October 2015 software release

We've just released a new version of Checkmybooks. This one has no major new features but has improved performance and fixed some issues, as follows:

  • Various performance fixes in Job Overview page and running checks for Review Points
  • A new "pre-flight check" page allows you to review the integrity of client data before proceeding with the job
  • Authentication to Xero is a smoother process
  • Improvements to Xero data import of bank items
  • The Job name is now a link back to the Review Points page
  • System messages no longer fade away and now persist until you cancel them
  • Improved reliability where sometimes a job would lose some of the Review Point status changes
  • Added a warning message about outstanding Review Points when exporting a Trial Balance
  • Fixed issue exporting data from Aged Receivables and Aged Payables schedules
  • Simplified the Add Client routine and terminology for last year-end

Some more exciting stuff is in progress, so watch out for these coming to Checkmybooks very soon.

Embrace your square-peg clients

OK, so you love new cloud accounting services - like KashFlow and Xero - and are working towards getting all of your clients to move online. Maybe you are already a "Cloud-only" practice. My question to you is: will you really turn your back on clients who still want to use Sage or QuickBooks?

If those clients are a PITA, or not the forward-thinking people you want to work with going forward, then you don't have a problem. Where you do have a problem though is when the client is actually a great guy or gal and pays a very profitable fee. What if that dream new client comes along but insists on using desktop software? 

These business owners may have many valid reasons why cloud software is not a good fit for them. Perhaps they need to interface with other line of business desktop products. Perhaps they need functionality that cloud services cannot currently provide. Either way, trying to force a Sage square peg into a Cloud round hole is never going to work.

You shouldn't care what accounting software your client uses

Checkmybooks allows you to work with Sage and QuickBooks clients just as easily as you can work with your cloud ones. So you can let them use the software that works best for them whilst still working with their accounting data in the cloud.

You can work the same way on every job, because they all look and work the same in Checkmybooks, regardless of the software the data came from. Your team will thank you too, as they don't have to learn how to use lots of accounting software - only Checkmybooks.

Your accountancy practice is a business. It does not make business sense to turn your back on good, profitable customers because they won't change their systems to suit you. You therefore need to embrace your "square peg" clients and prospects, and Checkmybooks makes this easy.

Adding value when finishing-up

For busy accountants, under time and fee pressure, the temptation is always to put the current job to bed as quickly as possible and, once the final accounts have been agreed, it is easy to then just move on. However, it actually makes sense to start thinking about next year’s work now.

Two big factors determining how much work will need to be done for next year’s accounts are the quality of the records that will be provided by the client and whether the adjustments made this year are posted-back into the client’s accounts. You can control both of these factors by taking time to finish the job off properly now.

Feedback to the client

If you’ve spent a lot of time finding and correcting bookkeeping errors made by the client it’s important to try make sure that you don’t have to address the same issues again next year. Unless you tell the client what was wrong and educate them on what you need, it’s almost certain that the records you receive next time will show no improvement.

So, when completing the job, you should take time to provide your client with detailed feedback that they can act upon as soon as possible. Traditionally, this has been difficult and time-consuming but software now exists to automate this.

Your feedback to the client should be focused on making sure they understand and do not repeat the mistakes made this year and should cover:

  • All of the accounts areas that you found issues in
  • A list of every individual issue you found
  • A summary of the effect of your adjustments on the accounts
  • A list of every individual adjustment you made

Armed with this information, most clients will easily grasp the scope, scale and complexity of the review and correction work that you had to perform. If you set aside some time to talk your report through with the client, you can demonstrate your commitment to helping them and also go a long way towards making sure you get better records to work with next time.

You could record your work and adjustments in an Excel workbook, and then copy and paste details into a report to your client, but far better to use software that can automatically produce a Word document that you can send as is, or further customise easily.

Posting-back your adjustments

Clients are notoriously bad at processing the year-end adjustments provided to them by their accountants. Having said that, not all accountants take the time to actually provide the adjustments. When the job comes in next year, the opening balances position will be wrong and will need to be corrected before work can start on the current year. The key here is to use software to make this process easy and quick, for both you and the client – then it will get done.

