Microsoft Accounting - basic bookkeeping question

[Clive]

Hi,

I have downloaded the basic Microsoft Accounting Express. It's the freeby "taster" to the full program - but probably has all the functionality for my (my friend's) small business needs. I can see and understand the flows to create quotes, invoices and receive payments. I can also see the cash sales and bank reconciliation - which will probably cater for the business needs.

The problem I have is a lack of any bookkeeping knowledge. Microsoft Accounting offers/requires you to fill in what I believe are called nominal codes. Now, I have learned that these codes help one categorise expenses in a hierarchical manner - but I don't know even the basics about P&L or any such bookkeeping concepts. I'm thinking that I could put in codes just to make the software work and force a quote through to payment and not understand the implications of this in accounting terms. Our aim is to configure the software in the simplest way. We want to work out which invoices haven't been paid, what our cash flow will look like in the next month, the usual small business accounting needs really. I think I need the world's most basic accounting / bookkeeping book that makes no reference to any particular software but will guide me on which values to put in these fields when required by the software. Any suggestions on a good starting point for this knowledge? The documentation available with the software doesn't go into this at all - which I don't have a problem with as the software can't make assumptions on what are appropriate values for your data.

I'm asking the question here because I'm assuming there will be some small business people participating in this group who can understand where I am coming from - rather than an "accountancy" or "bookkeeping" group that will make assumptions about my knowledge or give me too detailed info for my needs.

Thanks for any (useful) suggestions,

Clive

[www.GymRatZ.co.uk]

Hi Clive. When I set up our business I didn't have the first clue anout anything other than claiming back petrol receipts and overtime at the end of each month.

I aquired a very cheap copy of Quickbooks Pro 6.0. No instruction book, just bumbeld my way through the intuitive icons and help screens.

That was in 1999 and carried on using the same version of quickbooks through until 2006 when the database had grown so big and messy I decided to bite the bullet and install the "new" Quckbooks 2004 I had purchased 2 years earlier but didn't have the balls to change over to!

Still running QB 2004 even though it's now a retired version. I'll keep using it until such time as a later version of QB has something very useful...

So, the point I'm trying to make is, I could still be running the business very well on a very outdated and long retired version of software reaching it's 10th aniversary !

Most companies have to upgrade after 3 years (I think that's the Intuit sunset period for their software) however you can pick up old "retired" versions of Quickbooks with manuals, install codes the lot for next to nothing. The manual I received with 2004 gives ample elementry "accounting" advice required to set up the software and run the sortware efficiently in accordance with any type of business.

The beauty of older versions is that they have been fully patched and upgraded so by the time they reach 3 years old they are bug-free!

Hope that helps in some way.

Cheers Pete

[Adrian]

"

" gurgled happily, sounding much like they were saying:

Intuit are little buggers for retiring versions. I had QB8, which they "retired", to the point where when I changed machines I couldn't re- install it as they'd turned the activation servers off. So I had to "upgrade" (at full retail price, of course) to the then-current, QB2005.

That's just reached end-of-life, and if the buggers ring me ONCE more, I promise I will go postal at 'em... The current version has two editions - £50 Basic, and £300 Pro. The Basic version doesn't even allow aging of invoices. And, of course, there's no upgrade pricing.

Sorry, QB, you can _shove_ it.

Sage Instant Accounts would be my choice. Or, if you're of an open-source bent, LedgerSMB is where I'm likely to be heading.

[Bruce]

Dare I suggest that you don't faff around with software but instead use a simple pre-printed accounting book? Not a text book, it's a book of pre-printed forms that you fill in daily, weekly or monthly. They have been around for decades. You can buy them in W H Smith or any good stationer.

You don't need any training because they include simple commonsense guidance as to what to record, and where. You then give them to your book-keeper or accountant (together with all your receipts, invoices, petty cash vouchers and cheque book stubs) who will find them an extremely good basis for completing your accounts in double quick time. They will have the job done in the time it takes just to sort out the queries that are typical with a software "solution".

There are versions for VAT registered and non-VAT registered businesses. Cost? A mere £10.99.

VAT registered:

registered:

[EricP]

Last time I looked at this it had a specimen company figures you could use and learn a lot from by playing with it. Does your version have this? They might have removed it from the *free* version.

This might help you with the problem as well.

[dennis]

I think you should try the software.. I downloaded, installed, bypassed activation, setup a dummy none vat registered company, a none stock item, raised and paid an invoice in about

15 minutes.

No I don't do accounting but it does come with help.

The express version is probably ok for a plumber or similar where its services that are being traded, its not going to manage stocks so its a bit limited for a business with actual stock to sell.

[Rod]

The number one rule for software 'solutions' - find out if you can export the data in a useful format.

If you enter data into Microsoft Account Express, Sage, Quickbooks or anything else - what are you going to do if you have to change to another package? What are you going to do if your accountants can't handle the format your package uses? (Don't imagine for one moment that they will install the one you use.)

Also, don't imagine that you will be able to stick with the taster version. There will be something that forces you up to the next version. Some annoying thing like not handling changes in VAT rates halfway through a year, not allowing cheques for more than £99.99, won't print, or whatever.

Intuit (Quickbooks) have managed to annoy swathes of their customers by abandoning versions/markets, not supporting seemingly obvious platforms, etc.

[Tony Bryer]

I've never tried doing it, but would be surprised if you could automatically transfer data from Sage/QB/MS to another package, but for the size of business under discussion manually entering an opening trial balance is not going to be very onerous.

