy duplicate receipt and invoice books and other business stationery from newsagents and office suppliers. Click here Want to know how to deal with GST, super, PAYG and other tax basics? You can download guides for all these topics and others too. Click here

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KEEP TRACK OF YOUR BANK AND CREDIT CARD TRANSACTIONS

These days most accounting software packages can link to your bank and credit card accounts, meaning you dont have to type the transactions in yourself. And you can enter a rule that says when the word parking appears on your credit card, it will be allocated to the expense account for parking.

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EASILY PRODUCE A PROFIT AND LOSS REPORT

Accounting software is specically designed to produce a variety of different reports to help you run and manage your business.A favourite is the Prot & Loss report which shows you what your income and expenses are for a selected period and whether or not you are actually protable or not.

MAKE SURE YOURE PAYING STAFF THE RIGHT AMOUNT

When it comes to payroll, Excel cant compete with accounting software. There are rules about payslips, leave entitlements need to be managed and lets not forget superannuation and PAYG withholding taxes. Using a software package such as MYOB LiveAccounts or others can help you ensure you are paying the correct amount to your employee, taking out the correct amount of tax by always having up to date tax tables and paying the right amount of superannuation.

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WHY CHANGE

THINGS YOU CAN DO WITH ACCOUNTING SOFTWARE

(YOU CANT DO THESE IN EXCEL)

NO MORE HANDWRITING ATO PAYMENT SUMMARIES

Accounting packages can produce these for you. Another timesaver.

AVOID PAYING MORE SUPERANNUATION THAN YOU HAVE TO

Most people dont realise that you dont need to pay superannuation if employees earn less than $450 per month by using an accounting package these parameters are usually already built in so you arent paying more than you need to.

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Start planning ahead

Staying on top of things.
o a large extent, your books act as a rear-view mirror. They tell you where youve been, not where youre going. But if you stay on top of the bookkeeping, you wont be looking so far back down the road - youll be a lot closer to where you are than where youve been. If your books are computerised, any reports you need can be generated with very little effort. But if youre using paper, then turning those paper records into a prot and loss statement or even just checking whether you should have enough cash on hand to meet a large pending expense, can take a signicant amount of work. Why does any of this matter? For one thing, if you want to borrow money from a bank or other lender, theyll expect to see your nancial records, among other things. If those records are already up to date

You can set aside just the right amount of money.

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it will save you making a special effort, as well as helping to project an image of a responsible operator who is in control of their business. If you use an accountant, up to date books will also help them provide you with more accurate and timely advice. Examples include predicting cash ow peaks and troughs, and more accurately estimating your future tax liability. Being suddenly told that you face a $50,000 tax bill in a few months can be a strain. An accurate forecast means you can try to set aside the right amount of money. Its always better to be up to date with your accounts, says Ben Vojtisek, senior accountant at MDB Taxation & Business Advisors. Then when you consult your accountant he or she can work with current rather than historical data. Rather than presenting your accountant with the proverbial shoebox full of receipts and other documents, you can provide them with a copy of the data le so they can generate the relevant reports and make forecasts, assuming youve been using the software correctly and been promptly entering transactions. The less time

START PLANNING

the accountant takes to extract the information they need, the less it should cost you. And if you are using a cloudbased system, you can grant your accountant access to your data so you dont even need to provide them with a copy - the latest entries are there whenever they need it. Cloud products are especially handy, says Ben Vojtisek. If a client keeps their books up to date on a regular basis, we can log in, print out a set of reports, work on them quickly to get a good idea of how the client is going at that point in time, and then project to the end of the nancial year to advise them of their likely tax outcome.

