The ATO has developed an electronic record-keeping tool called ‘E-Record’ to help businesses be more efficient in keeping records electronically. It has been designed for businesses that use a cash basis of accounting, paper-based record-keeping, and one bank account. It may also be useful to try before using similar commercial software products.

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Although we can’t recommend the right commercial software to use, we can provide you with an example on how a commercial software like Cashflow Manager small business accounting software can be a good alternative to your small business or home business.

Here is the brief feature comparison:

	ATO E-record	Cashflow Manager
Manage your business details	YES	YES
Manage your cashbook details	YES	YES
Manage your worker records details	YES	YES
Calculate figures for Activity Statement	YES	YES
Monitor your cashflow position	YES	YES
Prepare and print your own tax invoices	YES	YES
Reconcile your bank account with your cashbook	YES	YES
Calculate your Instalment Income	YES
Manage your Asset Register	YES	YES (with Rent Manager purchased separately)
Record stock purchases and sales with Stock Log	YES	YES
Price	FREE	$495 per user license – LEARN MORE
Detailed feature comparison or screenshot comparison	LEARN MORE ABOUT ATO E RECORD	LEARN MORE ABOUT CASHFLOW MANAGER SOFTWARE

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Small business bookkeeping is a necessary evil. You either get it right and earn yourself lots of free bookkeeping time for other work or you get it wrong, and let your accountants or bookkeepers fix it for you.

Not every small business owners have the privilege of mastering accounting concepts. For example, a self-employed florist may have lots of experience making and selling flowers will suffer silently when it comes to doing her books. Or a tradesman may be competent in fixing pipes may also struggle to grasp double-entry accounting jargons like ‘debits and credits’, ‘journal entries’, ‘accrual cost’ etc (in which students normally spend 3 years or more in universities learning  these jargons for their accounting degree). This problem is validated by Dun & Bradstreet, the number one credit agency for businesses, which identify that 90% of businesses fail because of a lack of financial management skills or knowledge on the part of the owner.

With the lack of accounting education, small business owners try to compensate their skills with the help of small business accounting software. They shop with the advice of their accountant who end up recommending an accounting software that is sophisticated enough to make them feel like a ‘dumb beginner’. Now, a new problem is born. These small business owners have to climb a big learning curve before they can understand how to record their receipts and payments and so forth. They are caught in the dilemma of ‘How can I do my books yet run my business with free bookkeeping time?’. With the market filled with sophisticated accounting software like MYOB/Quickbooks, they have to sacrifice lots of time training themselves to run a public listed company when they are merely running a business with zero staff! This common scenario is akin to using a sledgehammer to crack a nut! If you have gone through this experience, you can understand how painful it is wasting your time and money on training, re-training, bookkeeping errors and so forth.

If you are lucky enough to come across e-Record in the past, then probably you may have avoided such pain. But, the ATO is discontinuing e-Record. What now? Are you feeling jaded about the huge amount of accounting software choices in the market?

Since the focus of this post is on e-Record alternatives, you can use the below buying guide to earn yourself more free bookkeeping time! Ask yourself where do you stand with the six levels of recordkeeping developed by Accountant Mike Crowley from Mike Crowley & Associates in Orange, NSW.

These are the 6 levels of record keeping or DIY bookkeeping for non-accounting business owners:

First level of book keeping

Type of records: Shoebox records

Suitability for non-accountants: This type of record can be messy for accountants, so it is not recommended for non-accountants.

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Second level of book keeping

Type of records: Source documents (Bank statements, cheque stubs, or unreconciled cashbooks)

Suitability for non-accountants: This type of record is unacceptable because:

• a lot of work is required by accountants
• no timely information is available to help non-accountants to manage their business

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Third level of book keeping

Type of records: Manual cashbook (with receipts and payments reconciled to bank statements) and GST recordings, which can be done with Dome Books, BizManualz (USA), Cashflow Manager Manual System (Australia)

Suitability for non-accountants: This type of record is marginally acceptable as:

• no invoicing or stock control is required
• it is time consuming for non accountants and accountants

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Fourth level of book keeping

