finance for beginners

ON TEST The interface at a glance… Summary window The Company summary window has links to maintenance and set-up tools Main menu The navigator list leads to quick flowcharts illustrating money flow control tools Flowcharts This is for those who want to do it all by hand. Beginners should abandon hope here Reminders Reminders can be customised to nag you when you need to spend money or chase it Everything else Here you can write letters, pay employees electronically and synchronise contacts The new search window includes a built-in database of financial terms Searching Memorised reports These offer financial summaries of your business for you to compare and contrast The new ‘Follow-Me’ help attempts to lead newcomers through the book-keeping maze Help features Services If you don’t already have an accountant, QuickBooks can offer you one INFORMATION PRICE £300 (£255 ex VAT) SUPPLIER Intuit 0845 606 2161 INFO www.quickbooks.co.uk Intuit QuickBooks 2005 Pro oney is a strange thing. It’s remarkable that in an age of online shopping and instant credit card payments, banks still send cheques by post from one branch to another and check religiously to be sure they’ve arrived before they let go of any money. But within this buttoned-down and conservative world, the first faint stirrings of electronic transaction technology are beginning to make themselves felt. In reality, bigger corporations have been using electronic transactions for a couple of decades now, and it’s only the hidebound banks that have been keeping the technology out of the SME mainstream. Now the Inland Revenue and Customs & Excise have started to allow – even encourage – online filing POWERFUL ACCOUNTING SOFTWARE REQUIREMENTS CPU 250MHz or faster RAM 96MB minimum OS Windows 98 or later M IN A NUTSHELL Intuit QuickBooks 2005 has taken the e-finance promise to heart and reinvented itself as a one-stop financial data server. It will do all the usual things you would expect from an accounts package: VAT, tax and payroll. and payment, and have begun to make refunds electronically, too. In theory, this adds up to new opportunities for accounts packages, which can make a play for market share in key areas of e-finance. In the past Let’s start with a recap of what earlier versions of QuickBooks have been about. QuickBooks has always been one of the more comprehensive accounting packages. It would be a mistake to assume it’s just bookkeeping software and nothing else. It’s more like an integrated back office, with a database of contacts linked to their financial status – and, of course, your own too. In the last few versions, the basic book-keeping tools have been buried under a flood of other features that can be used to keep track of incomings, outgoings and stock levels, so stock control can use any units you define. There are the usual reports and summaries, including VAT, profit and loss, past and future cash flow, and essential extras such as the ability to handle multiple currencies. Also included are projections of various sorts, as well as reminder flags to warn you to pay money or chase incoming payments; to buy stock, and so on. QuickBooks 2005 Pro includes a variety of projections, as well as reminder flags that nag you to look after your finances. Feel the power All this power requires a certain level of financial savvy if you want to get the most from it. This is a dilemma for any accountancy package, and QuickBooks tries hard in this area without quite becoming as easy to use as it would like to be. If you know what you’re doing, it’s really not that hard to use, but if you want something that you can slap onto a PC so you can sort out your books, it will initially seem a challenge. In this version, Intuit has made an attempt to hide some of the complexity and reserve it for more expert users, while hand-holding beginners with extended help. The key features here include a new help pane and a separate list of searchable background topics. If you’re looking for a good grounding in book-keeping and basic accountancy, these provide a decent introduction. But if you’re starting from scratch, the ideas and practices can seem overwhelming and, realistically, you’ll need to allow a week or two to get up to speed with what’s possible. Above the help panes is a navigator list that features diagrammed representations of which way the money flows. You can click on these to show the relevant transaction pages. To calculate the payroll, click on ‘Pay Employees’ and you’ll see the payroll set-up window with access to details of who’s paid what, and when. There’s a reminder of the end-of-year process in the same diagram. This kind of semi-graphic flowcharting certainly makes life easier, but you’ll still need to 56 PCPlus 228 | April 2005 ON TEST understand the overall picture of how these details fit into the tax, VAT and general accounting picture. The other big new feature is e-finance support (see the box below). This is enthusiastic but rather patchy, and some features that may have seemed essential, or at least useful, appear to be missing. The attraction of being able to set up BACS payments from within QuickBooks is considerable, and means that printed cheque-runs can become a thing of the past. The downside is the cost. Cheques are still cheaper, if not as convenient, and it will be interesting to see what kind of take-up there is among smaller companies for these new services. Big, little, huge For those who want a more advanced solution, there’s the QuickBooks