Being up-to-date: the benets

If you want to borrow money to expand the business or to cover extra expenses, your bank will expect to see your nancial records. Up to date records make it easier for your accountant to give you more accurate advice and predict peaks and troughs in your cash ow. If you have an accountant, accurate records helps them estimate your future tax liability. Being able to set aside money might help you survive when a big bill arrives. Having your books in order hopefully means less time you have to pay for someone to sort out your accounts at tax time. Its faster to get help sorting out an error. With the right system, a bookkeeper can log in and see your records on their computer.
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Designed by you
Customisable cloud accounting
Reckon One takes a fresh approach to cloud accounting
Only pay for what you need - add or remove modules as required Free Mobile app - work and see your business performance on the go Smart and simple - software thats easy to use Continuous updates and improvements - occurring all year round

Almost 3000 people attended the Reckon One unveiling events

Reckon One, exciting new web based accounting system ! This could be the ONE for your business.. @HainesMuirHill 7:14 - 20 May 13 ...substantially different in approach. (Didnt think possible.) Denitely solid. @BoxFreeIT 5:40 PM - 21 May 13

Click here to be one of the first to try Reckon One

Reckon One grows with your business

Access Reckon One from any device and design your accounting software to suit your business by adding or removing modules and users at anytime.

Core

All you need to get started! Track your performance and plan for the future.

Projects

Manage project revenue and expenses, review progress and forecast nal costs.

Invoices

Create and send invoices in just a few clicks from your PC, MAC, or from the mobile app.

Time & Billing

Track your time and invoice quickly and easily.

BankData

Minimise data entry! Your bank transactions are imported and categorised automatically.

GovConnect

Lodge your BAS from Reckon One, save time and receive real-time feedback.

Pick your accounting system

Heres what to look for
o choose the best product for you, it helps to follow some basic rules of thumb. First, there is no one best piece of small business accounting software, as different packages will suit different businesses. If you provide services you might not need an inventory module, or if you are a retailer you probably wont need time tracking and billing facilities. A payroll capability becomes more important as the number of employees rises. Dont rely on a checklist of features. For example, bookkeeper Debra Anderson points out that MYOB LiveAccounts includes payroll, but only at a very basic level so it is not suitable for complicated construction businesses. For that they should be looking at packages such as MYOB AccountRight Plus." Another tip is not to

Be careful about add-on costs they can add up.

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overwhelm yourself by buying a system with too many bells and whistles you don't need. Make sure the product can cope with your needs if things change (is there a payroll module you can add if you hire staff?) Make sure the system is easy to use. Some have much more easy to navigate interfaces. Some of the cloud products are particularly good in this regard. Be careful about add-on costs. Some cloud products charge a low monthly fee for basic features, but if you need a lot of extra capabilities, those add-ons can add up. Don't forget specialist accounting packages - you might nd special products designed for you if you're in retail, manufacturing, restaurant and catering or construction. We recommend getting advice from an accountant or bookkeeper with experience advising on which products to use. Make sure your bookkeeper is open to all the options, even if it means sending you to someone else if they don't deal with the product you need to use.

PICK YOUR SYSTEM

Which type of business is yours?

BUSINESS TYPE TYPE OF ACCOUNTING PACKAGE
Cashbook - unless you want to electronically bill customers on the spot (cloud system might be appropriate). Accounting software with a perpetual software licence might be cheaper than a cloud arrangement. No staff, so no need to update software every year for tax tables. Cloud or cloudenabled middlerange small business accounting system with payroll.

Fencer. Pay upfront for all supplies by credit card, receive cash/ cheque/card payments from all customers. Freelance photographer. All customers insist on credit. Some complicated invoicing. Supplies are paid for by cash, credit card or internet banking. Small coffee shop. No need to track individual customers. No need for inventory. Enough staff to justify computerised payroll. Owner uses a bookkeeper but wants to keep a close eye on the gures. Manufacturing company with complex inventory requirements, many suppliers and customers who extend or receive credit, employees working irregular amounts of overtime.

Consider specialised accounting software or ERP system.