Type of records: Computer cashbook (with receipts and payments reconciled to bank statements) and GST reports generated by accounting software like Cashflow Manager (Australia), MyAccountant (Australia), MYOB Cashbook (New Zealand), MyCashBook (New Zealand)

Suitability for non-accountants: This type of record is excellent for:

• simplified tax system
• cash GST method
• when computer invoicing and stock control are not required

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Fifth level of book keeping

Type of records: Small business system with:

• receipts and payments reconciled to bank statements
• GST reports
• Customer invoices
• Supplier invoices
• Wages or payroll management

This system is available as a web solution like Ubikwiti or a stand alone software solution like Cashflow Manager Gold

Suitability for non-accountants: This type of record is excellent for:

• simplified tax system
• cash GST method
• accruals GST method
• computer invoices
• managing employees
• stock control is not needed

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Sixth level of book keeping

Type of records: Comprehensive general ledger system like Attache, MYOB and Quickbook or open source solution like Turbocash, NolaPro with:

• double entry bookkeeping
• GST reports
• Customer invoices
• Supplier invoices
• Inventory management

Suitability for non-accountants: This type of record is excellent:

• If you understand ‘double entry’ accounting
• If you prefer accruals GST method
• If advanced reporting or stock control is needed

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If a non-accountant uses a general ledger program without understanding ‘double entry’ accounting, he or she may get a ‘computerized shoebox’ solution (or end up with first level of bookkeeping results). This may cost their accountants to spend more time and money to tidy up their books.

So, where do you stand? Are you a bookkeeping master? Or you are struggling all your way without knowing there’s a free e-record alternative to help you get organised with your record keeping? Or you have found a better replacement for erecord to earn you lots of free bookkeeping time?

1. What is e-Record? And who uses e-Record?

e-Record is not e-Tax. e-Record is like an electronic shoe box for storing information relating to your tax return. e-Record users are small business owners or one man small business who want to get things right with the ATO:

• With cash basis accounting and a single bank account. Usually, this applies to businesses with a current or projected annual turnover of $1 million or less.
• Without relying on paper-based record keeping, manual “pencil and paper” bookkeeping, or Excel spreadsheet record keeping.

System requirements for e-Record 5, e Record 6, e Record 6.2 or e record Windows 7 can be found here.

Sadly, e-Record users will not be able to use it because ATO is withdrawing e-Record from July 2010 on the ground that “it’s no longer compatible with current commercial record-keeping systems”… and will need to be re-developed. This means that eRecord v6.2 will no longer be maintain or support in Windows Vista, Windows 7 or Mac by 30 September 2010. However, you can still download eRecord at this non-ATO accounting software site.

Small business accountants also confirmed that eRecord will not be used anymore.

2. ATO eRecord stores its data in what format? Can I easily export data from e-Record to other cashbook software?

Yes, as long as your cashbook software allows you to import data in XML format, then you can follow these instructions to export your cashbook data from e-Record to a preferred cashbook software (Yes, it sounds really complicated!):

How to export Cashbook data

This export function allows you to export the Cashbook, Cashbook summaries and Summary of Income and Expenses data into a tab delimited text file. You can then convert the tab delimited text file into other formats such as a Spreadsheet i.e. Microsoft Excel. Once the data has been imported into a spreadsheet it can be maniuplated to be then imported into other accounting applications.

1. From the Cashbook worksheet, go to the File menu and select “Export data from Cashbook” and then select the data you wish to export from the submenu that appears.
2. You will be prompted to save the file. Save the file to your chosen location. e-Record will assign a name to the file that includes the business code and the type of data being saved – for example, “CODECashReceipts”. It will be saved as a tab delimited text file.
   Importing:
   1. The following instructions are to import the file into Microsoft Excel. If you wish to import it to another program, please see the help in that program.
   2. Open “Microsoft Excel”, go to the File menu and select “open” and then browse to the location of the tab delimited text file. Note: It may be necessary to change the “Files of Type” to “All Files *.*” to see the text file (it will have a file extension “.txt”).The Microsoft Excel wizard should then guide you through the conversion process. You will need to Click <Next>, then <Next> again and then <Finish>.
   3. Save your document as an Excel file, using the <Save As> option in the <File> menu. Ensure you choose “Excel document” as the file type.
   4. Your data is now displayed and saved as an Excel spreadsheet. You may manipulate this data as you require.

