ICAEW Accreditation Scheme. Financial Accounting Software Evaluation. Sage UK Ltd

Transcription

1 ICAEW Accreditation Scheme Financial Accounting Software Evaluation Sage UK Ltd Sage 50 Accounts Professional (Incorporating Sage 50 Accounts and Sage 50 Accounts Plus) (You can include your logo here) Evaluation carried out by: IT Evaluation Services Date completed: 16 th October 2007 Signed: ICAEW Version (c)

2 Table of Contents 1 Summary Approach to evaluation Matters to consider before purchase Evaluation conclusion Security and continuity of processing Input of transactions File maintenance Processing Performance of requisite accounting functions Reports Value Added Tax Currency Sales Order Processing and Invoice Production Purchase Order Processing Stock Control User Documentation Efficiency Integration and www facilities Support and maintenance ICAEW Version (c)

3 1 Summary 1.1 Introduction The suitability of accounting software for each particular user will always be dependent upon that user's individual requirements. These requirements should therefore always be fully considered before software is acquired. The quality of the software developers or suppliers should also be considered at the onset. 1.2 Fundamentally, good accounting software should: Be capable of supporting the accounting functions for which it was designed. Provide facilities to ensure the completeness, accuracy, confidentiality and continued integrity of these accounting functions. Be effectively supported and maintained. It is also desirable that good accounting software should: Be easy to learn, understand and operate. Make best practical use of available resources. Accommodate limited changes to reflect specific user requirements. It is essential, when software is implemented, for appropriate support and training to be available. 2 Approach to evaluation 2.1 Objective To evaluate Sage 50 Professional version 2008 against a set of criteria developed by the ICAEW to ensure that the software meets the requirements of Good Accounting Software, as laid down in the summary. 2.2 Approach and Work performed In order to effectively evaluate Sage 50 Professional version 2008, a product specialist from Sage completed the detailed questionnaire and provided it to the evaluator to examine. The evaluator then visited the Sage office in Newcastle and in conjunction with the operation of the various aspects of the software assisted by a member of Sage s technical staff checked the answers to confirm their validity. The questions were individually reviewed and commented on and the majority of assessments were confirmed. The evaluator discussed the assessments with a member of Sage staff in order to clarify certain points. In the event of disagreement between Sage and the evaluator, the evaluator's decision was taken as final and the response changed accordingly. Sage 50 Professional version 2008 was used throughout the evaluation. The evaluation covered the fully integrated sales, purchase and general ledgers and where appropriate sales order processing, sales invoicing, purchase order processing and stock software, separate reports have not been prepared for each ledger. Instead a 3

4 composite report has been prepared with references made to the appropriate ledger as necessary. The fixed asset and CIS functionality has not been reviewed in this evaluation. When the evaluation had been completed, the responses were completed by the evaluator and a draft copy sent to Sage and the ICAEW for review before completion of the final report. 2.3 Software/hardware utilised HP Compaq portable with Pentium 4 2.6KHz processor, 1.8M RAM and 27Gb disk running under Windows 2000 Professional. 2.4 Report structure The report has been broken down into its main constituents in the contents page. The evaluation questionnaire was provided by the ICAEW and has been used without alteration or amendment. 3 Matters to consider before purchase 3.1 General overview Sage offer a range of financial solutions suitable for self employed, professional, sole traders or owners, bookkeepers or accountants working for growing businesses through to financial directors of large organisations. Sage 50 Professional is aimed at SMEs using between 1 to 10 terminals. The Sage 50 range consists of Accounts, Accounts Plus and Professional (formally called Financial Controller). Some of the main differences between the versions are shown below: Feature Accounts Accounts Plus Professional Sales Order Processing Invoicing only Invoicing only Purchase Processing Order Fixed Assets Multi-currency Multiple delivery addresses Quantity/invoice value discounts Projects S/L & P/L contras Prepayments/accruals Company consolidation S/L & P/L contact details Price lists Cheques printed Proforma invoices Full stock levels Price lists Bill of materials Multi user Multi company 4

5 3.2 Supplier background Headquartered in Newcastle upon Tyne, Sage (UK) Limited is a subsidiary of The Sage Group plc, a leading supplier of business management software and services to 5.4 million customers world-wide. From start-ups to larger organisations, Sage makes it easier for companies to manage their business processes. Formed in 1981, the Group was floated on the stock exchange in 1989 and now employs 13,000 people in its market leading companies world-wide. Working with its community of UK accountants, business partners, developers, banks and retailers, Sage is exclusively focused on providing UK businesses in all sectors with specific, scalable software and services to help them manage their finances, their people, their customers, their suppliers, their core operations and to plan their future business success. In the UK alone, Sage employs over 1600 people and provides software and services to over 700,000 small and medium-sized businesses. 3.3 Product background and Suitability for user Sage Line 50 Professional version 2008 is available as single user or multi-user versions for up to 10 users. The Accountant Plus and Accountant versions are only available for 1 or 2 users. The product is sold as a full system of financials and commercials and includes bill of materials and fixed assets (not in the Accountant version). These later two areas were not covered in this evaluation. 3.4 Typical implementation Sole trader or small business with between 50 and 100 employees. 3.5 Vertical applications Payroll, Job Costing, Forecast reporting and third party applications. 3.6 Software and hardware specifications Development environment C++ and C++ (reporting) Server platforms Windows 2000 and Databases Flat File Operating software Windows 2000, 2003, XP, Vista Protocols Standard TCP/IP is utilised to communicate between the clients and the server. 5