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Choose cloud or desktop

Should you stick with desktop software or switch to a cloud product?
ne of the biggest changes in accounting software is the arrival of cloud accounting. Generally, this approach involves storing your records online rather than on your computer. The benet is that you dont have to install and ddle with software - to access some cloud services like Xero all you need is your Internet browser. It also means you can get to your records on any computer with Internet access - so you can check things if you are at home or at work. Often youll pay a monthly fee. Some people are uncomfortable with the idea of having their nancial records stored online. One way of looking at this is to ask yourself who is better placed to keep your data secure - you, or an accounting software provider that can afford to employ or engage experts? Having your data in the cloud means it should at the very least be in a data centre monitored

by professional IT staff, rather than on a computer you own, with all the risk of that computer failing. What backup and recovery systems do you have in place in case your hard drive crashes tomorrow? That is not to say that cloud services cant go down. Weve seen occasional complaints online about problems connecting to accounting services - though we stress we havent heard of widespread problems in this regard. Of course it goes without saying that you need to make sure you select a strong password that you dont use anywhere else. And it is essential to keep your antivirus software up to date to minimise the risk of being infected by passwordstealing malware.

You can check things whether you are at home or at work.

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CLOUD OR DESKTOP?

Why switch to the cloud?

Your bookkeeper access your records without you needing to send a USB. No software to install (generally). Always the most up to date version. Professional backup and protection for your data. Access your records from home or work. Staff can record sales from a job site.

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Pick the features you need

These arent the only features you should consider, theyre just a starting point.
Cloud / Desktop (OS) There are basically two places where accounting software can run: the computer on your desk (or lap), or on an Internet server that you access via a web browser or (possibly) a mobile app. Maximum simultaneous users with basic licence Don't worry about this if you are a one-person business, or if one person does all your accounting work. But if you have two or more salespeople and want them all to be able to create invoices at the same time, check to see if you'll have to pay for additional licences - especially if you think you'll be putting on a lot more staff. Restrict user access What if you want to give more than one person access to the accounts, but you want to restrict who can access different things? For example, you might allow your salespeople only to create invoices, while your accounts person would be also
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allowed to enter bills. Other functions, such as actually paying bills could be reserved to you.

NOTE
If a particular feature like payroll is important to you, its vital that you check in greater detail. Does the package cater for the number of people you expect to employ? Are you looking to automate the transfer of superannuation contributions to the relevant funds?

Lists of items that you buy / sell This seems like a very basic function, but it is not always provided in low-end editions of accounting packages. You really dont want to have to type in all the details every time you buy or sell something. Its far more efficient to create an item once (for example, 5mm brass widget, service call and so on), and then use the keyboard or mouse to pick the one you need from the list. It also helps to reduce errors, because the invoice elds for price,

FEATURES

tax code and so on can be automatically lled-in. Lists of customers / suppliers It also makes more sense to capture this information once and then reuse it every time you enter a bill, pay an invoice or send a statement. If you have any foreign customers, it is helpful if the software lets you assign an override tax code for them so that items that would normally attract GST are automatically shown as GST-free exports when you invoice those customers. BAS report The ability to generate a BAS report is a near-universal feature of the systems covered in this pocket guide. We prefer it when the accounting package creates a BAS that matches the ATOs paper form (it makes it easier to ll-in the ATO form), but as long as it includes the item labels then transcribing the data is still straightforward. There are also some products that let you submit the actual form to the ATO over the Internet (no envelope needed). If thats important to you, be aware that relatively few products support it at the time this was written. Quotes In some types of business plumbers and electricians are good examples - it is common practice to provide customers

with a written quote. If that applies to you, it saves time and effort if the quote can be converted into an invoice if the transaction proceeds. Jobs This is another feature that some people need and some don't. In some situations it is important to be able to link all the costs (possibly including staff time) and income relating to an individual job or project, so you can keep track of the protability of that project. Some accounting packages let you do this by tagging jobs. You can apply a unique tag to all items associated with a job, and then generate reports that are ltered by that tag. Invoices with online payment options Beyond cashbook programs, the ability to generate an invoice is central to accounting software. A feature that sets

