Nov 29, 2007

backup, backup, backup

MYOB TIPS and TRICKS
Compiled for our esteemed customers

BACKUP, BACKUP AND BACKUP

This month’s tips comes about because one of our customers had a power surge at their office and nearly lost all data stored on their PC

Why backing up is important for your MYOB data

Backing up your crucial file is the SINGLE most important thing you will do in MYOB.

PC’s get stolen/missing; PC’s get damaged in a fire; PC’s get damaged if there is a sudden power surge in your area. Nowadays, it is also common to re-format the PC because your PC has been hit by computer viruses. Even new PC’s are known to break down because of hardware failure.

What happens to the data that is stored on that PC? They are lost and are not recoverable. Whatever backups in that PC are gone as well !

How should you backup – frequency and strategy

Set a habit of making regular backups – every day, or once a week.

The interval of backup depends on the volume of data that goes into the file, and how much you are prepared to re-enter / reconstruct your data in case your original data is lost.

You must have a contingency plan to backup your data and store it at a DIFFERENT location away from the computer. Store the backup well away from the office. Or e-mail a copy of the backup to yourself - it’s a good idea to have a password for the file in case your email goes astray.

You should back up on to some sort of removable media -- floppy disks used to be popular, but CD burners are fast becoming the preferred option. You can also backup
to a pen drive or to an external hard-disk. You might also consider archiving your data, once a year, onto a writeable CD-ROM to ensure you don’t lose all your data.

Have a separate disk for each day of the week, replacing the previous week's file with the current backup. Rotate the disk so that the most recent back up always overwrites the oldest.

How to backup (MYOB Accounting/ MYOB Premier)

To backup, select File, Backup from the menu bar. Then accept or rename the file that is displayed, and let MYOB create a zip file, saving it, by default, in the same folder as the MYOB program folder.

(Note : If you are saving your backup on a removable media (which you should), you need to change the location to save the backup to).


Other data maintenance

As well as backing up, we suggest that you Verify your file weekly and Optimise your file monthly. Both of these may take some time if your file is large, so set these going before making your morning coffee!

To verify your datafile, Select File, Verify Company File from the menu bar.

To optimize the file, select File, Optimise Company File from the menu bar.


Peace of Mind

By following these rules, you will protect your file as much as you can against the things that threaten it: fire, flood, theft, computer problems, viruses, power surges, data corruptions, etc.

P/S : If you are not sure how to perform a backup, data verification or data optimization, please call the Support helpdesk.

Nov 2, 2007

Choosing a Consultant - Top 5 things to consider

What are the criteria you would look for in a consultant to assist you in implementing your accounting system in the shortest time possible?

Here are 5 points you might want to consider

1.Do not base you decision on lowest prices quoted. You need a system consultant not just to install your system. You will need to contact the consultant for assistance, support, updates, enhancement, add-on modules, training, advice, and troubleshooting.

If your consultant does not earn enough to last the long haul, he may be out of business, and you may not have a consultant to consult in the future.

2.Ensure that your consultant has sufficient experience in installing the system. Has the consultant implemented the software for similar companies (similar in size, and similar in business nature). Check out customer references if necessary.

3.Has the consultant undergone training and certification by vendor. For example, MYOB Software requires all their professional partners undergo a certification assessment annualy, and only those who meet the minimum passing marks will be allowed to display the logo on the marketing collateral.



MYOB Professional Partner logo


4.Assess the consultant’s ethics and professionalism. The better consultants generally do not talk poorly of their competition, they do not pressure you into a decision, and the dealings appear to be above board.

5.The consultants should be able to grasp and understand your business, your needs, and your goals so that he can assist you and your team mates become self sufficent after the end of the training.

What are consultants selling?

Time.

Consultants are selling their expertise and knowledge acquired over the years. They are trading their time for money.

Expect to reward the consultant for spending time with you, even if it is over the phone.

If you respect your time, then you should respect the consultant's time also, because the consultant is selling his/her TIME to you in exchange for monetary or non-monetary compensations.

Look at it this way, if every client asks for 5 minutes of free time from the consultant, how is the consultant ever going to find the time to earn their keep?

Most consulting firms have a retainer (business support / or coverplan) program in place. You should consider enrolling in the retainer program so that you can have phone and/or on-site contact with the consultant on any issues you face.