6 3.6.6 Minimum client PC specification An IBM compatible computer with a 1Ghz (or equivalent) processor (2Ghz recommended) 512MB RAM (at least 1GB recommended) 400MB of free disk after Microsoft Windows has been installed (at least 600MB recommended) Windows 2000, Windows Server 2003, Windows XP (recommended) or Windows Vista. Network users only: 100Mpbs network with Microsoft Windows networking (1Gpbs network cards and switches recommended) Works with Office 2000 and later editions Support and maintenance Comprehensive support is provided by both Sage and its Business Partners. Training is provided at Sage training centre throughout the UK and two levels of support are offered. Sage Cover includes telephone and support together with regular newsletters and Sage Cover Extra also includes Sage business advice services and the latest feature upgrades. 3.7 Software installation and support Sage Line 50 products are sold direct by Sage, through retail outlets such as PC World and Staples, via Accountants, and through Business Partners who resell Sage products. Installation can either be conducted by the user with help from the Getting Started guide or by a Business Partner or accountant (over 8,000 accounting practices are members of the Sage Accountants Club). 3.8 Partner network and related accreditation process Sage s most important distribution channel is through their Business Partners and they have built up a worldwide network of 20,000 active Business Partners, over 3,000 of which are based in the UK. Sage reseller partners are able to visit customers onsite, to discuss their needs, to recommend the most appropriate Sage package, to install and configure the software, and then to provide training and after-sales support. The Partner network consists of Accountants and VARs, (many of whom have undergone training and examination to become accredited suppliers). 3.9 Limitations for Sage 50 Professional (note also differences in Accounts and Accounts Plus versions) Passwords are optional and are not encrypted reports on master file changes report on user access levels batch control totals Unable to restore data once archived but it can be reported upon Changes to standing data not logged purchase invoice register but has batch input 6

7 controls for overriding discounts or accepting settlement discounts Budgets only for general ledger accounts Transaction cross-references on screen only not reports aged stock or aged unallocated cash in sales and purchase ledgers Reports do not show partial payments or allocations Trial balance does not show carried and brought forward Duplicate documents not identified as copies Duplicate sales invoices / credits and purchase orders may not be an exact replica of the original if there are subsequent changes to the standing data VAT or stock order discrepancies reported EC country codes not shown on invoices Special VAT schemes not specifically handled checks for duplicate posting on EC Sales List Multi-currency only in sales and purchase ledger Only base or single currency per sales or purchase account previous exchange rates held scheduled orders handled SOP order confirmation documents produced alternative stock items automatic forward order handling web orders Single location stock Only one supplier can be allocated per stock item back to back ordering maximum stock levels or reorder times batch or serial number processing variations to standard packs of products tracking of orders by date 4 Evaluation conclusion There were no areas in the evaluation that gave concern. Sage 50 Professional version 2008 is a well designed accounting package that has been competently written and is supported by Sage (UK) Ltd directly. The combined ledger design incorporating Sales Ledger, Purchase Ledger and General Ledger gives flexibility and accuracy with a facility to printout complete audit trails and reports as required. In terms of the functionality that is present in the current version and the target market for this product, the product has been adequately specified. The system provides multi-currency in the Professional version by holding all transactions in base as well as the foreign currency in the sales and purchase ledgers. It is easy to use and learn and very flexible in its approach, with customisable parameters and tables and with the ability for users to develop new reports. Disclaimer Any organisation considering the purchase of Sage 50 Accounting range version 2008 should consider their requirements in the light of proposals from Sage or its dealers and potential suppliers of other similarly specified products. Whilst the contents of this document are presented in good faith, ICAEW cannot accept liability for actions taken as a result of comments made herein. 7

8 5 Security and continuity of processing 5.1 What security features are included to control access to the application? User Accounts and Passwords 5.2 Within the software application how is access controlled at: Menu level (ledger)? Function level (sub ledgers)? Field level? 5.3 Passwords Is access to the software controlled by password? Does this apply to single user systems? Please state the basis of control available (e.g., role based etc) If there is no password facility please state how confidentiality and accessibility control can be maintained within the software? Are single user systems access controlled by password? Does the software allow for each user to have separate log on (user ids)? If : How is does the software track user activity? Is each user required to have a personal password? optional Comes with user name but no password User based Passwords can be set up optional N/A optional 8