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some systems apart from others is the ability to include a link in an electronic invoice to an online payment facility such as a credit card gateway or PayPal. Your customer can click the link to pay online. This is especially useful if you email invoices to customers, as some argue it's more likely they will pay almost immediately when presented with this option. Bank feeds One of the best ways of cutting

down on bookkeeping time is to make use of bank feeds. The idea is that transactions on your chequeing and credit card accounts become a primary source of transactions in your system. Rather than manually entering a cab fare into your accounting software, the software sees a credit card transaction in your bank account with the name of your usual taxi company, creates an expense, and automatically classies it under travel. And when a customer pays money into your bank account, the software matches the deposit with the corresponding invoice. Inventory Inventory allows you to keep

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FEATURES

track of the products that you buy and resell to customers. Apart from reecting the value of stock in your books, integrating inventory with the rest of the accounting system means that the records are adjusted when you make a sale or receive a delivery. An inventory function can also warn you when the stock of an item falls below the re-order level. You wont need inventory facilities if you run a services business or only buy-in items in response to a rm customer order; for example, if you are an IT consultant looking after small business clients and you sometimes purchase and install hardware or software items for them. Time tracking and billing In a way this is the other side of the inventory coin. A service businesss product is billable hours rather than tangible goods, and so it needs a way of capturing the amount of time spent on different tasks and then billing the clients appropriately. In some situations, these features can be usefully integrated with jobs (above) and payroll (below). Payroll Payroll is fairly self-explanatory. If you employ people, you need to pay them. But you dont necessarily need a special payroll function if you only have a few employees and the

employment arrangements are straightforward - you can calculate the payroll manually, and then make the payments in the form of cash, cheque or bank transfer. Mobile device support The anecdotal and research evidence all seems to point to smartphones and tablets becoming more and more important to small business operators. The ability to generate an invoice while on the customers premises or to quickly check some key measures from home in the evening without resorting to a computer can be a blessing. Multiple currencies For the majority of small businesses, multiple currency support isnt a nice to have feature. You need it if you buy or sell items priced in foreign currencies and you need to see the effect of fluctuating exchange rates until the money changes hands. You dont if you only do business in Australian dollars or your foreign currency transactions are so few and low in value that fluctuations have no significant effect on your position. Where it is needed, the problem is that in general it only comes in the more expensive products from each vendor, so you may be faced with paying for other features that you dont require.
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MYOB
YOB has been progressively moving its products into the cloud. There is LiveAccounts, which is a cloud-only product, while the AccountRight range can be used as desktop software, from the cloud, or both. With AccountRight your data can be stored in the cloud and the software can either access it there, or from a copy kept on your hard drive that is kept in sync whenever theres a live Internet connection. The important thing to keep in mind is with AccountRight, you have to install the software on the computer youre using - you cant just use a Web browser, like with LiveAccounts. If you dont want to pay a monthly fee, you can also pay for an upfront licence for version of AccountRight. Thats if you prefer not to use the cloud features. MOYB has also offers the AccountEdge range for Macs. Its also signicant that most of the MYOB range includes M-Powered Invoices (an online payment service), actually built-in. Additional access and per-transaction fees apply if you actually use this capability.

MYOB PRODUCT FEATURES

Live Accounts AccountRight Live Basics

Price Cloud / Desktop (OS) Maximum simultaneous users with basic licence Restrict user access Lists of items that you buy /sell Lists of customers / suppliers BAS report Quotes Jobs Invoices with online payment options Bank feeds Inventory Time tracking and billing Payroll Mobile device support Multiple currencies

$29/month Cloud Unlimited

$29/month or $339 upfront* Cloud/Desktop (Windows) 5 plus business advisors (1 for upfront licence)

* Upfront licences are for offline use on a single computer; MYOB says this feature is coming; Works in browser, but no specic mobile support 22 brought to you by

MYOB

AccountRight Live Standard

AccountRight Live Plus

Account Right Premier

$1,999 Desktop (Windows) 3

Account Edge Basic

$299 Desktop (OS X) 1

Account Edge Pro

Account Edge Network Edition

$2,049 Desktop (OS X) 3

$39/month or $539 upfront* Cloud/Desktop (Windows) 6 plus business advisors (1 for upfront licence)

$58.50/month or $863.10 upfront* Cloud/Desktop (Windows) 7 plus business advisors (1 for upfront licence)