Oct 18, 2007

Malaysian Tax for Employees - Tips

If you are an employee and has the misfortune to be asked to leave for whatever reasons, the compensation you received is exempt from tax, as follows :

1. Tax exemption of RM6,000 for each completed year of service with the same employer / or companies in the same group

2. If loss of employment is due to ill health, the full amount received is exempted from tax.

Oct 15, 2007

Good Cash Flow Management

Managing the cash flow of your business is very important for business survival.

If your bank balance is always on the low side, it means that your cash is flowing out faster than they are flowing in. You need to look into the possible causes of this happening :

1. Are you paying your supplier earlier than you collect from your customer?
2. Are you holding too much slow-moving stocks
3. Are you fully optimising the resources - staff, office space, office location?

To avoid a cashflow crunch from happening to your business, here are some PROACTIVE steps you can take:

1. Collect your accounts receivable. Yes, this may look silly on paper, but I have come across business owners who are too busy going round trying to to get more customers and more sales, not realising that the cash is in the receivables.

You must track what is owing by your customers and don't allow the invoices to go unpaid beyond the agreed credit period. Once the invoice goes 'stale', there is a probability of that debtor-company going out of business, and you will never be paid for the services or product sold.

Remind the customers of what they owe you, by printing the words 'Pay in 30 days' or 'Due upon receipt' on the invoices you send. And follow up closely by phone, fax, or email, when the invoices are due for payment.

2. Collect money upfront. Collecting some money upfront will secure the sale. I practice 50% payment upon confirmation of order, and full payment before commencement of services rendered. Some customers may object, and ask for varying terms of payment. But if you remain firm, and explain the rationale for it, your customer will comply with your terms. My rationale is that I want to concentrate on delivering quality service without having to worry about administrative matters.

Once my prospective customer said that his company's standard operating procedure is to pay suppliers only after 30 days. I replied by saying that it's my company policy to collect upfront and we don't make any exception, whether the customer is big or small. The customer relented, and we waited for 3 days for the cheque to be prepared before we deliver the product.


3. Negotiate with the suppliers. Ask for longer credit period to settle the amounts due. We once negotiated with one supplier to pay our debts in proportion to the sales of that product. This was the time when we mis-read the market condition and ordered stocks way beyond the demand. The alternative is to return the stocks which the supplier was not in favour of.

4. Sell your inventory! Have a closed door sale and offer great discounts to your existing customers, to liquidate the stocks and convert to cash.

5. Cut fixed costs. Sit down and find out areas where you can reduce costs as this will generate extra cash for the business. Areas to look into are telephone bills, and rental agreements.

6. Take drastic action . Look into the viability of moving your business to a smaller office where the operating costs are much lower. However you need to work out the moving-out costs (rental deposits, renovation cost) versus the staying-put costs, and the cash savings from the relocation.

If the credit squeeze prolongs, the business (and the owner) may face one of the following consequences :
1. Company lose out on business opportunities
2. Suppliers will harass you for payments, and may impose cash terms for new orders.
3. You feel stressed out, and this may affect your health, and your ability to think and strategise.
4. Your staff will lose confidence in the company's ability to continue as a going concern, and may leave you
5. Eventual closing down of business


Just remember, profit is merely a book entry. Cash is king. Take time to understand the cash flow cycle (sale-debtor-cash-stock-sale). Managing your cashflow is made easier if you have an accounting software, like MYOB Accounting, to assist you.

Oct 11, 2007

Are you too old to use accounting software?

Age is just a number. Last month, I had the privilege of training a 65 year old man to use an accounting software to keep the books of a clinic. The clinic belongs to his daughter and he has been using Microsoft Excel spreadsheets to track the cash inflows and outflows. He wanted something simple to help him prepare the Income Statement.

I introduced the entry level range of accounting software (MYOB Business Basics) for the clinic, which in my opinion meeets his requirements very well.

Initially he was quite worried about using an accounting software because he said his knowledge of accounting is "very basic". But I assured him that using MYOB is just like entering data in Excel spreadsheets. After he has entered the data, MYOB will do the rest - "post to the ledgers", and generate the Income Statement and Balance Sheet, without any need for him to master "debits" or "credits".

After 2 lessons, he is now happily generating other reports on his own. His next project is to teach the clinic assistants to enter the data, and he will review their work.

So, age should not be a reason for not learning something new.

By the way, this same man earned his MBA at age 64 - he only told me at the end of the training. He said he could learn up the software by reading the manuals himself, but he wanted to leverage on an expert's advice, so that he can start on a correct footing.

Oct 1, 2007

Top 10 tips on choosing Accounting software

Top 10 tips for Choosing Accounting software

If you are thinking about implementing a new Accounting software for your business, then you should gather all the facts before you make the decision as to which accounting software to buy, and more importantly, which service provider to buy it from.