For your information, e-Record store its data in XML format. See below screenshot:

You will not be able to export the XML file to Cashflow Manager because it is important for Cashflow Manager’s new users to start using it only at the beginning of a new financial year or month to ensure that the monthly bank reconciliation process is automated for you.

3. What are the eRecord alternatives I can consider as a small business? What can I replace eRecord with?

If you are looking for free cashbook software similar to erecord, or similar cashbook to ato paid software, then you need to test drive all accounting log books and find out what you are most comfortable with though. Most importantly, get an honest small business accountant to recommend the right software for your small business. We have develop this ‘top 10 FAQ guide’ to remind businesses that paying for people to get trained in complicated accounting software suites like MYOB and Quickbooks can be costly when you grow your business hiring new people to do your books. So, getting something as simple as Cashflow Manager software for your bookkeeping is going to free you up a lot of your time in the long run. It comes with a ‘try before you buy’ 90-days money back guarantee. Don’t just take my words! You can look at other user’s recommendation on why Cashflow Manager is suitable for self-employed business or small business.

4. What similar free accounting programs or small business accounting software can be e-Record replacement?

There are free accounting programs that allow you to do normal bookkeeping but do not work well with the Australian small business ATO tax calendar. There are also many small businesses accounting software that proclaimed itself as ATO-compliant when they are not! So, you should always consult www.softwaredevelopers.ato.gov.au before you make your purchase!  An exact match eRecord cashbook software that is ATO compliant yet free for 90-day trial is – Cashflow Manager. Why? Look at the blow-by-blow detailed feature comparison between eRecord vs Cashflow Manager.

5. I want to continue using eRecord to complete my 2010 or prior income year records but eRecord won’t install. How can you help?

Take it as a good news. eRecord has proven to be so unreliable and very frustrating to use, so the sooner you can switch to another application, the better it is for your business and you! Don’t believe me? Look at some user feedback here and here.

6. I don’t want to buy double entry bookkeeping software (eg. MYOB/Quicken/Quickbook) as eRecord replacement because I have bad experience with them. What can you recommend?

The fact that you don’t want to buy MYOB/Quicken/Quickbook as eRecord replacement is probably because you:

• find it too complex for your small business, or
• you find climbing the learning curve too hard to master the principles of double entry bookkeeping (which is why accounting degree cannot be awarded within few months), or
• you find it too expensive to receive MYOB training or Quicken/Quickbook training to learn how to use their accounting products

Above all, small business owners cannot guarantee themselves to have organised records after the training session due to forgetfulness or other factors!

Therefore, I would recommend you to evaluate your needs with this 6 levels of record keeping chart, and ask yourself whether you need an accounting software more suitable for non-accountants like Cashflow Manager. In my opinion, Cashflow Manager is the best single entry bookkeeping software in the Australia market.

7. I am afraid to try unknown accounting software  (eg. Tencia or Prinz Online Accounting software) as eRecord replacement. What can you recommend?

I do acknowledge the fear to even try unknown accounting software like Tencia or Prinz Online Accounting software as eRecord alternatives. That is the biggest reason why I encourage users to be honest with their record keeping skills, in order to ask themselves whether they need an accounting software that is more suitable for non-accountants like Cashflow Manager.

8. I am a Mac user. How can I replace eRecord?

Cashflow Manager does not support its software on any hardware platform other than an IBM based PC running Windows XP or Windows Vista operating Systems.

The following information may be helpful for end users who have Intel based Macintosh hardware (It is not supported by Cashflow Manager).

The current Mac ranges have the capability of converting to the IBM based PC platform via two methods:

OPTION # 1: STANDARD SETUP

All new Macs come with a program called Boot Camp pre-installed under the Utilities icon. Once set up, this allows the computer to be started using either the Macs operating system Leopard or a different operating system i.e Microsoft XP or Vista.

*To use the Boot Camp feature you must install a licensed copy of Microsoft XP or Vista on the Mac as Microsoft operating systems do not come pre-installed on a Mac. This is a simple process and only needs to be done once.