$949 Desktop (OS X) 1

Note: We cant t every product on the market on these pages. Each of the companies was asked to conrm they were happy with the choice of products you see here. Check their web sites for other products not listed here. Remember that just because a certain feature is missing from a product does not mean it is not available as an add-on from the same vendor or a third party.
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Reckon
eckon has a major new cloud version coming called Reckon One. It wasnt officially available at the time this was written (note: we did show the table on the right to Reckon, but they didnt ask that Reckon One be included). One very interesting aspect of Reckon One is that you will pay for a core module, then youll be able to select inventory, payroll, time and billing, and other capabilities as you need them, without paying for those you dont. Meantime, Reckon has the desktop software Reckon Accounts (formerly called QuickBooks). Theres also Reckon Accounts Hosted, which is a sort of cloud product youre basically running a copy of the Accounts software on Reckons server. As much as we like the Reckon user interface, unless you pick Accounts Hosted you have to select the pricey Accounts Pro version just to get support for quotes, a feature thats required by smaller businesses such as tradespeople working alone or with a single employee. Thats also the case with time tracking and billing, which can be important for solo consultants that divide their time between multiple clients each month.

RECKON PRODUCT FEATURES

Accounts EasyStart 2013
Price Cloud / Desktop (OS) Maximum simultaneous users with basic licence Restrict user access Lists of items that you buy /sell Lists of customers / suppliers BAS report Quotes Jobs Invoices with online payment options Bank feeds Inventory Time tracking and billing Payroll Mobile device support Multiple currencies $195 Desktop (Windows) 1

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RECKON

Accounts Accounting 2013

$445 or $199/year Desktop (Windows) 1

Accounts Plus 2013

$829 or $380/year Desktop (Windows) 1

Accounts Pro 2013

$1049 or $460/year Desktop (Windows) 1

Accounts Hosted
$435/user/year Cloud 1

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Xero
ike Saasu, Xero is cloudonly accounting software. It hasnt been around quite as long, having been founded in 2006, though its board does include MYOB founder Craig Winkler along with other experienced technology and business executives. The pricing model is more closely tied to volume, with little - though in some cases signicant - variation in features. The $29 plan is limited to ve invoices, ve bills, 20 bank statement lines and one payroll employee. The $49 plan expands this to hundreds of transactions and 20 payroll employees, and the $64 plan allows hundreds of payroll employees, automated superannuation payments and adds multi-currency support. The companys practice is to make frequent minor improvements to the software rather than occasional big bang updates. One of the most recent changes is to allow users designated as nancial advisor to search across all the history and notes records for audit purposes, for example to see all actions

performed by a particular user over a certain time period, or to see all payments made from all bank accounts in the last month. Perhaps more than any other accounting software weve seen, Xero takes advantage of the online environment with support for transactions between Xero users, online payments (PayPal or credit cards), Skype integration, and the provision of a mobile-specic site as well as iOS and Android apps.

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XERO

XERO PRODUCT FEATURES

Xero Small
Price Cloud / Desk-top (OS) Maximum simultaneous users with basic licence Restrict user access Lists of items that you buy / sell Lists of customers / suppliers BAS report Quotes Jobs Invoices with online pay-ment options Bank feeds Inventory Time tracking and billing Payroll Mobile device support Multiple currencies (manual process) (manual process) (manual process) $29/month Cloud Unlimited

Xero Medium
$49/month Cloud Unlimited

Xero Large
$64/month Cloud Unlimited

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QuickBooks Online
(Intuit)
ou might remember QuickBooks in Australia as the desktop software previously marketed by a company called Reckon. Things have changed, and now QuickBooks in Australia refers to the QuickBooks Online cloud service, operated by a company called Intuit. The software formerly known as QuickBooks has been renamed Reckon Accounts. There are three plans. Each progressively adds features and reports, but even the cheapest includes bank feeds and quotes. Perhaps the biggest difference between Simple Start and Essentials is that the latter allows you to track bills that you have received but not yet paid. Whether that is important to you arguably depends on how carefully you need to manage your businesss cashow. While there is no payroll support, QuickBooks Online does integrate with the Web Payroll cloud service, and if you have no more than 10 employees you can use that service free of charge. For 11 to 20 employees it costs $20

per month. Although $15 per month for Simple Start sounds cheap, thats $180 per year. Thats getting close to what were used to paying for a perpetual software licence for entry-level desktop software, which doesnt need updating every year if theres no payroll, as the latest tax tables arent needed. Were not picking on Intuit though - a similar criticism could be made about other cloud accounting software.