9 5.3.7 Are passwords one-way encrypted? [i.e. Is it impossible for anyone to see other user s passwords in the software] Is password complexity available at application level? Is : Please specify [e.g. Number of digits, requirement for special characters, numeric, upper/lower case etc.] Is there a facility to enforce password changes after a chosen period of time? Is there a facility to specify a minimum age for passwords (e.g. 1 day)? How many previous passwords are retained by the system to limit users recycling passwords (e.g. 24 or 32) only system supervisor can see other passwords control any or no password is accepted N/A ne 5.4 Please state how security allows for access to be specified separately for : Read? See above Read and write? See above Delete and amend? See above Access to area of program not specific to Read / Read & Write. 5.5 Can the menus be tailored so that an individual user can only see those functions they are authorised to access? automatically by the program If is the tailoring by:- 9

10 5.5.1 Software house? Educated user? Functions with no access automatically excluded 5.6 How does the software control changes to master files? 5.7 Does the software provide specific levels of password control to authorise master file amendments? 5.8 Is it impossible to delete a software generated transaction? File locking writes unlocks and access controls, but new transactions generated 5.9 Please specify the specific security procedures (by passwords or warnings) over the: Update of ledgers Access based on user name Closing of accounting Open periods no formal close periods Deletion of transactions Access based on user name Archiving of transactions. Access based on user name only at year end 5.10 How are deletions controlled by the system? 5.11 Are deleted transactions retained in the audit trail and denoted as such? M 5.12 Can a report be produced detailing all current users and their authority levels and/or access rights? 5.13 Is the level of security (described with this section) appropriate for the expected size of business using the software? Marked as deleted and displayed in red VAT received are reversed - retained and displayed in red 10

11 5.14 Is there a clear indication in the software or manuals as to how the data is: Backed-up? Recovered? 5.15 Back ups How are back ups provided: Within the software application? Within the operating software? Both Are backup procedures automatic? Is the user forced or prompted to back-up at certain intervals? Prompted Can the intervals be customised? 5.16 Recovery Please state how the Restore backup software facilitates recovery procedures in the event of software failure? (E.g. roll back to the last completed transaction) If software failure occurs Re-input the batch part way through a batch or transaction, will the operator have to re-input the batch or only the transaction being input at the time of the failure? Are these automated? Do the recovery procedures work? 11

12 5.17 What features are available within the software to help track down processing problems? Checkdata routines 5.18 Are software messages clear? 5.19 Are user responses properly structured to ensure that erroneous key strikes do not lead to inappropriate actions? 5.20 I s there a software log which details: Error messages? Security violations? 5.21 Audit trail Does the software have a detailed audit trail? M Is it impossible to turn off or delete the audit trail? M Are all master file changes recorded in the audit trail? Does each change have a system generated reference allocated? Are the originator and Can clear down audit trail of fully completed transactions to particular date at year-end but transactions go into audit history file and then to audit archive file where they can still be printed. System prompts to print transactional reports before clearing the audit trail but does not enforce it. - event log shows when a change has been made but not the actual change N/A N/A 12

13 authoriser identified? Are all standing data changes recorded in the audit trail? Does each change have a system generated reference allocated? Are the originator and authoriser identified? Is all input data included within the audit trail, including amendments, deletions, journals etc? Does the software allocate a system generated unique reference number to each transaction? Is this stamped with a user id? Is this unique reference number presented to the user at time of input? Is the transaction date and time stamped? Are all imported /interfaced transactions allocated a software generated reference number? How are transactions differentiated within the audit trail? transactions only N/A N/A all transactions Date but not time Unique ID and transaction type 5.22 What are the procedures for handling dates? (E.g. 2 digit years, 4 digit years) In the case of two digits what is the break point for 4 digit years N/A 13

14 the century? Are dates handled consistently throughout the software? 14

15 6 Input of transactions The following sections in Input of transactions, File maintenance, Processing and Reports are primarily aimed at the three main accounting ledgers and where applicable Sales Order Processing, Sales Invoicing, Purchase Order Processing and Stock Control. 6.1 Is data input controlled by selfexplanatory menu options? plus workflow 6.2 Are these menus applicationspecific? 6.3 Does the software provide input validation checks such as account code validation, reasonableness (limits, VAT or discount checking) and validity checks (VAT check-digit calculations)? Validation but no reasonableness checks 6.4 Can the user amend data on an input screen prior to update? 6.5 What control features are within the software to ensure completeness and accuracy of data input? 6.6 Are all input transactions subject to this control? 6.7 How does the software ensure uniqueness of the input transactions? (i.e. to avoid duplicate transactions) 6.8 Does the software allow for batch control totals? If : Are batches automatically numbered? Are batches forced to balance before ledger update? Validation prior to posting dependant on action performed. All Checks in Audit Assistant and unique transaction ID N/A N/A 15

