This is a topic that is very close to my heart and I am sharing this everywhere I go. A couple of years into my career as a chartered accountant I started to wonder if I was still enjoying working in the finance industry. I was busy with so many routine, tedious tasks that it felt like I was not growing and it did not feel like I was making a difference in other people’s lives. I was so consumed with day-to-day accounting tasks that I did not have time to monitor the financial health of businesses I was taking care of, or to provide valuable feedback to business owners.

All of this made me question my career choice. In other industries I could see innovation and people who were fulfilled by their work, and I remember thinking that there must be a way to make accounting enjoyable and fulfilling.

CLOUD ACCOUNTING DISRUPTS THE FINANCE INDUSTRY

Cloud accounting is a term that did not exist in my vocabulary a couple of years ago, but it completely changed my life and my thinking. Learning this term saw the beginning of an incredible journey for me where I went back to enjoying finance work again.

I stumbled upon cloud accounting while reading the Entrepreneur magazine and saw an advert for Xero accounting software . The tag line was “Real-time accounting”. It caught my eye immediately; I have never seen “real-time” and “accounting” in the same sentence. At the time, I had been working in the finance industry for over ten years. What I had experienced was that we as accountants were usually playing catch-up. In general, we were processing financial and business information that had happened a few months or even a few years ago. The idea of “real-time accounting” seemed unreal to me!

I knew that cloud accounting would cause disruption in the accounting and finance industry, probably in the same way that Uber disrupted the public transport sector and Airbnb disrupted the hospitality industry.

WHY CLOUD ACCOUNTING IS SO ENJOYABLE

After reading the Xero advert in the Entrepreneur magazine, I decided to propose this new technology at the company where I was working at the time. We switched from a desktop accounting software to Xero. The switch was easier than I thought. Suddenly I had access to a variety of amazing features that I never knew existed. A whole new exciting accounting world opened up for me. I could write an entire book about how this change improved my life but to give you a glimpse of what these features mean, I will only share a few of them. Just a disclaimer: I am going to talk about automation – a lot.

▪︎ WAY BETTER ACCOUNTING WORKFLOW

Firstly, let’s talk about aesthetics. Xero has been designed specifically for the web so work screens are straightforward and user-friendly. The platform is also great to look at and easy on the eye. This may not seem to be that important, but when you spend hours staring at a screen you want to be interacting with the best-looking platform possible.

Not only is the design well thought out, but the logical flow of transactions happens much more efficiently than I have ever seen before. There is no more batch capturing, but rather a transaction flow. The cloud accounting software links directly with your bank. It feeds transactions automatically to the software, matching automatically with source transactions, for example, matching the supplier transaction with supplier payment. All you have to do is click OK.

▪︎  GOING PAPERLESS

Xero’s platform allows for every transaction to have a source document digitally attached to the transaction. There is drill-down functionality available from the general ledger, and you can click right through to the supplier invoice. It makes any query and audit way easier than before. No more looking for source documents in files and no more worries that files or paperwork might get lost. All of this is then saved securely on the cloud.

Since the application is web-based and all the information is on the cloud, it enables me to access this from anywhere I have an internet connection.

 

It means that I have the freedom to work from anywhere and check up using my mobile phone. How incredible is this! I am not bound to a desk anymore. 

 

▪︎ AUTOMATION IS THE NAME OF THE GAME

I have mentioned the automatic bank feeds already, but this is only the beginning of automation in Xero. There is an automatic link to XE.com , so multi-currency transactions are converted automatically to your reporting currency. When you pay the foreign supplier or receive money from a foreign client, Xero calculates the foreign exchange profit and loss and posts the journals automatically.

Fixed assets are a breeze. The fixed asset register is integrated into the software and at month-end or year-end, you only have to click one button and depreciation gets calculated automatically, and journals are posted (yes, you guessed it) automatically! The level of automation is unheard of in other accounting applications.

 

In summary, the automation functions in Xero save me a significant amount of time. This is time that I can spend on things that matter and that actually bring about positive change.

 

OLD DESKTOP SOFTWARE FRUSTRATIONS

When I think back to the days when I was using old desktop accounting software, I remember how miserable and frustrated I felt. Compared to what I know now the software design was terrible. It took me hours to capture transactions manually, and there was so much room for human error. Things like typing errors, miscalculation mistakes, and misallocation errors could easily slip through the net.

In addition to the potential for errors, you could only work from a computer where that file was located. You had to have a very reliable backup procedure in place and make sure the file did not corrupt. Every year you had to ensure that you received the updates from the software company and then install the latest version on your computer. Just talking about all these frustrations makes me feel exhausted. No wonder I was so miserable and unhappy in the finance industry.

With all the software housekeeping, back-and-forth using non-automated software and ensuring that I had not made a mistake I never felt like I was adding real value to businesses. I never had time for the exciting things, like forecasting and presenting valuable business insights to business owners and helping them to grow their business.

NOW I HAVE TIME TO DO WHAT ACTUALLY MATTERS

Since the routine tasks are taken care of with cloud accounting and I know that the financial integrity is of a high standard, I can now focus on monitoring the financial health of businesses I look after and providing regular and valuable feedback to business owners.

 

I am now able to improve financial reporting and be innovative with bringing the business numbers to life so business owners can make better decisions.

 

I am not stuck in the past anymore, and I am certainly not playing catch up all the time. Instead, I can look ahead in business and focus on cash flow forecasts and company targets and help business owners prepare for what is coming.

I AM A HAPPY ACCOUNTANT AGAIN

Cloud accounting made me enjoy the finance industry again. It enables me to contribute in a meaningful way to businesses by utilising my financial expertise on a level that matters.

The routine tasks are necessary, but with this great new technology available you do not have to waste time by doing it yourself anymore. I am also a happy accountant because I help other accountants and businesses switch toXeroand make them aware of this brilliant technology. I love to see how people’s lives are improved and how stress levels decrease because the automation of cloud accounting brings freedom and joy.

Now that you are totally convinced to switch over, click here to get started.

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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)

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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)

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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)

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