This has been a month of new learnings and research for the Creative CFO systems team as we continue to explore various pieces of software to meet the needs of clients as well as our own.  Follow us as we take you on a fixed asset walkthrough, harnessing all that DEAR has to offer and some scheduling software used by the likes of  Amazon and MacDonald’s – home to the famous Big Mac.

1. Fixed Assets in Xero

Take-ons in an implementation

  • Adding fixed assets
    • Fixed assets may be added to Xero one-by-one or through CSV upload but before you do this you will need to specify some asset types
    • The important inputs are purchase date, purchase price, asset type, opening book accumulated depreciation (being the accumulated depreciation at conversion date) and book value (being the carrying amount at conversion date)
  • Asset types
    • You can create these by navigating to the settings of the Fixed Asset section of Xero
    • Asset types are used to link a fixed asset account, an accumulated depreciation account and a depreciation expense account
    • Asset types also specify certain defaults, such as the depreciation method and the effective life of that asset class

Managing the FAR post implementation

  • Adding new fixed assets
    • Bills allocated to a fixed asset account (which is used in one of the asset types) will populate the FAR with a draft fixed asset
    • A spent money (allocated straight from the bank rec screen to a fixed asset account) will populate the FAR with a draft fixed asset
    • However, fixed assets may also be added manually, the important inputs follow the above and the depreciation start date should in most cases be the asset purchase date
  • Running depreciation
    • This is easy to do by clicking on the Run Depreciation button and the date range specified is malleable
    • As a sanity check, after loading all fixed assets at conversion date, one can run the depreciation for March and check this against the Feb depreciation expense from the old system
    • It is also very easy to roll back and redo depreciation so do not hesitate before running depreciation

Reconciling fixed assets to the balance sheet

  • The Fixed Asset Reconciliation (New) Report
    • This report shows the differences between what is in the FAR and what has actually been allocated to balance sheet accounts
    • This fix asset register does not force inputs to match the balance sheet accounts so discrepancies may arise
    • This includes differences in cost (from the bill vs what was specified in the FAR), and accumulated depreciation (from conversion balances vs what was specified in the FAR, as well as, accumulated depreciation arising from running depreciation in the FAR vs the journal effect of these depreciation runs)

2. DEAR Features

Lock periods

  • Periods should also be locked in DEAR and not only Xero
    • If one locks the periods in Xero only, clients can still process backdated transactions they will just not flow all the way through to Xero as they will be blocked by the DEAR-Xero sync
    • The result of this is that when doing a DEAR vs Xero comparison, revenue and COGS may not match as backdated transactions processed in DEAR would not have entered Xero
    • If one locks the periods in Xero and DEAR then clients will not be able to process backdated transactions in DEAR and the two systems will remain in line
    • To lock the periods in DEAR, navigate to Settings, General Settings and scroll down to Period Lock Date

B2B

The DEAR B2B portal setup is available under the integration options in DEAR

  • We have done more of these B2B setups for clients of late
  • The portal is geared towards regular wholesale customers and it works  excellently as it is quick and easy to give an existing DEAR contact portal access
  • Customers are able to log in and place orders (whilst viewing their own personal pricing) meaning that what the customer sees in the portal depends on their login
  • Customers are also able to track their orders and view the current stage of processing, as well as, access their invoices

3. Deputy Scheduling

The systems team is currently working on the implementation of this software for a new client. It is a brilliant piece of software where users can not only create schedules for their staff, but staff can also track time from a mobile app. Recorded data can then be imported into SimplePay and payroll can be run based on the Deputy hours. We will do a full review of this software in next month’s newsletter (post-implementation).

If you have any questions related to the above or feel like you may benefit from any of the mentioned features, please book a session with the systems team here

Jason Proctor (Creative CFO – Systems Team)

Related Insights.

The Melting Ice Cube Series – Part 1 – Holding Cash: A Melting Ice Cube

Read More

An introduction and high-level overview of the value of management reports [Part 1/4]

Read More

Understanding Key Performance Indicators

Read More

Understanding and achieving a healthy cash flow [Part 4/4]

Read More

An explanation of the balance sheet for business owners [Part 3/4]

Read More

How to Fund your Business and Unlock Growth

Read More

NEW DESIGN – 2020 Tax Filing Season for Individuals

Read More

A business owner’s guide to understanding and working with the profit and loss statement [Part 2/4]

Read More

April has been a busy month so far, with the new South African VAT rate now in full swing. Here is a summary of  what we expectedwhat actually happened and any  systems changes that may still be required.

