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I have just signed up to the Premium Pro Debitoor Account, I wanted to have online access and did a comparison to Xero, Sage, Kashflow and Free Agent. I thought Debitoor was excellent value for money (£9/mth for Premium Pro) and I have long been a fan of their online invoicing.
Debitoor is an easy-to-use invoicing and accounting software which helps freelancers and small businesses produce nice-looking, professional invoices in a matter of seconds and assists them in their accounting.
Debitoor is designed for straight forward businesses so if your business is complicated then its probably not the best option for you.
So this is how you get started:
- Create your contacts – Clients and Suppliers
- Create your Products
- Enter the opening balances on the balance sheet (reports) – Debitoor currently only works in calendar years (Jan to Dec) so if like me your year end falls on a different date you will need to enter the balances in the previous year, in my case my year end is March so I entered the balances in 2014 I will then do a year end and they will become the 2015 opening balances and I started entering invoices and expenses in April. I know that’s not ideal and Debitoor are constantly working on improvements, so its compromise for now.
- I then created multiple bank accounts – Lloyds, Directors, PayPal
- For expenses that I had invoices and I uploaded the PDFs of the expenses
- I then uploaded the bank statements for Lloyds and PayPal and reconciled and posted them
Anyone who works with businesses is fully aware of how important accounting is for the success of a company. Yet many business owners have a negative attitude towards accounting. A high percentage of entrepreneurs see accounting as a necessary evil and often a hindrance to starting a new company.
How is that possible? Wasn’t accounting invented to help companies manage their business?
The IT industry has brought us computers and the ability to create software to automate bookkeeping. While there is no doubt that accounting software has been a great help, when we look at the usage of it, something is wrong. More than half of the businesses in the UK keep track of their finances by using a combination of spreadsheets and word processors rather than using accounting software. In an age where computing power is ubiquitous and virtually never too far from our pocket, we should be able to do better than this.
In 2013, international accounting software provider e-conomic was considering what its next generation accounting software should look like. And decided to take a different approach. What would happen if we created a piece of accounting software for people who had no knowledge of accounting? And what if we made the basic functions free for people to use? We hoped that it would make accounting approachable by virtually anybody.
That’s how the Debitoor invoicing and accounting software was born.
Introducing simple accounting to the world
Today, more than 33,000 people in the UK and almost 300,000 people worldwide have signed up for Debitoor and have given us the privilege of approaching accounting in a different way. Debitoor is used in more than 30 countries, from the UK to South Africa, from Colombia to Australia and New Zealand.
Debitoor is an accounting package for very small businesses. It allows them to manage their customers, create quotes and invoices. It allows them to register their purchases, deal with bank and payments and helps them report their VAT directly to HMRC at the click of a button. Debitoor helps those small companies manage their assets and keep track of what’s on their balance sheet in a very simple manner. Finally, Debitoor helps business owners collaborate with their accountants by allowing them to share their data with them.
Debitoor’s mission is to make accounting cool to work with. Two years after we started, the typical reaction we get from accountants is: “Wow, convincing my clients to use this is going to be super easy!”. We have captured the essence of Debitoor in this video.
Letting users shape accounting software
But what have we done to make this possible? The most important ingredient has been a clear focus. Our mission has always been to make accounting easy for small business owners who know very little about accounting.
Here are some of the key principles we followed to build the Debitoor invoicing and accounting software:
– Approachable: We have removed any obstacles to getting started. There is no setup needed, we do not ask questions, users can start on the free package, the program is ready to go.
– Natural: We have eliminated all technical lingo. You will not find the words “debit” and “credit” in Debitoor. The workflows in the program follow the natural flows of a user with no accounting knowledge and the program uses the typical words he’d use.
– Forgiving: People make mistakes; and accounting systems typically make it quite complicated to correct mistakes. In Debitoor, actions can be undone and mistakes can easily be corrected.
– Instructive: We assume people do not know much about accounting, so we have structured the entire program to let users learn along the way. This is not just functionality but it encompasses the entire packaging of the product.
– User-driven: In an open forum, users can give their feedback and suggest new features, vote for their own or others’ suggestions and influence the further development of the software. This transparency is super important for us to develop a truly user-driven program.
– Collaborative: Most of our users share their data with their accountants in order to get help with taxes, reporting and ensuring quality.
We also had the privilege of building the product with the technology which was available in 2013. This has huge benefits for our users because it allows us to provide them with a service which is reliable, improving at a fast pace and very secure. Having a modern architecture also ensures that Debitoor is very easy to connect to other popular cloud services.
Debitoor’s user base is very diverse as its appeal is quite broad. Many of our users are freelancers, artists, consultants, designers or other creative people, but we have also small artisans and shop keepers or owners of clinics and small distributors. They all have missions and purposes in their lives and we try to help them with their accounting.
Changing how an industry works
As with any change in technology, this brings great opportunities to the industry it affects. The introduction of new technology, however, takes a bit of time to mature. When television started to gain mass adoption in the 1950s, broadcasters used it as it was radio. The first shows had older men with glasses reading papers in front of a microphone. This was how it used to be with radio programs.
The availability of cloud software has created a set of providers who simply made traditional accounting software available on the internet. This, we believe, will change and we will see more and more software which is transformational in nature. That is what we are trying to do with Debitoor.
We are only at the beginning of this journey. The roadmap for Debitoor will focus on three main aspects:
1. Continue to add simple flows to support what today are very difficult accounting scenarios
2. Introduce more and more automation and intelligence to enable our users to do more with less knowledge
3. Strengthen the collaboration between users and their accountants by facilitating the sharing of data between them.
What will this mean for accountants and the accounting industry? This is what our users are telling us: They love doing their invoices and keeping track of their costs in Debitoor. It gives the nice feeling of being in control, it keeps them organized and allows them to focus on their business going forward.