Nowadays, accounting software performs more than just book-keeping functions. As a decision maker, you should consider the impact of implementing the software in the purchasing, receiving and sales department, besides the accounting department.

If you are a small setup (with less than 5 employees), then you need to consider also whether the system can be operated by the existing staff under your employ. It will save you much needed resources.

Top 10 Questions to prepare your Business for the new software

Before you evaluate the features of the new accounting software, you should spend more time evaluating your own business processes.

1. Identify tasks which are routine in nature, tedious and is time consuming to perform. These tasks can be automated easily. Eg.preparing customer statements

2.Identify the tasks or activities that causes the highest error, or produces inaccuracies that can affect your business operations.For example, errors in invoice computation

3.Identify the information that, if become easily available, could have boosted productivity and profitability. For example, analysis of gross profit by salesperson .

4.Identify the accounting and non-accounting information that flows through the different departments in your company. Separate the must-have information from the 'good to have' information.

5.Make a list of requirements that is unique or special about your company or its operations, for example, do you require serial number tracking

6.Identify the number of users that will be using the system simultaneously

7.If you have branches, is it necessary to have remote access?

8.How much are you willing to invest in the whole project

9.Assess the level of accounting and computer experience of the users.

10.Besides delivering financial statements, what else do you need your accounting software to do :
Create Invoices for Goods / Services
Purchase order
Track Inventory
Handle foreign currency transactions
Job Costing & project management
Budgeting
Tracking Accounts Receivable
Tracking Accounts payable
CashBook


When you meet your consultants, you are prepared

Sep 7, 2007

Malaysian Budget 2008 and the SME's

Malaysia's Finance Minister (who is also the Prime Minister) has presented the country's budget for year 2008 today. The complete text of the budget speech (which lasted 1 hour 30 minutes) is available from the official Government portal.

I always try to make time to listen firsthand to the budget speech. My first boss, a tax practitioner started us on this habit. While we are listening /watching TV, the dispatch rider will be queueing at the Finance Ministry to get the "embargo" copy of the speech. Once he gets hold of it, we will begin to prepare a newsletter for our clients summarising the impact of the budget on their businesses, from a tax viewpoint.

So how will this year's budget impact your business?

1) For one, there is a big shift in the taxation of dividends. Previously, when a company pays out dividend to the shareholders, the company will deduct tax and remit net of tax to the shareholder. The shareholder will then claim the tax back for the Income tax department if his tax bracket is lower than the Company's tax bracket. This causes a lot of unnecessary administrative work. With effect from next year, dividends will not be subjected to tax at source, and so shareholders can receive 100% of the dividends upfront. Good news indeed, especially for the retiree-shareholders of Malaysian public listed companies!!

2) Corporate tax rate is further reduced by 1%. The tax rate for year 2007 is 27%, for year 2008 is 26%, and for year 2009, it will be 25%.

3) Gains from disposal of property is exempted from Real Property Gains Tax (RPGT), while the stamp duty for purchase of one (1) house costing below Rm 250,000 is reduced by 50%

4) Donations to schools, especially Chinese, Tamil and religious schools will be tax exempted. So be generous!

5) Do your bit and offer to sponsor computers and pay for broadband subscription to your employees home. You will enjoy tax deduction for the payments. This is to nurture a knowledge based economy.

More details when the budget is gazetted and the finance bills are issued.

Apr 13, 2007

Accounting software and business survival

Computerised accounting software is a great tool to help your business survive, if you know how to use it.

In this post, I want to highlight how 2 businesses which started at approximately the same time, about 6 years ago, but they are now miles apart in terms of financial health.

Business 1 is involved in the construction business. The owners left the accounting functions to a team of in-house bookkeepers. Unfortunately, the owners did not use the data generated by the accounting software to their advantage. The company is now being sued by many suppliers to recover their outstanding amounts. The irony of the situation is that the accounts showed a huge and glaring amount of advances and recoverables outstanding from staff and customers, yet no action were taken to recover them. The customers have disappeared from the scene, and the company is saddled with legal disputes from suppliers. The projects were profitable, but the company did not keep a check on their cashflow.

Business 2 deals in electronics products. The business started at a slow pace and is now showing a healthy cashflow despite being in a very competitive industry. The owner uses MYOB Accounting software in their daily operation - purchasing, sales,a dn banking. He engages a professional accountant to come in once a month to reconcile the bank accounts, and to provide a professional review of the accounts. He also uses the data generated by MYOB accounting software to control the inventory levels and also ensures that the customers do not exceed their credit terms. The owner understood that cashflow is critical to the survival of a business.