Having a package who data can be handled by your accountant is a huge time and money saver IME. I give my accountant the core P&L and BS reports and a QB data disk and he can run whatever reports he wants against the data. Switching halved my accounting bill as compared to his predecessor who had everything as printouts.

As to setting up the account heads, I would suggest that the OP gets his accountant to set out what is required.

[somebody]

In message , Clive writes

Hi Clive,

It's way OT in here but I'll try....

If you were doing your books the old fashioned way (with a pen and paper) you would try to 'categorise' each sale/purchase etc.

Ie, rather than just seeing 'I sold this much' and 'spent that much' you would get something like, I spent 3 pounds on electrical gear and sold it for 6. I also spent 8 pounds on doojiflips and sold them for 3.

Even if all of your sales are for the same type of thing, you would want to keep an eye on where your costs went, so even though you had a total expenditure of 20 pounds, it might be useful to know that x went on heat and light (electric bills), y went on advertising etc etc.

That is the basic crux of nominal codes. A good accounting package will work out for you at the end of the year what tax you might pay. Difference between buying and selling is GP, but a fully deductible expense isn't cost of sales. Ie, any PAYE you pay out for example won't be taxed.

That is a very, very simple description but I do hope it helps.

On a separate note, I am actually a "Sage Developer". I pay them a lot of money every year to have access to every product they have ever released (and every bloody version of them). I can pick up the phone and talk to Sage's own programmers etc etc. My software (how I make a living) integrates heavily with Sage, hence why I (and my customers) expect it to all work together.

I'm a self employed computer programmer for a living and I have Sage CDs coming out of my ears... but guess what... I do my books with a pen and paper ... it's easier.

Hth Someone

[Bruce]

My point exactly. For a small business, software is a waste of time.

[Rod]

I do agree that Sage to QB (or whatever) as a specific export is unlikely. But, if taking on the overhead of changing packages, simple formats like spreadsheets can be sufficient. But it is something to know about before jumping into the pond.

Indeed, sounds like volumes wouldn't be too onerous. But the problem area can be historic data. Depending on company, it can be vital to have access to that and several years of data can mount up. Also surprising how many suppliers and customers can accumulate in some businesses. Of course, the other issue of re-keying is accuracy. :-)

[Dieseldes]

On the KISS principle, I am a self employed and made up a very simple excell spreadsheet, monthly income expenses car costs, fuel (less 20% private use) telephone, post etc, I don't carry stock, The spreadsheet totals everything up, and at the end of the year I just put the figures in the relevent boxes on my tax return and bung it off to the taxman. I couldn't justify the £200 + I would pay to an accountant, but I have a friend with a couple of shops who uses an accountant and reckons it saves on his tax bill.

Des

[stuart noble]

I'd meet you halfway on that. Enter the figures in a spreadsheet and juggle them around any way you want at a later date, which is what accounting packages try to stop you doing IME.

[stuart noble]

IME that £200 will go up in line with your turnover, even if the number of transactions stays the same

[tinnews]

That's a bit of an admission - it suggests that the computer programmer doesn't believe in his own product! :-)

I'm in a similar situation (Softare Engineer with own Ltd. company). Although I am *definitely* not a financial/commercial programmer (I work on low leve communications code in the main) I wrote my own accounting package using a database to hold the data.

Apart from anything else I was able to customise it to *exactly* my requirements to simplify data entry. Since it's sitting on top of a database if my accountant wants some specialised information it's quick and easy to extract what he wants.

[somebody]

:-) not at all! It would simply be overkill for me to use it. A bit like buying a 44ton lorry to go and get the milk from the corner shop.

BTW I don't write accounting software - my software integrates with third party accounting software - including Sage.

Kind Regards Someone

[Tony Bryer]

I think that very much depends on the business. If you are doing cash transactions only, perhaps, but if you are invoicing people and getting paid later, then the ability to be able to instantly see balances and knock out a statement are very useful.

For myself I guess we are a small business but until recently were sending out several hundred invoices a year to local councils. I would certainly not have wanted to do this without QuickBooks. And that's before you get to VAT accounting - painless if the computer does it.

More than a few accountants are reputedly sniffy about QB because you can go back and correct things later whilst the 'proper' way is to put in a journal entry. Mine takes the pragmatic view that if I wanted to fiddle things the transactions would probably not be in the accounts at all.

[tinnews]

Which is how my home-grown accounting system saves me time, I make the assumption that I'm not trying to fiddle the books!

[Owain]

That's fine *if* you're confident of the integrity of your spreadsheet. But accounting packages stop you fiddling this to, erm, stop you fiddling the accounts, and make you produce accounts that will satisfy HMRC.

Owain

[Dave Liquorice]

Thats how I keep track of things here but the real "books" are paper bas= ed with printouts from the spreadsheets.

Mine has evolved over the last 12 years but has been pretty stable for most of those years the last big chnage was the switch from cash accounting for VAT to the Fixed Rate Scheme.

A good accountant will save on your tax bill, there are lots of tax avoidance tricks that only those with the finger on the pulse of HMR&C g= et to know about and it's not just the end of year income tax that they can= advise on either. All the other taxes, capital gains & inheritance are ones that spring quickly to mind both of which really need forward planning unless you really want to give lots of money to HMR&C. Though that is falling more into the remit of a Financial Advisor than a tax accountant.