At the same time, they also tell us that they need help from their accountants. They need help with taxes, they need help with reporting to authorities and a lot of them need a quality check from the experts. In addition, most of them need legal and financial advice on ad hoc issues they encounter in their life as entrepreneurs.
The biggest change for accountants is to be prepared to embrace the possibilities that technology gives us. Things like cloud storage and online applications will substitute manual processes, paper and data disks. Everything is now available via a web browser on your computer or on your phone.
In order to be successful, accountants will have focus on services that draw on their knowledge and experience and they will need to be prepared to serve their customers as they move towards those new technologies.
Increased access will not be limited to technology but also to services. This will also mean increased competition. The best thing an accountant can do is embrace change and be ahead of the curve, start small but start early. The customers are already going there.
Debitoor is pleased to announce the partnership with the Association of UK Accountants. This organisation works with 300 independent accounting practices accross the UK and all the accountants are Chartered Management Accountants. If you’re on a lookout for someone to handle your numbers, just head over to the dedicated Debitoor page and pick your local from the Accountant list.
Following this, we had a chat with Steve Bicknell – the Business Development Director for the Association of UK Accountants to find out what the business he represents is all about and to shine the light on the most common accounting mishaps.
What makes ‘the Association’ different from other accounting organisations?
Unlike others, our accountants all worked in business before going into practice and we are focused on helping clients to maximise profit using management information rather than just helping with tax compliance. All of our accountants work together as a team sharing knowledge and experience, supporting each other.
Who is your typical client?
In our December 2014 survey 39% of clients had a turnover below £100k
Our survey also showed that the top 4 business sectors we work with were construction, manufacturing, professional service and retail.
Start up businesses try to do everything themselves at the very start, that also includes accounting. When, in your opinion, is the right time to get accounting services, rather than keep up on your own?
Often business owners wait too long before they realise that they need help from an accountant.
Key reasons are:
– not understanding the difference between a book keeper and an accountant
– thinking that an accountant will just be an extra cost – the reality is that most accountants will save the business many times their cost
– thinking that accountants are just bean counters.
But if you choose a qualified and experienced accountant they can bring huge benefits: management tools to improve profitability, cost controls, tax savings, growth strategies, business planning, business strauctures and much more. So don’t wait too long – getting an accountant should be a priority for all businesses!
In your experience, what are the most common mistakes that entrepreneurs make when they start doing their own accounting?
First off – not having a separate bank accounts. Many start ups try mixing business and personal transactions in their personal bank accounts, its a total nightmare, don’t do it, get a business bank account. Mixing things up will almost certainly have tax implications.
Not registering for tax or filing returns is another one. Getting things right at the beginning is extremely important and a CIMA Accountant can make sure that you choose the right business structure and will help you register for VAT, PAYE, CIS and other taxes. Choosing the right VAT scheme will save you tax. Not registering and filing returns will have severe consequences and lead to fines and penalties.
Also – contract mistakes.Ask your Accountant to review you contracts, they will be able to give you lots of useful tips.
Running out of cash: draw up a Budget and Cashflow and forecast how much cash you will need to run the business, looking at your cash cycle and managing it will be vital. If you need funding ask your Accountant for help, they will be able to look at all the options and help you choose the option that’s best for your business.
Accounting – many start ups fail to keep control of their accounting, by working with an accountant and using Debitoor you can avoid this problem.
Why would you recommend Debitoor to the new businesses?
I use Debitoor myself, I do business consultancy work and wanted an easy way to raise invoices and keep track of payments, Debitoor was perfect for me.
Cash is king for new businesses and raising invoices quickly and tracking payments is vital, Debitoor lets you do this for free. You can then move to paid versions of Debitoor and use Debitoor for all your accounting needs. It’s really easy to use, its low cost and fantastic value.
What are the most common business problems you have to deal with during the day?
So here are my top 5 common accounting problems we deal with:
1. Not doing any accounts – the shoe box approach to business
This is the most common mistake, book keeping is best done as you go along, putting all the paperwork in a shoe box or carrier bag is a really bad idea as you have no idea how your business is performing.
2. Not keeping receipts. Often small business miss out on claiming all their expenses because they fail to keep receipts and lose track of their spending
3. Not reconciling. Reconciling your bank statements to your cash book is vital to make sure that all of your income and expenses have been recorded in your accounts.
4. Using the wrong accounting system. For some businesses a manual cash book and records are fine but for many accounting software such as Debitoor will be needed to keep track of debtors, creditors and VAT. Make sure you understand your accounting system and operate it correctly.
5. Mixing business and personal expenses. Some sole traders even mix up business and personal bank accounts and in extreme cases don’t even have a business bank account. This can cause errors and often means that a sole trader will either claim to many expenses or to few.
Improve your chances of business success, avoid the common problems listed above.
Stereotypically, accounting doesn’t come across as the most exciting field. What makes your job interesting to you and why do you think accounting is important?
One of the great joys of working as a ‘CIMA MiP’ (“Chartered Institute of Management Accountants, Member in Pratice”) is that we are generally dealing with ‘small’ and ‘micro’ client businesses (micro defined by EU regulations as firms with less than 10 employees/ £2m turnover; small defined as firms with less than 50 employees/ £10m turnover) and that we become involved in an enormous breadth and depth of subjects.
If you don’t have accounts, you will lose control of your business and fail to keep track of who owes you money.
What motivates you daily?
Helping businesses to succeed. We want to use our skills to help our clients to achieve their goals.
If there’s one most important thing you would suggest to a new business to consider in the New Year, what would that be?
The best advice for all new businesses is to not put off doing your accounts, don’t take the shoe box approach, use Debitoor!