16 6.8.3 Does the software allow the temporary halting of input of a batch to allow for queries or other activities to take priority (e.g. set up a new account) Is the user forced to confirm batch totals? 6.9 Is attempted posting of unbalanced journals rejected? (G/L) Are input errors highlighted? 6.11 If are they: Rejected and reported on screen? Rejected and error reports generated? Accepted and posted to suspense? 6.12 Does the software have an automatic facility to correct/reverse/delete transactions? If : Are all the double entry transactions documented in the audit trail? M 6.13 What are the controls to ensure the internal integrity of the ledger(s) or the accounting information, e.g., control of accounts Is it possible to allocate input values directly to ledger control accounts? N/A Can t delete accounts with transactions, use of Checkdata routines Date verification on transaction post but warnings are given 16

17 If : Please note the mechanisms available to allow the user to establish why the total balances on individual accounts do not agree to a respective control account? 6.15 Can automatic accruals or prepayments be generated? Day books, Checkdata 6.16 Will these automatically be reversed after the period end? (G/L) 6.17 Does the software have a purchase invoice register? At the end of accrual period, but has batch invoice entry 6.18 If are the values shown as entries within: Purchase ledger? VAT form 100? 6.19 Does the software permit multi debit/credit journals? 6.20 How are transactions identified on screen/reports as to: Type? Debit or credit? 6.21 Can separate nominal analysis codes be input for each invoice line? If : Does this cover: Sales ledger? Purchase ledger? Stock? After posting After posting 17

18 6.23 Can receipts and payments be matched to specific invoices? If :- Is this Automatic? Manual? Either? 6.24 Will the software permit part payments? 6.25 Will the software allow: Payments to be made to customers? Receipts to be received from suppliers? 6.26 Does the software handle purchase credit notes? 6.27 Is there an ability to automatically amend stock if applicable? 6.28 Can the software generate sales credit notes? 6.29 Does the software handle discounts and promotions? 6.30 Does the software provide for early settlement discounts? 6.31 Can early settlement discounts be automatically generated? 6.32 Are there controls over accepting settlement discounts (e.g. time limits)? 6.33 Is VAT treated correctly on early settlement discounts? 18

19 6.34 Will the software permit the posting of unallocated cash to the ledgers? Does this apply to: Sales ledger? Purchase ledger? 6.35 Are unallocated cash/credit notes specifically reported for follow up? 6.36 Are outstanding transactions displayed for allocation? If does this apply to: Sales ledger? Purchase ledger? 6.37 Is it possible for new accounts to be created during input? 6.38 Does this cover the following ledgers: Sales? Purchases? General? Stock? 6.39 What controls are there over the creation of new accounts? 6.40 Is the originator and/or authoriser identification logged by the software? 6.41 Is the user prevented or warned from overriding credit limits or discounts? (S/L). User access control, can t create a duplicate Originator only Option for either warn or prevent overriding credit limits but only warning for discounts 6.42 Does the software have a bank 19

20 reconciliation facility? 6.43 Does the software enable transactions to be posted to the ledgers whilst performing a bank reconciliation (e.g. standing charges, bank charges etc)? 6.44 Are these adequately reported? 6.45 Does the software accept input files from other computer packages? account details etc. but not transactions If : What formats are accepted? What controls are in place over the interface? 6.46 Does the software have a facility for calculating interest on late payments? CSV or SDO (from Sage developer) Same as user entry correct format and validation 20

21 7 File maintenance 7.1 Are ledgers: Open item? Balance forward? Either? 7.2 Does the above cover: Sales ledger? Purchase ledger? General ledger? 7.3 Is a month end routine required to be undertaken? 7.4 Is the creation or amendment of standing data (e.g. customer account details) controlled by menu options? 7.5 Are menus: Application specific? User specific? Both? 7.6 Is it impossible to delete accounts if the balance if Nil but transactions have been recorded against the code. M Does this apply to: GL? SL? PL? Stock? 7.7 Are there any other constraints over the deletion of accounts? Must have nil balance and no transactions on audit or stock files. 21

22 7.8 What is the size and format of reference numbers and descriptions within: GL? SL? PL? Stock? 7.9 Is the scope of the reference number adequate to permit sufficient depth of analysis? 7.10 How does the software guard against/warn about, duplicate account numbers on set up? 7.11 Does the software enable the traceability - from, to and through the accounting records - of any source document or interfaced transaction? Explain how this is achieved Can reports be invoked which identify all the fields which have been modified? Ref = 30 Alphanumeric Desc = 60 Alphanumeric As above As above As above As above Cannot create duplicates Via transaction drill down in activity 7.13 Can the reports show a complete record of all master file changes? 22