Both businesses have MYOB Accounting software installed in their business. Both the business owners are non-accountants. The difference is that business owner #2 made full use of the tool he had to help him manage his business better.

What did business owner #2 do right? :
1. "I used the sales analysis report to get an average quantity of sales for the last 3 months. And I place an order for that quantity at the beginning of the month. That way, I will not run out of stock when customers want to buy, and I also will not be overstocking excessively. My cashflow is quite healthy because I have funds from the sales to pay my suppliers."

2. "I learnt how to use the customers receivables report as a basis for collecting overdue accounts. I call them and ask when we can collect the payments. After doing this a couple of times, I have inadvertently educated my customers about our collection policy, and most times they will comply with the credit terms. It makes my work of monitoring the cashflow much easier."

3. "When I am bidding for a contract, I use the jobs feature to track the project profit and also prepared a budget for the entire project. This allows me to know which project was successful."

4. "I also print the income statement by months to see how I fare compared to previous months."

In summary:
An accounting software is the best tool any small business can have. But like any tool, you must learn how to use it well. And with MYOB Accounting, it's not difficult to learn how to print the reports. It's learning how to read and interpret the accounts that can break or make the business.

On hindsight, if you are starting a new business, you should computerise your bookkeeping functions as early as you can.

Mar 18, 2007

Product Review : MYOB Premier Accounting Small Business Suite 2007

Read about the review of MYOB Premier Accounting Small Business Suite 2007 by PC Mag, excerpts below :

The MYOB line of accounting products for small business goes back to the early 1990s, has always competed well with QuickBooks, and, because of its Mac origins, has always matched that product in usability—yet many people still don't know about it.

The big news in this version includes integration with Microsoft Outlook (2000 through 2003 only), payroll import and preview, error correction in bank reconciliations, and easy migration from sales orders and quotes to purchase orders. The developers have also made a passel of smaller, useful changes. It looks great, too: I've yet to find a screen in the latest MYOB interface I wouldn't consider cleanly designed, easy to understand, and detailed.

Transaction forms, such as invoices and purchase orders, offer plenty of detail and flexibility, and, with over 200 reports, you have more than enough for exhaustive management overviews. Exporting of reports works well with Microsoft Office 2007, as does mail merge. The product also competes well with its most formidable peers, such as PeachtreePremium Accounting and QuickBooksPremier, in its ability to track time-billing, jobs, and inventory.

Mar 5, 2007

Feb 7, 2007

Don't need to close accounts

This is a tale about another of our clients. They had a 'legacy' accounting software, meaning a software written many, many years ago (>20 years) using the technology at that era.

What happens is that this client is not able to continue with entering the new year's transactions without having to 'close' and 'finalise' the previous year's entries.

Now how many companies have the resources to be able to 'close' and finalise the last year's accounts within days after the year-end. It is usual for companies to take some time (even with a computerised accounting software) to finalise the accounts because they have to consider, amongs others:
1. inventory valuations
2. bills not received yet (accounting matching principle)
3. tax
4. uncollectible debts

To cut the story short, in May 2006, this client was still keying in their 2005 accounts into the old accounting software. Their auditors completed the audit for 2004 accounts in August 2005, and so the staff could only start entering their 2005 accounts from September 2005. They took almost 9 months to enter 12 months accounts.

Fast forward to new MYOB system which we installed in May 2006. They started keying in the 2006 transactions right away, and as of this instant, they are on top of things. They are now able to key in the 2007 transactions while waiting for the audit of 2006 accounts to be finalised.

That is one big benefit they got out of the system. There is no need to close the accounts before starting a new financial year.

Another big benefit is that all reports can be exported to Microsoft Excel, and they don't waste time rekeying data. More importantly, data is not lost in the process of transcribing the data from the system to Excel.

MYOB systems requires you to purge your accounts every 2 years though.

MYOB replaces my typewriter very well.

Last month, I was approached by a business owner who has been in business for many years (> 5 years) and is still using a typewriter to write their invoice. the accounts have not been updated the last 6 years.

I asked him what made him seek us out.

His answer is scary. "I don't know how many of my customers have gone to my competitors because of lack of follow up by my team. They cannot get the information easily from my method of recording. They need information like when was the last sale made, and whom to follow up to remind them about renewing their maintenance plan, but they got to go through many files to get that information. its a waste of their time, and then they give up on me."