Sending a list

You could provide the client with a document, listing the adjustments that you want them to enter into their software. This is easy for you to do (usually a simple copy and paste from your Excel working papers) but hard, and error-prone, for the client to process.

Updating electronically

It is preferable to use technology to make the sending and processing of adjustments back into the client’s accounting software quick, easy and error-free.

For desktop software, you should provide the client with an import file in the correct format for their software. Use a CSV format for Sage clients and IIF format for QuickBooks clients.

  • Importing to Sage https://my.sage.co.uk/public/help/askarticle.aspx?articleid=24220
  • Importing to QuickBooks http://www.my-quickbooks-expert.com/import-quickbooks.html 

Remember that a list of journals may have worked for you, from an accounts production point of view, but is unlikely to work completely when posting-back into the client’s software. For example, journal entries into control accounts (Debtors Control for instance) may be prohibited by the software or, if allowed, may cause errors and inconsistencies. You should therefore take care to convert your journals into equivalent transactions (say a Sales Invoice or Credit Note) before sending the file to the client for updating.

For clients using cloud accounting software, your aim is to send the adjustments directly into their software from your software via the cloud software’s API. The same care needs to be taken as regards transactions being sent in place of journals to control accounts.

Added value and win-win

By taking the time and care to finish your year-end work properly you will be seen to add value by your client and they will feel looked after. The client will appreciate not having to wrestle with entering adjustments and will see real benefit in understanding what they can do to improve their record keeping.

Since the same work also means that you will be more efficient and profitable when working with next year’s accounts, this is a win-win situation.

How Checkmybooks can help

Checkmybooks is the quickest way to get from the client’s trial balance to yours. After automatically reviewing your clients records and reporting on matters needing your attention, the software lets you easily post adjustments then export the final numbers to your accounts production system.

You can also add value by sending the automatically produced report of all work done to your client, together with a correctly formatted data file which makes posting back your adjustments into their software a simple task for them.

Working with cloud accounts "offline"

Cloud accounting allows small business owners and their accountants to work much more closely throughout the financial year – because they can both work with the same, up to date numbers at the same time.

Working with client data “online” is the future of the profession. In this new model, you speak with your clients regularly, to resolve queries and make corrections to the accounting records in small batches, as the financial year progresses.

What about clients who only want a year-end service?

However, despite the seemingly obvious advantages for both sides, we know that that every established accounting practice will have a significant number of clients who do not want to work in the new "regular touch" model. These business owners prefer to deal with their accountant just once a year - at year-end time.

In this scenario queries are resolved and corrections are made looking through the whole year’s transactions in one go. Should you, the accountant, be happy to work with the data online now? Do you really want to make (potentially) hundreds of corrections, deletions and re-allocations directly in the client's own accounting records before you confirm the final accounts with your client? You won't have a full audit trail of what you've done and will have no way of restoring back the original data should you make mistakes or the client doesn't agree.

At Checkmybooks we believe this may not be the case. So we take a risk-free copy of the client's data, to work on “offline”.  Corrections can then be made; safe in the knowledge that the client’s records are ring-fenced.  Once the final numbers are agreed, then you can process the year-end adjustments (often in summary form) back into the cloud accounts. This way, the client sees their cloud accounts made consistent with the final year-end numbers - but only once everyone is happy with them.

Reviewing & correcting clients' data

The client has provided you with their information and it’s now your job to turn it into a set of accounts that you are willing to put your firm’s name to. The process is always the same – review, analyse and correct – but how you go about this work will determine whether this year-end job is profitable or not. Your processes will be governed by what you have to work with. 

Paper-based “books” and spreadsheets 

It is unusual for the client to provide a trial balance when they are using paper-based records or Excel, so you will have to compile this, and all required summaries and schedules, yourself. This obviously takes time and adds cost - but you can claw-back some of the efficiency lost, because you will be reviewing and analysing the client’s information as you work. 

For clients who insist on using Excel for their accounting records, it is better if they use a standard template that you have provided. The more consistent in shape the spreadsheets you receive from clients are, the more efficient you are going to be. 