23 7.14 If the software uses a lot of standing information which changes frequently or regularly, does the software allow for such changes to be effected through the use of parameters or tables? If : Is the use of such parameters or tables adequately reported? 7.15 What controls are within the software over changes to parameters and tables e.g. reporting, password etc? individual settings for each area of the program. On screen optional on system log Password protection and access rights 7.16 Does the software allow selective archiving of old data on a userdefined basis? 7.17 Can archived data be used for reporting purposes? 7.18 Does the software allow for the restoration of achieved data for audit without affecting current accounting data? 7.19 What controls are in place over the handling of archived data? At year end Held as a read only archive company 23

24 8 Processing 8.1 Does the software ensure that menu options or programs are executed in the correct sequence (e.g. ensure outstanding transactions are processed before month end procedures run)? 8.2 After an external document (e.g. sales invoice or cheque payment) has been generated and posted to the accounts is it impossible to amend this data? M 8.3 Is there an audit trail of all changes to transactions which have updated the ledgers? 8.4 Can the software calculate prices or values by reference to master file data? 8.5 Does the software provide automatic recalculation, where appropriate, of data input? (e.g. VAT) 8.6 Does the software warn the user when the ledger is out of balance? 8.7 How is this done e.g. when the software is switching on or on ledger update? - but guidance given can only change text fields but all other amendments create new transactions generated transactions added to audit trail Checkdata routine 24

25 9 Performance of requisite accounting functions 9.1 What control features are provided by the software to support effective user controls? 9.2 Is there: Transaction sequencing? Automatic dating of posting transactions? Identification of user id or source of document? 9.3 Is the software available as: Single user? Multi user? 9.4 Can the same function be used by more than one person at the same time, whilst still retaining the separate user identities? 9.5 Is the software available as multicompany? If :- How many companies are supported? 9.6 Is a group consolidation facility available? 9.7 Can the software consolidate entities with different charts of accounts? Wizards, Checklists, Process Maps Unlimited, but must be in same general format but additional codes allowed in subsidiary companies 9.8 How many levels of nominal analysis can be handled by the software? 3 plus departments and projects 25

26 9.9 How does the software handle cost centres, departments, divisions? 9.10 How many accounting periods can be set up? Can allocate a department to a cost and if using project costing add Project and Cost Control set periods 9.11 Can the length/ number of periods be adjusted to suit different user requirements? 9.12 How many accounting periods can be open at any one time? 9.13 How many years can be open at any one time? 9.14 Can a period or year be re-opened after it has been closed? If what controls are in place over this function? 9.15 Can data from all accounting periods be accessed at any given moment? All All period closure N/A 9.16 Can previous months be accessed for enquiries or reports? 9.17 Does the software handle posting date as well as document date? If : How are transactions analysed, by Posting date? or Document data? 9.19 How are periods handled by the software? Only on maintenance routine Doesn t use closed period accounting, warnings given for transactions outside the financial year 26

27 9.20 Are the ends of accounting periods determined by the user or set by the software? User 9.21 Does the software allow posting to more than one accounting period at a time? 9.22 Does this cover: General ledger? Sales ledger? Purchase ledger? 9.23 Is it possible to allocate transactions to: Future periods? Previous closed periods? A previously closed year? If : What controls are in place e.g. level of authorisation and on screen warnings? Will the software revise subsequent periods accordingly? 9.24 How will transactions outside the current period be: Reported Accounted for in the VAT return? 9.25 Does the software permit use of budgets and provide comparisons between budgets and actuals? If :- How many versions of budgets/forecasts can be maintained on the system? all ledgers warnings are given where the transaction is outside the financial year of if the allocation date is prior to the document date Warnings t previous year Date sensitive reports, Prior period un-reconciled VAT transactions are picked up in the next VAT return 3 levels of budgeting Overview, minal Code & Department 27

28 9.26 Are budgets available for: General ledger? Sales ledger? Purchase ledger? Overheads? Balance sheet? 9.27 Can budgets be set by: Period? Annually? 9.28 Can the software automatically generate budgets? If :- Please state how this is achieved. when running year end Taken from last year actuals or budgets with +/- % change 9.29 What is the maximum value of transactions and of totals that can be handled by the software? 9(9) What is the maximum number of transactions that can be handled by the software? 9.31 What is the maximum number of accounts on each ledger: Sales ledger? Purchase ledger? General ledger? Unlimited Unlimited Unlimited Unlimited 28

