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What accounting package should you be using? Banklink vs Xero
It does allow more than 1 bank account, so you could then filter on the reports for the particular bank account (entity) you want to report on. This would only work if each entity had 1 bank account.
Otherwise, you would just need to pay the one-off fee for each entity. This is what we normally see happen with the clients that have multiple entities. $170
If you need to send / email invoices and the full features, the cost is the higher $340.
Correction to my previous post - they are now charging a one-off fee of $85 for the non-GST version - Just looked at their updated pricing page (and offering a monthly pricing option as well).
Useful insights - thanks. I have two business entities, but also need a 'private' one.
I.e. Some credit card purchases made on a personal card are actually business expenses.
Each business entity has a transaction account, as well as an on-line saver which is usually only subject to back-and-forth transfers relating to the transaction account.
You shouldn't need to set up a "Private" entity at all.
You could do a couple of things:
- Setup 3 bank accounts - Main for transaction account, Savings Account, then add in a Credit Card account. Then, you could import all your credit card transactions, put the business transactions to their various accounts and the rest to drawings.
- Setup 3 bank accounts - Main, Savings, and Credit Card. However, in this setup, you only enter the business related transactions on a regular basis (say every GST return). The total spent is then in the amount paid column. This is then balanced with an amount received to the "Funds Introduced" account to balance the account to Nil, but it records that you have paid for those expenses yourself. This setup is an easy way to record the occasional expenses that you pay.
So Cashbook Complete could easily handle this setup.
You can always give it a go yourself in the 3 month trial. If you do find it too complicated, then I would still highly recommend Xero which has automated bank feeds (and has 1 month free). If you don't need to do invoicing of clients, then Xero can be purchased through an accountant for $22+GST a month (It is called GST cashbook). A lot of clients use this option. Otherwise, the full version of Xero costs $55 a month.
Not many people or accountants use it any more. So a lot harder to get help!
Also if it doesn't do automatic bank feeds as you have put above, then it takes longer. The whole idea with xero or even banklink is to save time. They automatically have the bank transactions, they memorise the majority of the transactions long term and save the user a lot of time and effort.
I would also look at things like;
- can it easily provide a separate profit and loss for each rental?
- can it save invoices in the system?
- can it easily be transferred into accountants systems? As I have put above, Xero is very common, so at a push of a button most accountant's systems can import all the transactions. Cashbook complete is not common, so probably would require reentry.
Ross
Book a free chat here
Ross Barnett - Property Accountant
It is indeed interesting to see the pros and cons based on the experience of others. I appreciate the insights that Murray and Ross et al have offered.
My perception is that many of these packages are akin to using a sledgehammer to crack a nut.
- can it easily provide a separate profit and loss for each rental?
What if that was not required? Given the likelihood of the portfolio option for ring fencing, it would seem less of a necessary add-on.
- can it save invoices in the system?
Incoming or issued? And why - for either?
- can it easily be transferred into accountants systems?
Why is or should that be necessary?
Especially if (whatever) package can do a P & L and a trial balance.
As to how old a package is, why should that matter if its functionality is good and it works well?
1) separate Profit and loss. Nothing to do with ring fencing. You should know how each property is performing. What one's are making profit, which one's are losing money. What are the repairs on each property compared to the others. Separate Profit and Loss reports for each rental give great information to make decisions!
2) save invoices in the system. For rentals this is from suppliers. So rather than having a shoebox of invoices for rates, insurance, repairs etc, they can all be saved in xero against the cost. So when you review your repairs, you can click down to get more detail and ultimately the invoice itself. Very handy if queried by accountant or IRD, or when you are looking back to warranty issues.
3) if you use an accountant they transfer the information into their system. something like xero is quicker, as all accountant systems will integrate, so can push button and get info into accountants system. From older systems can use a trail balance, but takes more time so ultimately costs you more.
4) older programs - things do change over 10 plus years
- might want to ink into your property management program. so that info only entered once, but completes your financial information too.
- might want to outsource your data entry - ie email invoices to some providers, and they enter into xero for you.
- older programs are often not as well backed up or supported if something goes wrong.
so in general older packages don't offer all the options newer ones do. A really simple one is bank statement downloads. Older programs might only take 2 mins each time, but that is still 2 mins wasted each time compared to a newer package. Plus it creates an opportunity for errors. ie dates missed, and I have even seen information entered negative.
Ross
Book a free chat here
Ross Barnett - Property Accountant
I do use Xero most days with client work - it is great and I think it is light years ahead of where MYOB banklink and other comparable products are at. It does make accounting easy.
However, the needs of the client need to be taken into account. For some capable people with a very small operation, an excel spreadsheet or Cashbook Complete could be appropriate as an electronic form of a cashbook. I wouldn't recommend it for large businesses with many transactions of course, but again, think of what the client needs and not what the platform can do - I know Xero can do nearly everything!
Just back on Cashbook Complete - it does have the ability to run rules (such as automatic coding from descriptions from the bank statement). However, with all non-cloud based accounting products, the data is saved locally. So, unlike Xero, you do need to do backups.
Then with Xero, it is subscription based. So, while you pay your monthly fee everything is accessible (financial data and all your uploaded invoices etc). If you stop paying, then you can't access any of the data. Compare that to a one-off cost and having it for life.
Again, costs vs benefits and what suits!
So, give the trial periods of all the products a go and see which one meets your needs.
Correct - Xero is solely cloud based and can be used with any web browser (no installation required). If you stop the subscription, then you do need to download what you can out of Xero before access is closed off.
Good to know you have backups already in place. I have a similar setup, but with an additional backup to the cloud (in case the building burns down)!
Been a while since I have used Cash Manager - looks like they now have an online version (with similar pricing to Xero for that package).
Being a little fish I just use excel and the accountant is more than happy with that. Means they don't have to hunt for anything.
That gets emailed at the end of the year and paperwork gets dropped off.
Few minutes each week and it's done. And it's free :-)
But if things expanded to the likes of some of you on here, I could completely understand the desire for another system. I just like to tinker, and have it exactly how I like.
Once upon a time, I used a simple spreadsheet, too. I could consider going back to that, I suppose.
The Acclaim / Cashbook folks have replied to my inquiry.
Based on what you've described, Cashbook should be a good fit. However, the best way to know is to simply give the 90 day free trial a go.
With Cashbook, we refer to a set of books for a particular business/entity as being a "Cashbook file" (or "data file"). In this case, you would need to set up two separate Cashbook files for both of your entities. Each can then have any number of bank accounts.
Because our registration works on a per-Cashbook file basis, those two files would need to be registered/purchased separately. After getting your first for the standard price, any subsequent ones are just half-price.
One of the problems of trial periods for such things is the amount of time and energy required to set it up and enter data, to get a feel for how it all works. Then, if it doesn't work as hoped for, that was a waste of resources. But I can't see how that risk can be avoided.
With transfers - yes - you have an out and an in amount that both get coded to the same category name (transfers normally). They usually cancel each other out (if they don't, you have done something wrong!).
I would set up some bank rules to help as well - you can get it to set them up on a bank statement transaction. Use * wildcards and choose the "Retain Reference" option.
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