I would not trust some automated system provided by a bank (of all people) to get all the finer detail right. So the accounting costs for small business will never approach zero – and that’s ok like that.

Even the guys at FAC say that in most cases you should still have an accountant alongside their product. Dare I say, using FAC has made my bookkeeping almost pleasant, and I typically pay my accountant £350/year or so for the other stuff.

Rachel, I know I’m lumping bookkeeping up with accountancy here but for some businesses the former is really mostly what they need. You’re right, I would still have an accountant exactly for the reasons you state, but it’s mostly the manual reconciliation and bookkeeping that’s making my life hell. And manually exporting things from one system only to have my accountant print it out and then enter it into another system (or whatever it is they do) is just mad.

I’ve been meaning to look into both FreeAgent and Xero. I think I may finally do it (thanks, Rachel, Mel). Might be worth looking into this Nixon Williams thing too, Paul, but after a cursory glance it looks like it’s only for freelancers/contractors not limited companies.

Thanks again for sharing your thoughts and for your helpful suggestions.

Pete, I’ll keep hoping for the RBS wonder app, then! :)

Sometimes these internet banking “applications” (in the loosest sense) seem archaic. Is there any good reason you can only view your account transactions going back just 1 month using HSBC Business banking? Gives a very small window for debugging any errors when reconciling without sifting through stacks of paper. Yeah you can export that “recent transaction list” to Excel which might be compatible with Quickbooks etc but it’s excruciatingly basic. You have to become an expert in accounting and taxation just to keep books with these disparate systems! (Or yeah the resulting complexity of tying these things together sustains a whole industry for people as pointed out by Pete, like the sound of RBS bankline btw, out of my league though).

Just read your post, we started using FreeAgentCentral (www.freeagentcentral.com) back in October and I think it does most of the things you are talking about in your post. FAC allows you to upload your bank statement and then easily reconcile, it also gives you a running total of corp tax and VAT (and it deals with the flat rate scheme). As it is an online service I can give our accountant a login so she can keep an eye on what is going on. Best of all they use getsatisfaction.com for customer service so if you have any questions you get a quick response.

For a ltd company it costs £25 per month.

I can actually say that I almost enjoy doing the books now (and no I don’t get commission but I am quite evangelical about FAC at the moment).

Hope that helps,

Mel

Back to bookkeeping. We use Xero.com having switched to it from QuickBooks. It cut the time I spend on bookkeeping massively as it handles exports of data from the bank and I use it for invoicing, tracking payments outstanding and so on. Not all of our financial information is with the bank – for example we take payment for courses via PayPal which I treat as a ‘Bank Account’ for bookkeeping purposes, sometimes we use cash for taxis and so on, or pay for business expenses out of personal accounts and need to file an expense claim, this needs tracking. I find that this takes very little time as long as I do it straight away and don’t let the bills pile up!

I’m not sure I’d want my bookkeeping bundled with my bank account, I choose a bank on them being a good bank, and software based on it being good software. The potential for the best bank for my needs not having the best software is fairly high, so I would rather these things were decoupled. What would be most useful would be having better data export from banks into applications like Xero, Sage and Quickbooks – the ability for that data to be fed directly into those applications for example.

I use and can highly recommend the fixed-fee (£60+VAT per month) service from Nixon Williams. It’s not the fully automated system you envisage but it’s fairly painless and good value.

Cheers,

Paul.

RBS are apparently they are working on the Make-The-User-A-Cup-of-Coffee version at the moment ;-)

Problem is, this would put ‘000 of accountants out of a job, unable to pay their mortgage and therefore homeless and as such a drain on the state system. This country is run by BAD accountants who will look after their own.

Guarantee that bloke sitting next to you on the bus smiling like a cheshire cat has NOT just won £50,000 on a lotto scratch card, he’s just snowed under with work from clients and customers who need his accounting skills @ times like this.