29 10 Reports 10.1 Are all reports adequately titled and dated? (E.g. report name, client name, data, period, batch, last entry number, period end, pages, numbers etc.) 10.2 Do the reports provide totals where applicable? 10.3 Are these totals calculated or taken from a control file? Please state the reports that do not feature calculated totals Is it clear when the report has ended? (totals or end markers) 10.5 Can reports be saved in electronic format (as distinct from just printing)? 10.6 Are such files adequately protected from deletion or amendment? 10.7 Is a report writer provided as part of the software or as an add on? Please state the name of any third party package What level of knowledge is required to use the report writer e.g. beginner, regular user, expert? 10.9 Can the report writer make use of user-defined fields (including external fields)? Depends on report List of accounts and other lists with option to switch off, but can be reproduced Part of software Regular User user defined but not external 29

30 10.10 Does the report writer cover all ledgers (transactions) files and balances (all value fields e.g. prior year etc.)? Can users define the parameters or selection criteria used on reports reported? Are standard reports always produced, even when they are nil returns? Is there an option for reports to exclude nil balances? Can screen layouts, reports and transaction formats be easily adapted to users requirements? Can a hard copy be produced of all screen enquiries? Can transaction files for all previous periods of the year be retained in the software to permit enquiries and reports? Are reports of all master file changes automatically generated or stored for later printing? Are all transactions on all reports individually identifiable? Do the reports show whether items are debit or credit? Do they give sufficient narrative and coding to enable cross referencing? Some e.g. VAT Return others give no info message. Reports yes Screens limited changes Transactions - no Cross reference only on screen enquiries 30

31 10.21 Can the software produce all requisite reports: Day books Trial balance Profit and loss account Balance sheet Aged debtors Aged creditors Aged stock Aged unallocated cash (debtors) Aged unallocated cash (creditors) Budgets Cash flow statement VAT reports VAT form EC Sales Listings Intrastat returns (SSD) Are the above reports standard within the software or do they have to be written? Is the age criteria fixed or user definable? Can the analysis reports be in summary and detail? Do standard reporting options give sufficient flexibility to tailor individual reports? Standard and can be user customised to some extent Definable 4 periods Either Can all reports be reproduced after the period end the month end date: Transaction listings? Day books? Trial balance? 31

32 10.27 Is it possible to print out retrospective month end aged sales and purchase ledger reports that agree back to the month end trial balance control account figures as at the month end? Do the standard budget reports provide sufficient analysis of variances? Do such reports provide exception reporting, percentage analysis and comparatives? Do standard reports show sufficient analysis of trading results? (E.g. sales analysis by region)? Are all movements during each accounting period shown on ledger detail reports? Do these reports show how all partial payments or allocations (unallocated cash) have been treated? Does the trial balance report show balances carried and brought forward and detailed posted transactions? but percentage and actual comparatives in separate reports Can the management accounts, profit and loss account and balance sheet be sufficiently analysed by: Project/job Cost centres Department Division Company Each company in separate file 32

33 Group (if applicable) After consolidation Can the above be user defined by Period/ range? What controls are there in place so that the user is aware of partly processed transactions: Unposted invoices Uninvoiced dispatches Payments Receipts State the controls that are in place to ensure that the correct price/discount has been applied to invoices/credit notes? (e.g. Gross Margin reports) Detail all automatically generated documents for external use. (E.g. sales invoices and statements, remittance advices.) Can the software reproduce source documents? Please list documents. Invoices have status clearly displayed in sales invoice list Dispatch creates invoice t possible only unallocated t possible only unallocated Profit option on invoice and invoice profit report Sales Invoices / Credits Purchase Orders Statements Remittance Advices VAT 100 Cheques Delivery tes Sales Invoices / Credits Purchase Orders VAT 100 Delivery tes Are the duplicates an exact replica of the relevant financial and VAT accounting information as stored on original documents [i.e. they do not take account of any subsequent changes to the standing data? Most yes, sales invoices / credits and purchase orders - no 33

34 10.42 Are these clearly identified as duplicates? Does the software force the production of month-end reports? Can the reporting function make use of external data files? Does the report writer have the facility to scroll up and down when output to screen? Can all reports be run without the need for period-end procedures to be initiated? Does the report writer allow print previews of all reports? Can transactions and standing data be output directly to other formats e.g. CSV, txt etc. for any period of time required? formats PDF, HTML, RTF, XLS, TXT, CSV, BMP and 34

35 11 Value Added Tax The following sections detail the general requirements/features of an accounting package in handling VAT. It cannot cover all eventualities or all users and where necessary members should contact their local HMRC office for detailed guidance. The overall objective is to accurately record the accounting for VAT in order to support VAT returns to HMRC. Software features 11.1 Does the software have the facility to hold the following VAT information: UK VAT registration for user company number? Intrastat code? per stock item EC Code? EC VAT registration per customer/supplier numbers (10)? VAT rates (please specify number available) How does the software handle roundings? Rounds to 2 decimal places 11.3 Is this applied consistently? 11.4 Does the software handle VAT Scale charges with automatic double entry processing? 11.5 Does the software handle VAT calculation tolerances? If do any discrepancies produce: Warning? only after posting Checked in Audit Assistant & Item VAT amendable 35