Once the Microsoft XP or Vista operating system is installed you are given the option of using the computer in either Mac or Microsoft mode each time that you start or re-boot the computer.

The next step is to install the Cashflow Manager software, to do this simply start the computer in Microsoft mode and install via the standard Cashflow Manager installation instructions.

PLEASE NOTE. If you are using Microsoft Vista then you will need to follow our guidelines which can be accessed via the website: www.cashflow-manager.com.

OPTION # 2: FOR ULTIMATE CONVENIENCE

Using emulation software called Parallels Desktop or VMware Fusion (which is sold at similar price). Take a look at the comparison here. These programs can be placed in the program dock (similar to any other Mac program) and opened at any time while working within a Mac environment. The user can toggle between the two platforms (Mac or Windows) when necessary.

NB: Running Cashflow Manager software on a Mac is not supported by Cashflow Manager.

However, as more information becomes available through end user feedback, more details will be made available. Any feedback is welcome if you have been successful in running Cashflow Manager software on the latest “Intel processor” based Macintosh computers.

“Intel” based Macintosh feedback:

Please submit your feedback by emailing

support@cashflow-manager.com

or fax to Technical Support on 8275 2075

Some users have suggested Moneyworks because it’s Mac/Windows dual-platform, reliable as heck & easy to use yet also very powerful.

9. I want an easy to use, easy to understand, reliable software that doesn’t cost heaps as eRecord replacement. What can you recommend?

Look at your purpose before choosing the technology. Learn to understand what you need to get done with this basic bookkeeping checklist and see how you can benefit from using an electronic bookkeeping solution like Cashflow Manager.

10. What about online accounting software? Can it be a great eRecord replacement?

It can be a great e-Record replacement if you are familiar with web technology, and willing to pay extra for the ongoing cost. For those who feel like having 100% control of their small business accounting data and enjoy unlimited invoicing and bank reconciliation, you can take a look at Cashflow Manager small business accounting software as a viable alternative to e-Record for only $41 a month with a 3-year cost of ownership, which is far more affordable than online accounting software in the market.

You didn’t answer my question. How come?

This FAQ was written to inform you that the best cashbook software that I would recommend for small businesses is Cashflow Manager after years of testing all the bookkeeping software in the Australia market on behalf of my accounting clients.  If you think I can help you with your eRecord replacement questions, you can leave your comments at SmallBusinessLog.com.

Prefer to understand the e-Record alternative choice from an accountant or small business bookkeeper point of view? Visit e-recordreplacement.com.au today!

Ready to make the switch to Cashflow Manager? Get your free copy today!

Choosing the right accounting software package is a daunting process for any business. Gone are the days of manual accounting, shoeboxes full of receipts and tripping off to the accountant with a carrier bag full of the year’s paperwork.

The regulatory environment has contributed to the growth of the accounting software industry, with more and more packages becoming available. But this abundance is a double-edged sword – it gives you improved options but makes the right choice even more difficult.

To make the process simpler, here are the key points to keep in mind when choosing the right accounting software package for your business.

Know your requirements

First of all, decide exactly what you want from the product – not only now, but also in the future.

Make sure you have a detailed understanding of key business processes, business locations and anticipated software licensing requirements.

Then take into account the likely developments in your business over the next five years or so. The more detailed and accurate your requirements, the less likely the need for costly and time-consuming changes to your accounting software.

Knowing the likely changes lets you evaluate package expansion options at the time of your initial purchase. For example, knowing that you may have to add a payroll module when employees are hired.

An important subset of this area is understanding the reporting requirements for the business. Do you just want standard reporting facilities, or are there specific additional reports that you require to run the business?

For cost, time and ease of setting up, the key is to select a package in which most reporting requirements are standard inclusions. For the other reporting requirements, it is imperative you ensure the software provider is able to produce these additional reports and supplies cost estimations for these services.

Not all accounting packages are easily modified, and if changes have to be made they often come at a high cost. Buyers beware.

