The world of book keeping is changing. Which means it’s getting faster and cheaper to get your book keeping done properly.
Great news for us, because business owners are freeing up more time to focus on what the numbers are telling them, so they can grow stronger and more profitable businesses.
I have to tell you, I’d been a little slow to embrace the new technology. As a rule, anything that tries to dumb down what is actually a highly skilled job makes me nervous. And before I was going to start telling clients about it, I wanted it to have been around long enough for the wrinkles to get ironed out.
So earlier this year Sean went on the Receipt Bank training, and on the 1st April we ditched Sage, which I’d been using for 26 years (ouch, that makes me sound older than I am) and moved onto Xero and Receipt Bank.
Receipt Bank – a game changer
Receipt Bank is just awesome! I can think of no better way to describe it. It’s a cloud based system that automates the posting of purchase ledger invoices, cash and credit card receipts.
What does it do?
Purchase ledger automation – rather than having to key in your purchase ledger invoices, you just photograph or scan them into Receipt Bank, or you can drag and drop emailed invoices straight into it. It has very clever automatic character recognition software that pulls out the supplier name, invoice date and number, and the net, vat and gross amount. And it either learns the nominal code from last time, or you set up rules so it knows what to code where.
And no need to spend time filing your invoices away, your records are all stored in the cloud for 7 years, so you can easily get your hands on anything you need.
Credit card receipts – the bain of my life and most people I know. It really bugs me having to empty my purse and scrabble around matching receipts to my credit card statement. With Receipt Bank you just photograph the receipts as you get them, then throw them away!
Expenses / petty cash receipts – just the same as credit card receipts. Photograph them on your phone and forget about them. You can scribble on the receipt what it was for to make your book keeper’s life easier.
How does it know what to do with your information?
Obviously there is some initial set up and it needs some rules setting. When you scan or import something you tell it what the transaction is, eg a purchase invoice, credit card receipt ( it learns pretty quickly) If it’s a credit card receipt it will recognise the last 4 digits of the credit card number and know where to post it – clever!
Where doesn’t it work so well?
If you have suppliers that don’t always get coded to the same nominal code you need to intervene and change the code before the data goes to your accounting system. For most businesses there are relatively few suppliers that this applies to but it could be a bit of a pain if you have a lot (although it’s still quicker than keying in your invoices.
It can’t know what narrative you want on your invoice, so you can either set up a rule, or intervene and put the narrative you want on before the data goes to your accounting system. We’ve worked with a few clients on this now and we’re finding that often the narrative we type in isn’t really needed. Where I think it is essential is for costs that are time based, and for fixed assets where you really want to know what the cost was. For many day to day costs, “tools” or “fuel” is perfectly acceptable, and you can set up rules for that.
I’ve come to accept that I may need to compromise on the full narratives I’d ideally like in order to take advantage of this fantastic technology. We have to consider what it costs us for someone to type in data that may not be necessary.
How does the data get into your accounts system?
If you’ve moved with the times and are using Xero or one of the other cloud based packages, then the interface is seamless. Once you approve the transactions, they will appear in Xero automatically.
If however you’re still on Sage, who let’s face it are woefully behind, then you can still get the data in, but it needs to go via a csv upload. Because this is a bit fiddly to set up, Sean has developed a nifty interface to make this work easily for our clients.
It does interface with SageOne, but this really is only for very small businesses as it’s pretty basic.
So does this mean anyone can do book keeping?
Well book keeping is still a skilled profession, and just because you’re importing your data, you still need someone who knows what they’re doing to make sure things are in the right place and reconcile. Xero does a lot of the reconciliation work for you as it downloads all your bank and credit card statements automatically. We still see people get in a pickle where they’ve assumed Xero does everything for you – if you don’t know how to book-keep then you will still need some help say once a month to make sure everything is balanced and correct.
You may remember Andrew and Kate’s story from a few weeks ago where their accountant almost destroyed their business. Well he believed that if he was using Xero he didn’t need any knowledge at all and his business model was to use students who knew nothing about accounts to do his clients’ accounts. That’s pretty dangerous and as we know it caused a lot of damage.
And are the accountants liking it?
I’ve found there are 3 camps:
- The ones who absolutely love it and can’t wait to help their clients cut their book keeping admin and costs, and make their lives easier.
- Those who are threatened because they’re going to lose book keeping revenue.
- The ones who just don’t “get all this cloud stuff”, want to keep doing things just the way they are and don’t want to learn a new way to work.Be interesting to know where your accountant sits!
Be interesting to know where your accountant sits!
Take a look at Receipt Bank