36 Appear in the audit trail Appear in the VAT exception report? 11.6 What security features (password/ audit trail) are in place to control changes made to: General ledger VAT control accounts? VAT tables set up and change? Tolerance levels? Invoice sales number table? Changes on VAT code on customer files? Changes on VAT code on stock files? VAT calculated on sales invoices or credit notes? 11.7 Does the software store and report a VAT return identifier [VRI]? 11.8 How does the software ensure that that each eligible posting is reported only once in a VAT return? Method of operation Warning on posting to control account & access rights Access rights ne Access rights Access rights to customer record Access rights to stock record Item VAT amendable by all or can be set to non amend Once reported on has a VAT reconciled flag 11.9 VAT basis. Can the software handle: Invoice (standard) accounting? Cash accounting? If the software can handle 36

37 both invoice (standard) and cash methods of accounting for VAT is the basis clearly identified during set up? Does the software allow for a switching between methods? If :- Is the change full supported by audit trails to ensure proper VAT treatment of all transactions? Is this ability to change a basis of accounting clearly flagged, i.e. users warned etc Does the software alert the user that they require HMRC authorisation if they attempt to apply, retrospectively, the Cash Accounting Scheme for VAT accounting? Does the software provide useful and relevant information on switching in the software help section? can t change with transactions not VAT received. Manual changes also needed Sage claim that this is not required any more Can the software handle the following VAT schemes: Annual accounting but work around article scheme? available Flat rate scheme? but work around article available Retail schemes? but work around article 37

38 Account for VAT on the margin? Can the software be configured to handle partial exemption methods? available but work around article available but work around article available Please state the number of VAT codes available for VAT analysis How does the software handle: Outside scope? Distance selling (supply to an unregistered EC customer)? How the software handle EC VAT:- Has a set VAT code T9 User to set up a new tax code Goods and related service? Specific pre allocated tax codes (T4, T7 & T8) Services only? Work around article available for purchases EC Services which fall within the reverse charge Process? As above Triangulation? EC Sales list Does the software include the functionality to identify EU acquisitions? Tax code T7 & T8 38

39 If : Can the software generate acquisition tax? Accounts for notional VAT on taxable goods Can a report be generated of all EU acquisitions and the amounts of acquisition tax generated? Does the software include the functionality to identify transactions liable to reverse charge VAT? If : Can the software generate reverse charge VAT? Can a report be generated of all transactions liable to reverse charge VAT, and the amounts of tax where so generated? Does the software have a facility to reconcile the VAT returns amounts for input, output and net VAT payable/recoverable to the General ledger control account? How does the software handle late transactions posted outside the closed VAT return period? Input VAT (purchases) Can the software handle VAT inclusive amounts and automatically calculate the input VAT? Report available, based on VAT codes Posted to next VAT return but the user has option to include/exclude F9 calculate net 39

40 11.26 Does the software require the following to be entered: Supplier reference? Supplier document Optional reference? Internal document Optional reference? Invoice tax point Mandatory date? Invoice posting document date period date? Invoice gross total? - optional Invoice VAT Calculated from net but amount? amendable (if switched on) Individual invoice lines: net amount VAT rate (optional from VAT code, product supplier) VAT code only Does the software validate individual invoice line VAT amounts against the total invoice of VAT (less early settlement at discount) and accept or reject the amount subject to the software tolerance? Can the user override the software derived input VAT amount and input VAT as shown on the supplier invoice? tolerances on entry but can be checked later with Audit Assistant user can optionally override VAT amounts. VAT amounts on purchase invoices are always amendable 40

41 11.29 Does the software allow VAT to be reclaimed on the basis of registered but unposted invoices? If : Does the software flag the status as: VAT not yet reclaimed? N/A VAT claimed? N/A Output VAT (sales) Does the software generate sales invoices? If : For each invoice generated is the following information included on the sales invoice:- M Unique software generated invoice reference Your name, address, EC country code and VAT number? Name, address, EC country code and VAT number The time of supply (tax point) Date of issue (if different to the time of supply) Your customer s name (or trading name) and address, EC country code and VAT number (if applicable), but not the EC country code As above but not the EC country code 41

42 The unit price [applies to countable goods or services. E.g. an hourly rate; or a price for standard services.] A description which identifies the goods or services supplied Does the software identify supplies that are zero-rated or exempt on an invoice and that there is no VAT payable? Is this by way of a report? on the invoice Does the software handle Proforma invoices? If : Are the invoices clearly identified as this is not a tax invoice? M VAT Reporting Does the software produce a VAT 100 form as standard? If : Does the software have a means of producing reports that support the completion of the VAT return? 42