Paper-based books and spreadsheets represent unstructured data. Computers are what drive efficiency savings and computers work best when presented with structured data. You should therefore be encouraging your clients to use bookkeeping software instead.  

Bookkeeping software 

Efficiency and productivity gains are almost exclusively obtained through the use of software and other technology. When your client uses bookkeeping software you have opportunities to work smarter that are simply not available when working with paper-based or spreadsheet records. 

Deciding whether to work with the software or the data

For clients using bookkeeping software to manage their accounting records you need to decide whether you are going to use their software, or just work directly with the underlying data. There are advantages and disadvantages with each option here and your choice should be made on a client by client basis: or perhaps more likely, a software by software basis. 

Why would I want to work directly with the data? 

If you can extract the client’s data to (typically) Excel Pivot Tables and then use these to review and analyse the accounting records, you can avoid the user interface of the software itself. The advantage here is that you can use software you are very familiar with (Excel) rather than the client’s own bookkeeping software: which you may not like, may not be familiar with or may not have a licensed copy of yourself. 

The disadvantage, of course, is that you have to create the reports and schedules you need yourself in Excel. By using the client’s bookkeeping software, you have available all of the reports that come with it. 

Desktop software and ODBC

Most desktop bookkeeping software allows access to the underlying transactional and lists tables using something called ODBC. If a client provides you with a desktop software backup file, it is most likely to be from Sage (50 or Instant) or QuickBooks. The good news is working with the Sage ODBC driver is easy. The bad news is QuickBooks does not come with its own driver and you are required to purchase a third party tool called “QODBC”. For details see http://www.qodbc.com/qodbc.htm.  

Cloud software and APIs 

ODBC drivers are desktop technology and the equivalent in the cloud world is called an API. Most of the cloud bookkeeping services have publicly accessible APIs which third party software can connect to and interact with. So, if you want to work directly with a client’s cloud data, you need to collect it using software which can retrieve it via the source’s API. 

Desktop or cloud – does it make a difference? 

Being designed more recently, cloud bookkeeping software usually supports drill-down into report numbers, the ability to use multiple windows (tabs) simultaneously and compatibility with any device. Older, desktop software tends to either not have these features available or makes them harder to access. Add to this the fact that cloud software is likely to allow your client to provide you with a free login (no software for you to buy or install) and it probably always makes more sense that you work with the client’s cloud software, unless you have a great, purpose-designed tool that can work with the data directly. 

Analysing the data 

Accountants use their training and experience to understand what steps to take, and what to look for, when analysing a client’s accounts at year-end time. Unfortunately, this means that different individuals in a firm might perform this stage of the work slightly differently. It is therefore desirable to have a method to ensure, as far as is practical, consistent methods, workflow and results across the whole practice.

Software is fantastic at searching, sorting, grouping, subtotaling, filtering and comparing data. It can do so at speed, with 100% consistency. When analysing the client’s accounting records you should therefore use software specifically designed for this purpose, for accountants in practice. 

The key to efficient and consistent results is to ensure that you have a systemized way to ensure that everyone in the firm considers the same set of review areas and, within those areas, looks for the same list of review points. 

A minimum list of review areas might look like this: 

  • Fixed Assets
  • Debtors
  • Bank and Cash
  • Creditors
  • Completeness Checks
  • Consistency Checks
  • Tax and VAT Checks 

Your analysis software should report on exceptions and potential anomalies in each review area: using the same query criteria to ensure that the same review points will be surfaced consistently across all clients and all year-ends. The only variables here should be client-specific parameters to allow customisation for specific clients, of different shapes and sizes. 

It is also important to have a consistent method of tracking the status of individual review points at any point in time during the review and analysis process. A standard set of statuses might be: 

  • Outstanding
  • Resolved
  • Accepted
  • Queried

Making corrections 

Improving efficiency in year-end work is all about getting from the client’s trial balance to your own trial balance as quickly and painlessly as possible. Processing adjustments and arriving at your final trial balance for use in accounts production and tax computations is your next step. 

Here you have two choices: you can correct the client’s data directly in the source software (by posting changes into their Sage file for instance) or you can maintain your own extended trial balance (typically in an Excel workbook) and enter adjustment journals there. 