Accountant package for £499. This adds a ‘remote access’ feature that enables an accountant to look through your records and collate them for their professional use. It’s a tool with a lot of potential, because details no longer have to be sent by hand, and the visiting professional can slice and dice your financial data in ways you may not have thought of yourself. It also means that you can do your books remotely, from any Internet connection, enabling you to access company accounts outside of office hours. For start-ups, there’s an improved business-plan wizard, which will take you through the first three years of trading to create a final picture of your proposed company’s health. This can be exported as a PDF or Excel file, so you can include it in a presentation or email it to potential investors. But what about criticisms? On a very basic level, QuickBooks doesn’t do tax. This seems like an odd omission. According to Intuit, its users were more interested in payroll filing than tax reports. It’s possible to justify this on the basis that tax management is best left to accountants. Still, it’s a peculiar feature to leave out. A more strategic question is who QuickBooks is aimed at. SMEs, especially at the very small end, are badly in need of cheap and simple accountancy help. QuickBooks will do the books and keep track of who owes you, and to whom you owe. This makes it useful enough in its own right, but it won’t make the kinds of money-saving suggestions that a good accountant will. Chances are, if you’re not doing your own books, you’re paying someone to do them, and there’s usually little cost incentive to take the time and trouble to do all the menial work yourself when it’s easier and less hassle (and, in terms of time, often cheaper) just to bundle it all up into a carrier bag and take it your accountant’s office once a quarter. There’s a huge gap in the market for a product that doesn’t just do the basic book-keeping but also uses intelligence to minimise tax bills as well. QuickBooks isn’t that product, and if you’re a sole trader, for all the reasons just mentioned, it’s not necessarily a winning proposition. For larger companies with an annual turnover of six figures upwards and a handful of employees, it will handle the complexities with ease. In its own market, QuickBooks 2005 is a success. Intuit is now in danger of taking on Sage and becoming the new standard in accounting software. But it’s not a pocket accountancy-and-tax solution for the perplexed and disinterested. It Memorised reports give you financial summaries of your business. These enable you to compare records and check for trends in spending and income. will do your VAT and payroll for you, but it won’t juggle the numbers to minimise your corporation tax. And if you’re new to book-keeping, there’s a fairly stiff learning curve to climb before you can work out which sections are essential and which are window dressing. The e-finance features are attractive, but they only really come into their own when your turnover becomes substantial, and the number of transactions you need to make benefits from automation. If you’re selling a couple of things a month on eBay, it’s not the best option, but for the larger established business, staffed by at least one person with professional book-keeping experience, it’s a sensible choice. Richard Wentk PCPlus ratings INTUIT QUICKBOOKS 2005 PRO Value Features Performance OVERALL 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 6 6 6 7 7 7 8 8 8 9 10 9 10 9 10 8 Quick e-finance for beginners E-finance support is enthusiastic, but some key features are missing Intuit is pushing the new e-finance features on the assumption that e-businesses will find them crucial, but close inspection reveals a mixed story. On the plus side, there’s integrated online payroll filing. In its generosity, the Inland Revenue has decreed that companies filing their payroll online will be given a small bonus (£250 this year, winding down to £50, and then eventually nothing). So using QuickBooks 2005 to file payroll electronically means it will pay for itself quickly. Even more interestingly, QuickBooks can link up directly with your business bank account and automatically create a reconciliation. Unfortunately, you can only use the service with Barclays for now. Two other related services are integrated: WorldPay credit card receipts and BACS payments. BACS payments are electronic fund transfers that replace a cheque and place money directly into the recipient’s account. They’re suited for payroll and salary work, but they can also be used to pay suppliers. The biggest advantage of the electronic approach is no wasted time printing and sending cheques. And records can be stored electronically, rather than pile up to form the usual office paper mountain. The credit card transfers can be linked to a website, so customers pay WorldPay, WorldPay pays you, and QuickBooks logs the transaction automatically. Both BACS and WorldPay require a monthly subscription of around £25 each, with extra costs for each unit transaction. These features are useful if you do a lot of business online. So what’s missing? Online filing of VAT seems to be missing. This would have presented a much neater e-finance solution if it had been included. You can always pay VAT by BACS, but you still have to print out your quarterly form and put it in an envelope. ■ Having BACS and WorldPay integrated only really makes sense if you do a lot of buying and selling online. PCPlus 228 | April 2005 57