His staff uses a typewriter to write out the quotation, delivery order and invoice onto a pre-printed forms (doing same things 3 times over). He then enters the invoice details into an exercise-book, and updates the book when customers pay. I'm sure he may have missed some payments this way with some crafty customers.

Since we installed the MYOB business software, his staff is using the system to print the quotation onto the same pre-printed form. When the customer confirms the order, the staff calls-back the quotation, make changes as necessary, and click 'convert' button to convert the quotation to a delivery order and prints it out. This way, the staff is only dong the same things ONCE only. Best of all, the system also tracks the receivables, and also the amounts outstandings. No additional work involved here. It was normal for them to take a few days to prepare one customer's statement. Now they just select the customer, click and print it out.

His staff now has the time to follow up on the 'lost cases'. He has deployed his teenage son to update the sales data for the last 5 years (yes, that's how long he has been doing business the manual way)

The thing to note is, by them doing the normal routine- issue sales invoice, enter supplier bills, update customer payments, and issue payment vouchers, their accounts get updated without them knowing it. To the staff, what they are doing in MYOB is nothing different from what they are doing manually - just a change of medium - from a typewriter/pen to a computer. Yes, I have to teach them "right click, left click on the mouse" but they soon got over the initial teething problem.

Now the staff are getting ambitious. They have picked up basic bookkeeping knowledge from the trainer, and are now aiming to complete the just-concluded year 2006 accounts within 2 months. I don't see why not.

Jan 8, 2007

How to choose an Accounting System

Selecting accounting software is a critical business decision. In fact, when properly selected, installed, and implemented, accounting software can contribute fundamental benefits to your organization, including
better decision-making capabilities,
improved cash flow,
more accurate information and control,
and a real foundation for growth.


That’s why understanding your business’s financial information capabilities and weaknesses is vital to selecting the right solution.

What are the criteria I would use when choosing an accounting software?

1. Easy to use.Even though the software is tagged "user friendly", you need to take a 'test drive' to see whether the software is really easy to use.

A quick acid test will be how fast the user can pick up the basic functionality of the software during a demo presentation. An easy-to-use software would facilitate easy transfer of knowledge between old and new staff. The user should also be able to pick up the functionality from the user-manuals, or from a quick call to the consultant.

For example, the sales input screen should be intuitive in that the sales staff should be able to know by looking at the screen what to put in which field, and where to go if a printout is required.

Of course with proper training, the learning becomes even faster, but at least, a staff with initiative should be able to get by before training can be arranged.

2. Simplify the process
The software should simplify the processes of issuing invoices, purchase order, payment vouchers, cheques, statements and other documents required in a business. Preferably, these documents can be easily customised by the user, and can be electronically sent (by email etc) to the recipients.

3. Reports - customisable?
Most off the shelf accounting software produce standard reports. If you need unique reports, you should look for a software that allows you to customise your own reports (but make sure you have the capability to do your own customisation). Most times, customisation comes with a cost. So consider whether the data can be exported to other commonly-used applications like Microsoft Excel or other spreadsheet applications for further analysis.

4. SupportSupport should come in the form of
- onscreen help/tips
- user manual - print / online
- local one-on-one support with a consultant

5. Easy to trace data within the software.
The data, once keyed into the system, should be easily traced and tracked, either by transaction date, keywords, customer name, supplier code etc. It should allow for 'drill down' to the source documents from all reports.

6. Features
Most important, the software should meet your basic requirement. If you deal in foreign currencies, make sure the software can handle multi-currency transactions.
If you have multiple warehouse, make sure that the software can identify stocks by locations.

Jan 6, 2007

MYOB the software

Mind Your own Business - may sound rude to the ears. But that is the tagline which is used by a popular accounting software called MYOB.

MYOB is a an easy to use computerised accounting package for the small to medium businesses.

If you are computer savvy, and have some basic accounting knowledge, you can literally start preparing your accounts the moment you completed installing the software.

For those who are not so familiar with computerised accounting packages, or do not have any basic accounting knowledge, I suggest you invest time and money to get the proper training from a trained MYOB consultant in order to use it effectively. It pays because this simple-to-use software has powerful features which can save you hours of repetitive work. For example, not many existing MYOB users are aware that the software can be customised to print the name of payee, and amount of payment onto the cheques, thus saving you time from handwriting the cheque.

To read more about the accounting software called 'MYOB' go to
http://en.wikipedia.org/wiki/MYOB_(software)

http://www.myob.com.au/