What accounting package should you be using? Banklink vs Xero

[Rosco]

Accounting is continuously changing and it’s a great time to review your accounting package before 31/03/14.


Banklink
A lot of property investors still use Banklink as it is extremely simple and easy.

• OK for cash based business (motels for example) and rental properties

• Can complete payments basis GST returns

• Doesn’t provide invoicing, debtors, creditors, so doesn’t work perfectly for non cash businesses

• $10 + GST per month approximately to get the bank transactions from Banklink

• Simple cash reporting, graphs and can compare well to budgets

• Accounting firms can provide Banklink training and training notes

• 
  Disadvantage: Banklink hasn’t changed in the last 10 years and it is not a cloud based product. Accountants need to manually email you the months file, then you have to email it back when finished.
  
  
  XERO
  
  Xero is a cloud based accounting system that started around seven years ago, so it is no longer the ‘new kid on the block’.
  For non cash businesses, it is a full accounting system that can do your invoicing, debtor management, creditor management and full accrual profit and loss. As a business owner it is essential that you know and understand your monthly profit.
  
  
• Most reasonable sized businesses will have to go on to the Standard plan, which is $50 + GST per month.
• Under the More options on www.xero.co.nz, there are weekly free training webinars and also email support.
• Xero has a number of add-ons that can provide further services or information for your business such as job management program and payroll.
• If you cease your business, Xero keeps your information for 7 years, and they can restore this if necessary. Note: there is a cost involved.
• Slightly easier to set up new bank accounts and can put on more credit card options than Banklink.
• By using either Xero GST cashbook or Xero Cashbook, you have access to the file storage facility in Xero and to the Add-ons.

Other Options with Xero
Xero partners (most accountants), can offer you some extra packages not readily available to the public:

• GST cashbook for $19 per month + GST
• Quite similar to using Banklink for a cash business, but cloud based with more up to date transactions.
• NO invoicing, debtors or creditors.
• But can still process cash transactions and complete GST returns.
• Easy to upgrade to Standard package at a later date.

• Cashbook for $10 per month + GST

• Ideal for rental property clients. Quite similar to Banklink for rental properties but cloud based with more up to date transactions.
• NO invoicing, debtors or creditors.
• Can process cash transactions and give reporting on each rental.
• Can link to Pocket Rocket Add-on to gain access to property management software. Pocket Rocket is free for one property.

Recommendations

1. If you have a non cash business where you invoice customers, then you need more than Banklink. You need a full accounting system such as Xero. There are a number of other options such as Saasu, MYOB live, Quickbooks, etc.

2. If you are a cash based business (make a sale and receive the proceeds straight away), then either Banklink or Xero GST cashbook would be fine. The decision comes down to whether you prefer the slightly cheaper Banklink, or the convenience of online through Xero.

3. If you own rental properties, for one or two properties, you can still use cashbooks or just narrated bank statements. As you get more rentals it becomes easier to use an accounting package. Either Banklink or Xero Cashbook would be fine, and it depends if you prefer the online program. I find Banklink to be a little simpler.


Timing and changeover
If you were thinking of changing accounting package, now is the perfect time so that it is all set up and running before 31/03/14.

Ross

[Anthonyacat]

Awesome and informative post thanks Ross. I just had the one thing to add/discuss

Disadvantage: Banklink hasn’t changed in the last 10 years and it is not a cloud based product. Accountants need to manually email you the months file, then you have to email it back when finished

Banklink is changing, albeit slowly and quietly. They do have a cloud solution (Banklink Online) that most people don't use because it isn't quite as good as Xero and they don't know it exists.

As you'll likely know, MYOB purchased Banklink not too long ago, I can see them trying desperately to change it in order to fend off the growth of Xero.

[Rosco]

Unfortunatley Banklink Online is a joke, and still not an online accounting package. It works by the accountant sending the banklink file to Banklink Online, then the client downloading the file from Banklink Online. Both parties still can't use the program online, and really they are just sending it back and forward but through a website instead of by email.

Ross

[Anthonyacat]

Maybe I said the wrong thing? Banklink Notes Online, or something. I know there is one, where the client doesn't need to install the Banklink software, the accountant presses a button that let's the client know there are uncoded transactions, then they go to a website and we can pull the coding back into our live file.