Cashflow Manager offers ALL the necessary cashbook features for Australian small business owners. You can choose the one that fits your requirement. Most buyers start with Cashflow Manager and Wages Manager, before upgrading it to Cashflow Manager GOLD. Do consult the RIGHT accountant before making your purchase.

Ensure compatibility – inside and out

Compatibility is doubly important – both internally, and with your external accountant.

When examining internal compatibility, the accounting software chosen should be compatible with existing software applications that either import data into the accounting package or export data from the package for further manipulation (for example, spreadsheets). This will enhance your business efficiency.

Business efficiency and reduced costs are also why you should liaise with your business’s external accountant.

Depending upon the services provided by the external accountant, it may be beneficial to both parties for the selected package to be compatible with the external accountant’s software. This will enable increased efficiency that may translate to lower accounting fees and improved service on critical business matters. In addition, some accounting practices have purchasing arrangements with accounting software package providers that may be beneficial to the business.

Your accountant can export your Cashflow Manager information into their preferred general ledger program or small business accounting software to save you time and money. If your business size and your accounting skills outgrow Cashflow Manager, you can always switch to a more complex double entry bookkeeping software or stick to Cashflow Manager.

Ensure tax compliance

The selected accounting software package should enable management to easily adhere to all the business’s tax compliance matters, for example GST, Pay As You Go, Fringe Benefits Tax and Income Tax. An easy reference to tax-compliant software is available on the Australian Taxation Office’s website.

It is also advisable to check with the business’s accountant, be they internal or external, to ensure the accounting software package will cover all necessary tax codes and has the reporting facilities to easily provide tax compliance information.

When you use Cashflow Manager, you can ask your accountant for the name of their general ledger system plus a list of ‘Account Codes’ for all your columns. You can do this later through the Tools/Options menu.

Know your skill level

It’s important to take into account your computer literacy and accounting knowledge, although this is less essential if an internal accountant or bookkeeper is preparing the financial data.

If this is not the case, you should assess the skills of the employees who will be interacting with the accounting software package and aim for a suitable match. Some packages are less user friendly than others and assume a certain level of accounting knowledge. If there is a mismatch, the financial data mess that may arise will be detrimental in terms of money and time. Again, buyers beware.

This is why Cashflow Manager is a better electronic cashbook in comparison to complex double entry bookkeeping software in the market because it’s JUST plain simple and practical!

Consider IT infrastructure

Does your business have the existing IT infrastructure to support the accounting software packages being considered?

Although it would be detrimental to limit choices to packages that could be currently supported, you need to assess the cost of upgrading your existing IT infrastructure against the benefits that may be obtained across the business. But you should not upgrade the company’s IT skills solely to support an accounting package.

Essentially, you only take a few days to master Cashflow Manager and run it as a Windows user. Even someone who has limited computer skills get it!

Check out their reputation

There is no point investing money in a product if the company that makes it isn’t going to be around in a year or the product quickly becomes obsolete.

Make sure you thoroughly investigate the accounting software provider. As part of this investigation, determine the provider’s history, financial status, reputation, service offerings (including installation, support and training, service area, cost) and warranty provisions.

In addition, check the product’s current status to ensure the provider has no plans to supersede it. And also ensure the provider offers regular upgrades to the accounting software package for tax, accounting standards, corporations law and IT infrastructure changes.

Cashflow Manager was introduced in 1996, and has since sold over 120,000 copies in Australia alone. It is recently voted by PC User as the ‘Best Cashbook Accounting Software 2010′. You can read the Cashflow Manager story to find out more!

Mistakes to avoid

Clayton Oates of QA Business goes further and recommends a key list of things not to do:

* don’t rush into a decision
* don’t overcomplicate the process
* don’t select an accounting software provider who fails to understand your business and the questions you ask
* don’t shortcut the due diligence process of following up on referrals provided by the software provider
* don’t underbudget the total cost of ownership
* don’t have #ff0000 internal and external installation, running and maintenance relationship responsibilities
* don’t consider the process complete once the software is installed, running and a maintenance regime has been activated. Your business will change over time. This translates to new possible opportunities for the accounting software package to be utilised in different ways, affecting business efficiency and improvements.

Good luck with your purchasing decision!