1. XERO

what we expected

  • New 15% rate added
  • Old rate renamed
  • Default inventory and contact rates changed to 15%

what actually happened

  • The new rate appeared in Xero
  • The 14% rate was only renamed if you were using the Xero defaults (this mainly affected older Xero accounts)
  • Default inventory and chart of account rates changed to 15% (happened around the second week of April)
  • Default contact rates not changed

systems changes that may still be required

  • If you were previously using the Xero default rates and do not assign VAT your contacts then no further updates are required
  • There is a hierarchy used to determine the VAT rate on an invoice or bill which follows the image below:

  • Most Xero users do not utilise the contact VAT rate feature, but if you do you will need to export all of your contacts, update the default VAT rate and re-import them
  • For older Xero users who were not using the default VAT rates in Xero, you will need to update the Chart of Account defaults and any inventory item defaults, yourself

2. DEAR

what we expected

  • New rules to automatically sync from Xero
  • Rules to automatically be applied to SOs and POs (new rule would have the same name as the old rule previously had)

what actually happened

  • Old rates remained customer and supplier defaults if you were not using the Xero default rates
  • If Xero default rates were used in DEAR VAT rates flowed through to Customer, Supplier and Product setup correctly

systems changes that may still be required

  • If you were using rates which were not the Xero defaults then you will need to export all of your customers, suppliers, and products, update the default VAT rate and re-import them
  • The correct VAT rate names to include on the import can be found by navigating to Settings, Reference Books, Taxation Rules

3. SHOPIFY

what we expected

  • A manual change of the VAT rate to 15% on 01 April 2018

what actually happened

  • The rate changed automatically as Shopify changed their default VAT rate for South Africa

systems changes that may still be required

  • If your Shopify sales are flowing into Xero with the wrong VAT rate applied or not flowing through to Xero at all, create a VAT rate called SH VAT Global, with the Tax Component – SH VAT GLOBAL @15% and assign it as the default rate for your Shopify Sales account
  • Refresh your Xero settings in Shopify and try the Shopify export

4. VEND

what we expected

  • A manual tax rate added – “VAT – 15%”, making this the default tax rate
  • Linking this tax rate to the correct Xero VAT rate in the integration settings

what actually happened

  • If product specific default tax rates were specified then these overrode the new rate which was added manually

systems changes that may still be required

  • If you were using product-specific rates you will need to export all of your products, update the default VAT rate and re-import them
  • If the new rate isn’t pulling through to your iPad then you will need to delete the VEND app and re-install it

5. RECEIPT BANK

what we expected

  • Selecting “Allow Xero to decide” would ensure that the Xero defaults were applied

what actually happened

  • Xero defaults were only changed later so new rates were not applied

systems changes that may still be required

  • After making the relevant changes in Xero, follow the steps below;
    • Ensure that the Tax Settings in the integrations setup are as follows;
      • Publishing tax data – Allow Receipt Bank to decide
      • Use tax list – On
      • Use supplier tax rates – Off
    • Ensure that before publishing a receipt the receipt details are as follows;
      • Tax – Extracted amount (always double check this against the actual amount on the receipt, if the tax amount is incorrect, enter it manually or select the 15% rate)
      • Ensure that the total amount matches the receipt
  • Helpful tip
    • To double check that Xero is setup correctly – Have a look at the tax default for the account that you would like to allocate the receipt to

If you are still struggling with any of the above please book a session with the systems team.
And feel free to send over any questions you may have regarding this month’s newsletter.

Jason Proctor (Creative CFO – Systems Team)

Related Insights.

Birkenstock’s Billions: Getting Comfortable with Business Valuations

Read More

Understanding and achieving a healthy cash flow [Part 4/4]

Read More

An explanation of the balance sheet for business owners [Part 3/4]

Read More

Financing your Company’s Growth – Ask us how to take your business to the next level

Read More

The Melting Ice Cube Series – Part 2: A Brief History of Money

Read More

A business owner’s guide to understanding and working with the profit and loss statement [Part 2/4]

Read More

Financial Modelling for Business Lift Off

Read More

COVID 19: Working from home tax deduction

Read More

December was an exciting month in the space of integrations, and the new VEND-YOCO  integration is making waves.

There is now a high-level integration between VEND POS and the YOCO payment service.

Previously, when checking out on VEND, one had to tap the “Credit Card” payment type on iPad and manually enter the payment amount into the merchant payment device (card machine). This process used to take a fair amount of time and allowed room for error as cashiers could enter an amount not matching the sale amount.

VEND and YOCO, well mostly YOCO, have worked hard to make this process “SEAMLESS”

The new integration ensures:

  • The YOCO device pre-populates the sale amount matching VEND (no human entry required)
  • The cashier does not need to touch the customer’s credit card as no data entry on the YOCO device is required by the cashier
  • It is now *almost impossible to have a discrepancy, during the cash-up, between the total card payments displayed on VEND and YOCO in your end of day reconciliation

With YOCO doing so well in South Africa at the moment (and stealing market share from the big dogs like Nedbank), other payment providers are trying to get in on the action (or reclaim the market). See below!

This integration can be a huge value-add to clients and is quick to set up. If you have any client’s using VEND and a YOCO device please forward them this link containing the set-up guide:

https://support.vendhq.com/hc/en-us/articles/115005545668

Feel free to send over any questions you may have regarding this month’s newsletter.

Jason Proctor (Creative CFO – Systems Team)

Related Insights.

Tax and Debt Management

Read More

Creative CFO Launches New Investment Vehicle to Back High-Growth Small and Medium-Sized Business in South Africa

Read More

Financial Systems Case Study: The Tile House

Read More

Manufacturing in Xero Part 1

Read More

Systems Newsletter – Fixed Assets In Xero, DEAR Features And New Systems

Read More

An explanation of the balance sheet for business owners [Part 3/4]

Read More

How to Fund your Business and Unlock Growth

Read More

Manufacturing in Xero Part 2

Read More