CLOUD ACCOUNTING – Time to “Reviso” your approach.
With the explosion in take up of cloud accounting the issue has become, not “should we adopt cloud accounting” but “what system should we use”. The market place has been swamped with new systems and it is probably fair to say that the majority of newcomers to Cloud have gone for the market leader – Xero.
Xero is an excellent product – it does what it says on the tin! It is simple to use, looks pretty and does not require a detailed knowledge of accounting to use it. But it is most relevant for straight forward SME’s.
For larger, more complex businesses, other systems are more suitable. As readers will know, I am a great supporter of Reviso (formerly E-conomic) and as I stated in my earlier blog, accountancy practices should not restrict themselves to one system but use the best one for the job.
One of the (annoying?) methods that Xero and other cloud systems have adopted is making the accounting entries bank statement led. It is not possible (certainly not easy) to enter cash book details and then check them to the bank statement – manually or automatically to an imported statement.
As accountants will know there are many instances where this is more practical – the concept that if it isn’t on the bank statement, it hasn’t happened is not always the best approach and it limits flexibility when dealing with adjustments. It also means that if bank entries have not been downloaded, the only way of getting the entries into the system is to scan the bank statements and have them converted into a csv file that then has to be imported.
Reviso, however, works on the more conventional day book setup. Bank entries can be posted directly – or imported – to the day book and then reconciled – manually or automatically – to imported bank entries. This gives a more conventional approach to accounting which most accountants will recognise. I will explore this further in future blogs.
Another area where Xero has limited functionality is foreign currency. Now I appreciate that for many scenarios, Xero handles the foreign currency well, however there are some areas where it is limited.
I have a number of clients who, although UK registered companies or LLP’s, have a base currency of US Dollars or Euros. They report in their base currency but are VAT registered, so VAT returns have to, of course, be submitted in GBP.
Reviso handles this situation brilliantly, enabling reports to be presented in any currency and the base currency to be selected as required. Unlike Xero, the base currency does not dictate the legislation that governs the entity.
I appreciate that these are specialist issues but they can be handled by not relying on one application but having a stable of products to cover all eventualities.