Anticipated Payments in LEAP Legal Bookkeeping

If we weren’t dealing with Legal Firms and more specifically Legal Trust Accounts there would be no need for “Anticipated Payments.” Legal Firms often receive money in advance into their General Trust Account which can be used for either direct payment of costs relating to the matter (eg.Barristers Fees) or for payment of the Legal Firms Invoices relating to that matter (providing they have a signed Cost Agreement in place and that they have given the client 7 days notice of their intention to withdraw fund from the clients trust account to pay their invoice ie. a Trust to Office Transfer).
The Regulations governing Legal Trust Accounts require that the Law Firm must have actually “Paid” any 3rd Party Disbursements before they are allowed to do a Trust to Office Transfer (TTOT). The reason for this is that some firms were writing cheques for the disbursements then putting them in a drawer for a couple of months but they were withdrawing the clients funds to pay their own invoice via a TTOT.
Therefore “Anticipated Payments” name for “Account Payable” that are specifically relating to Client Disbursements.
Accounting Treatment
Although LEAP Cloud allows you to monitor these accurately within the Matter in LEAP, the accrual does not flow through to wither Xero or MYOB with the Office Account Integration. Therefore if the Law Firm is reporting on an accrual or hybrid basis you would need to manually enter this adjustment at the end of the month to account for it in both your BAS and Management Accounts.

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Bookkeeping on the Cloud – MYOB AccountRight Live, QuickBooks Hosted, Xero and Saasu Comparison

After a couple of years delay, myob are nearly ready to go live with their full cloud product. MYOB have taken a different cloud strategy to it’s competitors which you need to comprehend when comparing the different cloud options. Each product has it’s strengths and weaknesses in which I’ve summarised below.

Quickbooks Hosted, Xero and Saasu are a fully cloud based product. This means that your data file is stored securely and fully encrypted on the cloud and you can only work on the file while you have the internet connected. MYOB AccountRight Live enables you to have the data file sored both online and locally at the same time. If the internet goes down or if you want to work on the file on a plane for example, you just work on the local file and the cloud version will be updated when you next go online. Here’s the basic monthly fees including GST and major product differences for each of the cloud based bookkeeping software :

Bookkeeping SoftwareMYOB Account Right LiveQuickBooks HostedXEROSAASU
 Simultaneous Users51UnlimitedUnlimited
Basic Monthly Package (No Payroll)$23$25.83$29$20
Medium Monthly Package$59.50$36.25$49$35
Premium Monthly Package$59.50$36.25 $64$60
 Feature Differentials:
 Purchase Orders YYNY
 Detailed Job Costing YYYN
 Detailed Budgeting YYNY
 Time Billing YYNN
 Inventory YYNY
 Offline-Online Synchronisation YNNN
 Pay Suppliers and Payroll directly from software YNNN

As you can see features offered by each product vary across the range. If your main criteria is ease of use and functionality then Xero may have the edge- it just lacks the power and scope for growth of some of the other providers. A major point of difference that is unique to MYOB AccountRight Live is the ability to pay third parties such as suppliers and staff directly from the software. This allows your bookkeeper to setup all of your payments without the need to be given access to your online banking. You just need to login and complete a simple one-step authorisation process to approve the payments. Of course price is just one factor to consider when deciding which bookkeeping software to go with. Each has it’s own functionality and user interface which you can sample by signing up to a free trial or just give us a call to discuss.

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Which version of MYOB best suits my businesses bookkeeping requirements?

With so many different versions of MYOB available it can be confusing trying to select which version is best suited for your businesses bookkeeping needs. The MYOB website can be overwhelming when trying to differentiate the main points of difference between the different versions.

We find that most of our SME clients are suited to one of the four main MYOB Products and have summarised the type of company which is best suited to each:

    1. Basic Bookkeeping

      (SME with Turnover of < $1M and no employees)- MYOB Accounting This product has all the features required of a bookkeeping system for an SME that has no employees. Features of MYOB Accounting include:

      Accounts Payable and Purchase Order management
      Accounts Receivable and quotes management
      Inventory management
      Cashflow and Profit & Loss Reporting
      Reporting by Profit Centre

    2. Intermediate Bookkeeping

      (SME with turnover of <$2M and employees)- MYOB Accounting Plus v 16This product has all of the abovementioned features in addition to a powerful payroll module which handles all superannuation and PAYG obligations. The payroll module allows you enter employees details in the form of a timesheet which can be imported from excel or entered directly. It can also handle salary sacrifice arrangements that may have been agreed with the employee.

    3. Advanced Bookkeeping

      (SME with turnover of $2M+)- MYOB Premier v10MYOB Premier contains all of the abovementioned features in addition to multicurrency accounting and also allows multiple concurrent users. The multicurrency feature is a must for importers and exporters.

    4. Advanced Bookkeeping with remote access

      (SME with turnover of $2M+)- MYOB Enterprise v4MYOB Enterprise is ideal for businesses requiring remote access. Your computer network must be set up with Windows Terminal Services. This means all of your software is installed on a server and the server does all of the work, allowing you to get many more years use out of your old computers.

If you have any enquiries about which is the best level of software to handle your bookkeeping requirements, please contact us at Books Onsite and we’ll be happy to assist you in your decision.

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MYOB Add-on – Money Manager

MYOB and Quickbooks now dominate the SME market for bookkeeping and accounting software in Australia. As a result there is a whole industry of add-on products that enhance the reporting capabilities and functionality of the software.

One of the products that we utilise for many of our clients is Money Manager.

If you use jobs within MYOB to report on the profitability of different profit centres within MYOB, you will find that there are some limitations with setting budgets for these different profit centres. Money Manager overcomes these limitations and allows you to set detailed budgets for all of your profit centres and then consolidate them to form the company budget. It gives you many more options when viewing reports for actuals v budgeted figures.

Money Manager also provides a fantastic cashflow forecasting tool. It integrates with your MYOB data file to combine your actual YTD result with your latest forecast in Money Manager to produce cashflow forecasts years in advance. Not only is this a great management tool but banks love it if you need to apply for finance.

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Cash v Accrual Accounting

Occasionally, when we do an audit on the accounts of new clients we find that the previous bookkeeper has been keeping the accounts on a cash basis. This means that they are entering revenue and expenses when they are paid, not when they were incurred.

With modern accounting software such as MYOB and Quickbooks, there is no excuse to keep accounts on a cash basis and it usually reflects laziness on behalf of the previous bookkeeper.

Accrual accounting is based on the matching principle. That means that for any given period, you need to match the revenues with the expenses incurred for the period to enable you to use those accounts as a true measure of performance. A simple example of this is where a salesman may have an extremely successful month resulting in a large increase in sales for the month which earns him a bonus. The bonus may not be paid until the next month, however in measuring the increased profitability for the month you would want the bonus to be deducted from the increased revenue. An accrual accounting system will allow you to expense the bonus in the month it was incurred, even if it is paid later on down the track.

Some business owners confuse the cash v accrual basis for their management accounts with what basis they are registered for their BAS. If you are registered to report your BAS on a cash basis, you can still run a cash BAS out of MYOB or Quicken if you are keeping management accounts on an accrual basis.

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