Correcting the client’s data directly 

The advantage of correcting the client’s data file is that you can let the bookkeeping software automatically recalculate all of the new balances for you. As you post journals and adjusting transactions, the software will update the trial balance (and sales and purchase ledgers) as you go. This saves you from having to do this manually in Excel and is less prone to error. When you have all of the changes entered, you can then use the new trial balance in the source software to produce your final accounts. 

There are significant downsides to this approach though – not least the fact that some desktop software can be difficult to correct: Sage data is definitely harder to correct than QuickBooks data, for instance. It is harder to keep an acceptable audit trail when editing the client’s records directly and it is also harder to ensure that all members of your firm process corrections consistently. 

Creating Adjustments in Excel

Because of the limitations of correcting the client’s data directly, most accountants prefer to record adjustments in an Excel workbook, manually maintaining an extended trial balance to reflect the effect of the changes made. 

The challenges here are to ensure that the extended trial balance is accurate and up to date at all points in time, taking into account all adjustments made to date. It also takes time to maintain the integrity of all cross-references from the figures in the trial balance to the adjustments, analyses and schedules that underpin them. There is also a need to have a system to track which member of the firm made which adjustments and when. 

Here, again, the use of purpose-designed software can provide all of the advantages and exclude all of the limitations of using Excel workbooks for year-end accounts work. 

How Checkmybooks can help 

Checkmybooks collects, analyses and reports on your clients' accounting records. Corrections can be made quickly and easily, with your extended trial balance constantly updated as you go.

July 2015 software release

The Checkmybooks software elves have been working hard in recent months and yesterday we released the latest version to live. This is not as major an update as the April one but there are some great improvements, which include:

  • The introduction of our new Report to Client feature
  • Improved performance of Xero data imports
  • Faster updating of job stats and the trial balance following adjustments creation
  • Improved usability and performance when editing adjustments or existing transactions
  • Faster performance for creation and display of review points
  • Improvements to the import verification accuracy for Sage data

As ever, we made hundreds of other small changes and improvements all working towards making your experience using Checkmybooks as productive and enjoyable as possible.

Collecting & managing clients’ data

Year-end accounts work makes the largest contribution to the income of most accountancy practices. It is also the foundation from which additional services can be offered to clients – both complimentary compliance services and added-value advisory services.

Compliance services are under pressure though. Fees for year-end accounts work are mostly static, or falling and competition is getting tougher. Emerging technology is suggesting a future where clients are less dependent on their accountants for the completion of basic compliance tasks.

So it’s never been more important for accountants to secure their compliance work into the future. To do so, year-end accounts work must be managed ever more efficiently. Productivity gains are the price of staying in the game.

Not all accounting records are equal

Unless you do the client’s bookkeeping for them, you are going to need them to provide you with their accounting records at year-end time. The nature and condition of those client accounting records has the most significant impact on the productivity of your year-end accounts work.

Client records can take the following forms:

  • No records
  • Paper-based “books”
  • Spreadsheets
  • Desktop software
  • Cloud software

No records? Really?

Yes, you can efficiently handle clients who have kept no records at all – provided they are not cash-based businesses. The decline in the use of cash as a means of payment and the rise of service businesses and internet banking mean that, often, the client’s bank statements are the accounting records.

The key to handling this scenario is to get hold of the bank statement data in QIF, OFX or CSV format (standard internet banking file export types). Ask the client to provide such a file for the whole accounting period.

Now you need to use smart technology to read and help you post the transactional data. Most, if not all, bookkeeping software will allow you to import the bank data but we recommend Xero – and its Cash Coding feature for this purpose. For more information see https://help.xero.com/uk/BankAccounts_Details_FastCode.

Paper-based “books”

Efficiency and productivity gains are almost exclusively obtained through the use of software and other technology. Physical records present a barrier to the application of technology.

Physical records require physical collection or delivery and return. They require manual handling and storage in a real-world space. The presence of sensitive financial documents on-site represents a security risk. There is a danger that records can be mixed together inadvertently, lost or damaged.