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INTUIT

QUICKBOOKS ONLINE PRODUCT FEATURES

QuickBooks Online Simple Start
Price Cloud / Desk-top (OS) Maximum simultaneous users with basic licence Restrict user access Lists of items that you buy /sell Lists of customers / suppliers BAS report Quotes Jobs Invoices with online payment options Bank feeds Inventory Time tracking and billing Payroll Mobile device support Multiple currencies $15/month Cloud 1 (plus 2 accountants / bookkeepers)

QuickBooks Online Essentials

$25/month Cloud 3 (plus 2 accountants / bookkeepers)

QuickBooks Online Plus

$35/month Cloud 5 (plus 2 accountants / bookkeepers)

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Saasu
espite being a purely cloud accounting system, Saasu has been around for over a decade. The product is offered in four plans - as the price increases, so do the number of features. The two cheaper plans are also limited by the number of transactions allowed each month. Moving from $9 to $20 a month increases that transaction limit from 50 to 200 and the number of bank feeds from one to three. Going up to the $35 plan removes the transaction limit and allows you to use more features. June 2013 saw the rollout of Saasu 1.5, which featured user interface revisions plus some performance improvements. The company has positioned the 1.5 release as an important stepping stone to Saasu Mk II. The plan is to creep up on that goal with more frequent updates addressing

certain features. In particular, Saasu aims to provide better support for mobile devices, and to couple accounting processes more closely with business processes to reduce the administrative workload and to deliver more up to date information.

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SAASU

SAASU PRODUCT FEATURES

Saasu Extra Small
Price Cloud / Desk-top (OS) Maximum simultaneous users with basic licence Restrict user access Lists of items that you buy/sell Lists of customers / suppliers BAS report Quotes Jobs Invoices with online pay-ment options Bank feeds Inventory Time tracking and billing Payroll Mobile device support Multiple currencies $9/month Cloud Unlimited

Saasu Small
$20/month Cloud Unlimited

Saasu Medium
$35/month Cloud Unlimited

Saasu Large
$60/month Cloud Unlimited

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MoneyWorks
(Cognito)
distinctive feature of Cognitos MoneyWorks range is that it is available for the Mac (OS X) as well as Windows. Thats not just important to businesses that exclusively run Macs - the software can also be used on networks that have Windows PCs and Macs. While MoneyWorks does not include payroll functionality, the company suggests this is an advantage because it means theres no need to pay for annual upgrades just to get the latest tax tables or support for other payroll-related changes. And if you operate under a more complex business structure, one MoneyWorks licence can be used

with multiple company les. MoneyWorks 6.1 is the current version at the time we are writing this and it has been out for well over a year. One of the key changes was to make it possible for mobile and web apps to be created that can access data stored in the upmarket Datacentre edition of MoneyWorks. MoneyWorks has particularly exible invoicing capabilities. We especially like the way it handles the situation where invoices must sent to different branches or divisions of a company but payment is received from a central location. Unlike Xero, Reckon and others, though, Cognito does not offer MoneyWorks as a cloud service.