43 11.39 Is the VAT return information available by report on a three monthly basis or any other specified period? Any specified period Is there a detailed and summary analysis of all transactions included in each return sorted by VAT code and transaction type making up the total in each of the boxes on the VAT 100 Form? Can the VAT return be recreated showing all the transactions which were included in the original VAT return? Does the software have a separate VAT audit log? recall VAT ledger, list of all VAT transactions te where the software details the following non routine event in the audit trail or VAT audit log etc: Changes to VAT tables. Optional in system log Change from Optional in system log invoice/cash VAT accounting or other Schemes VAT tolerance. N/A Changes to VAT Optional in event log rates on customer, supplier, product master files Are the above changes noted above stamped with a: User id? 43

44 Software generated unique reference number? Date and time? Date only VAT postings Are all VAT postings recorded in the audit trail or VAT audit log? Does the software denote whether each transaction has been included in a reconciled VAT return? How does it denote which VAT Return the transaction has been included in? Audit trail and VAT ledger Gives VAT return number Does the software produce a VAT Exception report detailing such transactions as: VAT amounts outside tolerance levels? Manual changes to software generated VAT? Via Prepare for Audit Assistant function Can make adjustments to VAT report Write offs user can create report Zero value Via Audit Assistant invoices? function If for any of the above: How does the software document these occurrences? As above - user can create report 44

45 11.48 Does the software handle intra-community supply of goods? Does the software support production of an EC Sales List? If : Does the report show the country code, the customer name, their EC VAT number, the invoice reference and indicators for different types of despatches? Does the software produce invoice level reports that enable every value on each EC Sales List report to be traced to source documents? Does the software have a means of ensuring that each eligible posting on the EC Sales List is reported only once? (Please state how this is done within the software) How does the software handle triangulation? E.g. a movement of goods without a related invoice transaction. Manual checkbox within EC Sales list Does the software produce the relevant documents in a format [e.g. CSV or XML] that can be uploaded direct to the HMRC gateway? 45

46 11.55 Can these be electronically transmitted direct from the system? Does the software produce INTRASTAT reports where applicable? How are errors on VAT accounts corrected? How does the software handle the VAT on purchase and sales ledger contras? How does the software handle partially allowable expenditure, e.g. VAT on petrol invoices where employees are provided with petrol (adjustment required for own use)? Can the software handle cheque refunds to customers? If : How is the VAT accounted for under cash accounting? Can the software handle invoices with multiple rates of VAT? How does the software handle write off of bad debts and the related VAT? File Maintenance Shown as both Sale and Purchase VAT amendable or adjustments to VAT return Refund is posted against paid invoice so VAT nets out VAT to be reclaimed manually 46

47 12 Currency 12.1 Is multi-currency processing available? If : State number of currencies available Does this cover: General ledger Sales ledger Purchase ledger Stock, but foreign currency price Is conversion to sterling automatic? lists, to base currency If : Does this cover General ledger Sales ledger Purchase ledger Stock Can the user select which currency to value each of the ledgers? If : Does this cover: General ledger Sales ledger Purchase ledger Stock, set at customer / supplier level N/A N/A What are the currency capacities? What are the maximum and minimum exchange rates? 99 each customer / supplier has either a base or a foreign currency multipliers 47

48 What approach will the Software House take towards handling the EURO? Can either be the base currency or a customer / supplier currency. A conversion routine would be supplied 12.2 What currency information is held: Currency Code/description? Country?, separate country file with EU tab Currency rate table? Date rates effective fromto? Previous rates held? 12.3 Can a base currency be selected? at company creation 12.4 Can the user over ride the exchange rates during a transaction? 12.5 Can the user change the exchange rates per account? 12.6 Is there a restriction on accounts to a single selected currency? If : What controls are in place over any changes? 12.7 Can the user manually over ride the currency calculation? 12.8 Are gains or losses on currency calculations automatically processed? Currency cannot be changed once transactions exist for that customer/supplier Can change the exchange rate 48

49 12.9 Can the user over ride the calculation /processing of currency gains and losses? Only by changing the exchange rate Can a user override an exchange rate on each transaction? Can the user define the treatment of foreign exchange gains/losses i.e. where posted to in the general ledger? Can ledger accounts be defined to take invoices/payments in specified currencies/ multiple currencies? Does the software prevent the deletion of the active currency? Does the software prevent use of duplicate currency codes? Can currency transactions be entered in selected currency and/or base currency? Can transactions be entered in multiple currencies? How does the software handle exchange differences? How does the currency treat revaluations relating to: Ledgers (sales/ purchases)? Monetary assets/liabilies? General ledger accounts? Only by changing the G/L control account Specific currencies, list supplied and currencies cannot be deleted currency selected by table entry Selected currency only Single currency per customer / supplier Has wizard for user to run. Posts to control account ne ne Revaluation of bank accounts 49