Digital records are not subject to most of these limitations and, where they are, the risks are much more easily mitigated.

Our recommendation is that you have a “sunset” policy as far as physical records go: this means you speak to each client and tell them [a] that this year is the last year you will accept their records in paper-based form and [b] you will gladly (and without charge) help them move to a software alternative that suits them for the future.

Spreadsheets and desktop software

If “digital is good and physical is bad” in the world of accounting records, then it makes sense to focus productivity efforts on improving how you collect and manage digital accounting records.

Firstly, it does not make sense to receive digital records in a physical form. All of the limitations relating to paper-based records outlined earlier also apply to Floppy Disks, CD/DVDs, USB sticks and Portable Hard Drives. You don’t want to collect, store and manage real “things”, you are only interested in the data they contain.

We recommend that you only accept client accounting data by email, or a download link. For free tools see: http://www.pcadvisor.co.uk/how-to/storage/3509067/how-send-large-files-free-email-big-photos/.

Cloud software

The Holy Grail of efficiency and productivity as regards collecting and managing client accounting records – because there is no collection or management to be done. Armed with your login details for the client’s data you have all you need to get started with the year-end accounts work.

Just make sure you have a system in place to check that the client is ready for you to start work.

Client data files – organising for efficiency

Whether you are handling spreadsheets or desktop software backup files, you need to be organised to maximise efficiency. Use a lightweight database that stores key information about each client, and their accounting records, and can ideally automate sending an email to prompt the client to send you their data.

Setup your database so that nobody ever needs to ask these questions.

  • When is their year end?
  • Who do we contact?

  • What software do they use?

  • Do we have the same version?

  • What’s the username and password?

  • Who got the file?

  • Whose inbox do I need to look in?

  • Which PC is the file on?

  • Which folder did you put it in?

How Checkmybooks helps

Checkmybooks collects your client's Sage, QuickBooks or Xero data for you, analyses every transaction in the accounting period and then tells you exactly what you need to know. Automatically providing a list of Review Points, our unique software shows you exactly where you need to focus your attention.

From there you can easily and quickly drill down into the detail and make journal adjustments as needed. When you're happy with the revised numbers simply export the final trial balance into your accounts production system. When you finalise the job, Checkmybooks produces a report summarising all of the work you’ve done and a CSV file of adjustments for your client.

Since your clients will now be uploading their accounting data directly to your Checkmybooks account, you can stop collecting backup files, and remembering their passwords, and fiddling around with different versions of Sage and QuickBooks. You can probably even stop spending money every year on software upgrades just so you can handle different types of client files.

You can work the same way on every job, because they all look and work the same in Checkmybooks, regardless of the software the data came from. Your team will thank you too, as they don't have to work with lots of different accounting software anymore - only Checkmybooks, which is simple and easy to use. 

April 2015 software release

Being cloud software, we are able to update and improve Checkmybooks on a regular basis and yesterday we released our latest version. Many of the changes are the direct result of recent user feedback.

This was a big release which included changes to the presentation of the Review tab, the addition of 13 new checks and lots of general performance and reliability improvements. 

Main details

  • New UI for Review Points which now includes the value in each section header bar and shows a tick (checkmark) when all items in a collapsed section have been dealt with.
  • Improvements to the UI for Clients and Jobs, added guidance notes to top of all tabs
  • New check for potential fixed asset items in profit and loss accounts
  • New check for asset accounts with a credit balance
  • New check for liability accounts with a debit balance
  • New check for inconsistent VAT codes
  • New check for unusually large transactions
  • New check for inconsistent debit transactions
  • New check for inconsistent credit transactions
  • New check for control account being different to aged balances
  • New checks (2) for potentially tax disallowable items
  • New checks (2) for VAT potentially reclaimed in error
  • New check for VAT potentially not charged in error
  • Improvements to speed of updating Job stats
  • Manager now cc'd on system emails to Clients
  • Improvements to performance of Opening Balances tab
  • Help site launched
  • Links to detailed specs for Review Points added
  • Various bug fixes and performance improvements

As ever, your feedback on this new version is very welcome and keep those suggestions coming in please.