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MONEYWORKS PRODUCT FEATURES

MoneyWorks Express
Price Cloud / Desk-top (OS) Maximum simultaneous users with basic licence Restrict user access Lists of items that you buy /sell Lists of customers / sup-pliers BAS report Quotes Jobs Invoices with online pay-ment options Bank feeds Inventory Time tracking and billing Payroll Mobile device support Multiple currencies $450 Desktop (Windows / OS X) 1

MoneyWorks Gold
$895 Desktop (Windows / OS X) 1

MoneyWorks Datacentre
$2,995 Desktop (Windows / OS X) 3

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Reckon One 1st impressions

Reckon One is colourful, intuitive, and simply a pleasure to work with; its a very easy program to pick up and understand. John Peppas, owner of Queensland Business Consultants

Reckon has really listened to a variety of professional opinions to get this product right. Robyn Kelly, Bookkeeper

Click here to be one of the first to try Reckon One

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Accounting with security & condence

Over 600,000 Businesses use Reckon products Over 6,000 partners use Reckon products Over 400 employees Australian owned and ASX listed Operating for over 25 years

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Next: Setup your system

Once you have chosen the software, whats next? Without setting things up properly, you could end up with a mess. Here are 5 things that should be setup correctly.

The Chart of Accounts for any accou nting package is the engine that drive s the software. It break s down the classication of your nancial data into dened areas of accountability for Asse ts (things you own), Liabilities (things you owe), Incom e (derived from sales of goods/ser vices), Cost of Sales (direct costs for making the incom e) and Expenses (cost s for operating your business). Setting it up correctly allows you to 2. Linked Accounts monitor, repor t on and evaluate e are a every aspect of your business. In the Chart of Accounts ther to be num ber of accounts that need that the linked correctly to ensure kkeeping are effects of double entr y boo e there is correct. For ever y sale you mak e debtor an accounts receivable or trad there is an to track. For ever y purchase itor to accounts payable or trade cred track GST track. Linked accounts also e. Set this up collected and paid and mor correctly so you know who owe s you money.
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1. Chart of Accounts

SETUP YOUR SYSTEM

3. Payroll

roll is onerous on The com ple xity of pay uring the correct ens s ude incl busines s. It ry to calculating sala ual ann or e hourly wag nts such as me uire req nal all the additio and sup er GW PAY , nts me leave entitle ing, bonuse s and liabilities, salary sacric s terminations, allowances , penalty rate missions, com , pay k bac ies, redundanc ng all the vidi pro n the and s fringe benet ment pay of nts me uire req com pliance nt of liabilities like sum maries and pay me and pay roll tax . PAYG, sup er, Workcover ectly you can corr up set are When the se . hes dac hea and e minimis e tim

4. Taxation & Statutory Compliance

nagement Controlling th e ow of good s through your busines s or m anufac turing goods for sale from raw mat erial s to nish ed produc ts is a key com pone nt of succes sf ul inventory managem ent. Inventor y is a major as se t for a busines s. Automate this and you can ensure co rrect stock lev els , develop an optim um pr oduc t mix, m on understand m itor cost s, ar gins, analyse wo progre ss , track inventory turn rk in over rate s, automatically bu nished produc ild raw material s into ts and m ore.

5. Inventory

Ma

Our taxation system is complex and subject to change and you have an obligation to do regular reporting and payment of various liabilities to statutory authoritie s. When correctly setup in your accounting system, the tracking of these liabilities is made easier and the reports required and lodgement to government can be provided automatically and tracked.

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Who hires a bookkeeper?

Why its a good idea in certain situations.
ost people start a business because they are good at something - be it plumbing, photography or designing - and not because theyre good at paperwork. If you have a simple business - by that we mean you contract to a handful of clients throughout the year, work at home, have no employees and minimal expenses - you can absolutely manage your own bookkeeping either by using simple accounting packages such as MYOB LiveAccounts or even Microsoft Excel. However, accountants meet lots of small business people who are fabulous at what they do, but just dont get the compliance side of running a business. Yet they

TIP
Many Bookkeepers also offer other services like debtor management, management reporting and other administrative tasks that can help their clients achieve their business goals.

insist on doing it themselves to save money. The reality is that these are people who: end up spending more money with their tax accountant at tax time because he/she will need to sort out what has or hasnt been done. risk breaking the law and incurring nes and penalties because they are genuinely unaware of regulations - for example the threshold at which they must register for GST either havent had their system setup properly or are repeatedly making the same mistakes - so their accounting system is not giving them an accurate picture of how their business is actually performing.