It's certainly no Xero, but it's improvements to old functionality, and worth keeping an eye on.

[Rosco]

Banklink Notes has no reporting(ie no profit and loss), and is just a way for the Accountant to ask queries to the client. Not really an accounting system!

Ross

[Anthonyacat]

I'll look into what I'm talking about when I get back to work on Monday. But I suspect you may be right on the lack of client side reporting.

All in all, a great plug for Xero, which I can't argue, is beautiful software for small businesses.

[nick_pv]

Thumbs up for Xero. Good software, fairly intuitive and actively trying to grow their platform.

[Perry]

Still using Quicken as any invoicing that I do is manual.
But Quicken reports are not all that lucid for accts, as
I understand it. But I'm too lazy to change, being the
founding secretary of the stuffy old farts society.

[artemis]

I used Quicken Personal for years, upgraded from time to time. They stopped supporting it a couple of years ago. Software started to fail and they didn't want to know unless I paid an high amount per minute to talk to a support techie, but with no guarantee it could be fixed. Something like $6 per minute I think it was. Did some research and found that many others had the same issues. Planned obsolescence? I did mention to the poor call centre guy that it was not surprising they were losing market share to Xero.

[Rosco]

Hi All,

Obviously we are looking for software for property investors(being on Property Talk). So quicken, MYOB and many other programs are used for businesses where you need to invoice customers, keep track of debtors etc, but all of these are a bit of an over kill for property investment.

Even though Xero is getting better and better all the time, I still find Banklink better for property investors. It's just such a simple system, that just about can't go wrong. The only downside as mentioned in the original post is that it isn't online, and you do have to manually get the file (data) from your accountant or download from Banklink website (if you aren't using Banklink through an accountant). But, for most smaller property investors, you don't need daily data, and doing this once a month isn't a hassle really.

Only major downside I have with Banklink for investment properties, is that it doesn't seem to work on a Mac. So if you had a Mac, the Cashbook version of Xero would be better.

Ross

[Perry]

I still find Banklink better for property investors. It's just such a simple system, that just about can't go wrong. The only downside as mentioned in the original post is that it isn't online, and you do have to manually get the file (data) from your accountant or download from Banklink website (if you aren't using Banklink through an accountant). But, for most smaller property investors, you don't need daily data, and doing this once a month isn't a hassle really.

Are you still of the same view, Ross?

Also, is it not possible for the client to get the data direct from banklink and send it on to an accountant, once annotated?

[Rosco]

4 year later - banklink is still fine. If you are using banklink, no harm in staying on it for property investment.

But if you are just starting out, or looking to change. Then I would go with Xero. Two main reasons
1) Xero is being constantly improved and linked in with other applications. Whereas banklink has been purchased by MYOB and just doesn't seem to be updated or improved.
2) Xero can store the invoice or information against the transaction.

Ross

[murraythompson]

Hi Ross

Completely agree with your comments - Xero keeps adding features every month and if purchased through an accountant can be as little as $12 per month for the non-gst version. Banklink is fine, but that is all it will be...

Another option (that is free for non-gst businesses such as Rental Properties) I would suggest is Cashbook Complete put out by Acclaim. Great for smaller businesses / properties. However, it doesn't have automatic bank feeds, so you do need to import the bank statements into the program manually.

Food for thought!

Murray Thompson
Rental Coach
rentalcoach.co.nz

[Perry]

I would suggest is Cashbook Complete put out by Acclaim. Great for smaller businesses / properties.

Any direct, personal experience of that package, Murray?

They are offering a 90 day trial on their web site.

[murraythompson]

Hi Perry

Yes, I have had lots of experience with it. I know of a couple of accounting firms that suggest it for their clients. Don't expect the flashiness of Xero, but it does the job very well for running a cashbook through the year, GST returns etc. You just need to import the bank statements in a .QIF file format from your internet banking and make sure you don't miss any dates (ie - check the bank balance ties up). You can then generate the reports you need for the accountant at year end.

It is a low-cost option as the costs are a one-off only. For non-GST, it is free... The 3 month trial period is always there (they are not going to remove it anytime soon). I don't get any commission from them or anything - just a good low-cost alternative.

Murray Thompson
Rental Coach
rentalcoach.co.nz