Your accounting system might not be giving you an accurate picture of how your business is actually performing.
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BOOKKEEPERS

You might need a bookkeeper when...

You are too busy to do your invoicing Weve all heard the mantra cash is king. The minute you get too busy to send out invoices then cash ow will suffer.

2 When customers arent being

chased for money When your customers arent paying and you dont have time or you dont want to chase them because you dont want to risk the relationship.

3 When things become more

complex A frequent misconception is that if you only hire contractors the rules dont apply. This is far from true. Bookkeepers can advise. bookkeeping

4 If you are really behind in your

Many people dont realise there are time limits stipulating how long after the event you can actually claim.

5 If you are consistently late

lodging BAS or tax returns The ATO are getting serious about late lodgements, with nes of up to $850. Fines are not tax deductible professional BAS agents fees are.

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Really useful add-ons and extras

See what these handy add-ons can do for you.

Bank feeds
Instead of typing transactions into your accounting software, the system automatically sees transactions in your bank account and records them in your accounting software.

Cloud backup
In some cases, third-party backup services exist to automatically and regularly extract your data and make it available to you if your accounting provider has a catastrophic failure.

Customer Relationships
While some packages include basic CRM functions, many businesses require something more advanced. Its easier if details ow between the two systems to avoid re-entering data.
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Dashboard
While any decent accounting system can provide you with important information about your business, a dashboard puts the crucial gures right in front of your face.

ADD-ONS AND EXTRAS

Data capture
Your accounting software may not be able to read the invoices you receive, but there are services that take PDF invoices, extract the details and feed them into your accounts.

Debtor tracking
Automating your debtor tracking and invoice chasing can save time and keep that side of the relationship on a more businesslike and less personal level.

E-commerce
Can dramatically reduce the amount of manual processing and keep the books up to date. Typically achieved through connector software that bridges the two systems.

Expenses
Make it easier for staff to record and substantiate their expenses. A mobile phone app may be a component, allowing staff to photograph the receipt and enter the important data.

File storage
Invoices and receipts need to be stored for a period. Being able to attach digital documents (eg. PDF invoices or scans of those received on paper) makes it much easier to nd them.

Human resources
It can be a ne line between payroll and human resources. With a payroll function a roster can ow into a timesheet and into the number of hours an employee must be paid.
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Industry-specic management software

Rather than doing all the work these programs often integrate with accounting programs. That way you get software from the experts.

Inventory
Dont rule out accounting software if it doesnt have this function - its an addon for some packages. With real-time integration you always know where you stand.

Job management
Its basically about keeping an eye on protability, making sure that the correct prices or rates are applied, and perhaps also being able to see that projects are progressing.

Membership
If you run a membership-based organisation such as a private club, membership management software that integrates with accounting software can be a timesaver.

Mobility
This might let you check on key information at any time, entering orders or invoices while in the eld, or being told which client you need to visit next.
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Office tools
Useful for merging accounting information into a form letter, or to create a new invoice with items based on rows in a spreadsheet. Or simply keep both sets of contacts in sync.

ADD-ONS AND EXTRAS

Pay now
Its becoming increasingly common practice to send invoices by email, and a growing number of accounting packages let you include a link to a web page where your customer can pay.

Payments
Being able to generate an electronic payment from the accounting system can be a time saver. Think of it as the modern equivalent of printing cheques rather than writing them by hand.

Payroll
Some systems provide employees with online access so you dont need to print and distribute payslips. They may also enter leave requests, timesheet details and so on.

Quoting/invoicing
in any situation where you have to provide a quote its far more convenient if it ows into the accounting system if the job goes ahead.

Point of Sale
In most cases you want the POS system to be integrated with the accounting system. That helps keep books up to date and eliminates the laborious task of transferring data.

Reporting
All accounting programs provide at least the basic reports, but in some cases you need to opt for a moreexpensive version to get a full range or the customisability you want.
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Designed by you Customisable cloud accounting Designed by you

Customisable cloud accounting

ReckonOne.com
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ReckonOne.com