First of all, let us be clear – Making Tax Digital will happen in one form or another. We have talked to several accountants who believe that the project will be scrapped due to cost, logistics or Brexit (or other political considerations), but as recently as 13th July 2018, HMRC has reiterated the current deadlines on the Government’s own website.

I think, however, what is up for debate is the eventual form that Making Tax Digital will take, the speed of its implementation and what facets of it will go live (and when). This is why I believe that Making Tax Digital is a journey, not a destination – accountants, taxpayers, and HMRC are all working towards a 21st Century approach to accounts submission and tax gathering, but the speed of technological implementation is such, don’t be surprised if MTD evolves mid-implementation.

If you think I am exaggerating, consider the recent partnership between Amazon and HMRC to use the former’s Echo devices and Alexa smart assistants to remind people about tax credits. Of course, this is at this stage more PR than process, but it has already led to headlines in the tabloid press such as “Alexa… Pay My Tax!”, which gives the impression to the general public that in the near future they will not even have to touch a keyboard (or even a touchscreen) to file their accounts with HMRC.

This is why, as a software developer, I am only looking to implement functionality to my accounting software packages as and when specified or needed by either HMRC or Accountants themselves. To do otherwise, would be costly, presumptive and potentially a waste of time, and that misspent development cost would have to be passed onto the end user… i.e. you, the accountant!

This is not meant to be a dig at other software developers or a sales pitch, but a statement of fact. It hopefully articulates an ethos that I think all concerned with Making Tax Digital would be wise to adopt, as it will result in a practical and effective adoption, and not failure or panic.

I suspect that despite my arguments above, many of you remain sceptical as to whether MTD will eventually see light of day, so let me give you another perspective. In a past life I worked in the City of London, trading energy derivative investments – buying low and selling high.  Rather than attempt the impossible task of quantifying the impact of all the world’s events on the energy markets, we would identify a small number of major influencers – the fundamentals – and base our trading decisions on the impact of only these fundamentals. Yes, this approach did risk ignoring the impact of events that we didn’t consider to be major, but it made our decision process more clear – and we were right far more often than we were wrong.  With this mindset, I think there are only three fundamentals that make MTD an inevitability:

  • the UK Government needs to lower its overheads and become more efficient generally;
  • the UK Government needs to increase its tax revenues;
  • the UK Government doesn’t want to wait nearly two years (in some cases) to be paid the tax it is owed.

Given these three factors, Making Tax Digital is the Occam’s razor to take to all these problems as far as the Government is concerned. Electronic submission of taxes will mean (in theory) the automation of tax returns, which will lower the overheads and staff requirements of HMRC (saving the Government substantial amounts of money) and demanding quarterly payments of tax owed will address the Government’s own cash-flow and revenue forecasting problems. If you think there is another way for the Government to meet the objectives I think underpin the Making Tax Digital project, I would be interested to hear them.

As I have written before, I think Making Tax Digital provides a huge opportunity for accountancy as a sector and it shouldn’t be seen as a threat. However, remaining in denial about the inevitability of MTD will lead to the failure of your practice, because the accountancy world outside is changing as I write this, and you are not. The way you currently work will soon cease to be viable, so I genuinely urge all accountants who have yet to embrace the digital revolution to do so for their own sakes, and not just for the benefit of software developers like myself.

Making Tax Digital is not immediately going to be a panacea to all of HRMC’s problems nor does it necessarily mean extinction for an older generation of accountants (if they’re proactive), but it is a journey we’re all currently on with a final destination being a hazy landmark on the distant horizon. It is a journey we’ve all undertaken (either by choice or circumstance), and it is one I am glad to be on, and one that I want to enable others to make.

For more information about Prelude, e-mail or call 0845 223 2170.


Lee Coombes has run Lee Coombes Accountancy in Swansea for the last 8 years, and he is determined to provide the most cost-effective and efficient services to his clients possible.

With the advent of Making Tax Digital, the accountancy sector as a whole has to adopt new processes and technologies to remain compliant and relevant. Lee, being a progressive accountant with his finger on pulse, addressed these changes by adopting Prelude, from Diamond Discovery.

Lee Coombes of Lee Coombes Accountancy

Prelude is a secure Cloud-based accounting software package that allows simultaneous access to accounts by accountants and their clients. It can be accessed from any device that has an internet connection and web-browser.

With so many accounting software packages out there, what was it about Prelude that made Lee sign up? “There are many things about Prelude which appealed to me, but its main appeal is the ease of use and its simplicity”, said Lee in July 2018. “It is written for ‘the man in the street’, which is very important if accountants want to encourage their clients to engage with the software too”.

Lee has adopted a range of technological processes that interact with Prelude that makes his own work easier and more time-efficient, which in turn means he has lower overheads, passing on cost-savings to his clients. This makes Lee a more attractive proposition to potential clients than his competitors, and he can do this without compromising the quality or accuracy of his work.

Lee achieves this by striking the perfect balance of what he wants his clients to undertake in terms of managing their books and what services he provides. Prelude allows for the generation of branded invoices that can be easily created by the client within the software, while Lee focus on the ‘back end’ processes of reviewing the books and consolidating the accounts.

By creating this division of labour, Lee is empowering the client to keep on top of their invoicing while simultaneously updating their accounts package in the process. Lee undertakes his own work in the background, and the two mesh seamlessly together. “By working in this way, I am minimising the chance of error in the accounts, and the client and I can review the accounts at any time” said Lee. “Not only am I saving myself the stress of ‘end of year’ tax return, it means that the client themselves will have a clear idea of their tax obligation at any given moment. It can also help clients more effectively manage their cashflow and business development”.

Lee believes that accountants spend to much time undertaking ‘repairs’ of accounts, and the process he has developed by using Prelude intelligently means that his own business is far more effective, giving him the capacity to take on more clients without increasing his own overheads.

Lee likens his use of Prelude with his clients to the a ‘dual control’ car used by driving instructors; you’re enabling the client to get the full business benefit of modern accounting software without them running the risk of doing anything too dangerous or catastrophic to their accounts. “The beauty of Prelude is that I can give the client only the functionality that they need” says Lee. “Too many other accounting packages are overloaded by features that most small businesses never use and which could potentially cause problems or confusion – Prelude is straightforward and easy to understand”.

By focusing on only what is essential, Prelude is a substantially more cost-effective software package for the accountant and their clients. “I don’t want to be paying £30 per month per client to a software package I will only ever use 10% of; Prelude is a fraction of the price yet does everything I need it to do so I can manage the accounts of my clients”

Lee also presents Prelude as his own inhouse software; all accountants who use Prelude can brand the main dashboards with their own logo and marketing material. “For all intents and purposes, the software and the service I provide is seen as one” said Lee. “Every time my clients login into the software, which they do through my website, they see my logo on the dashboard.” On a repeated basis, over time, this can only subconsciously strengthen the bond between accountant and client.

“If a client of mine uses Sage or Xero, they are repeatedly exposed to those software packages names and not mine” says Lee. “In effect, I would be selling the software rather than my skills or services, and that client could easily go off with another accountant who uses those accounting packages. By using accounting software that is branded as my own business I am reinforcing that I the accountant, and not the accounting software, is the service for which the client is buying.”

Another facet that Lee likes about Prelude is that it is built by Diamond Discovery, a software developer based in South Wales. “With Prelude, I have always received great customer service and I am always treated in a personable manner – Diamond Discovery know me and my business’ needs, and they are always on hand to help” said Lee. “I don’t think that would be my experience if I contacted a multinational manufacture of accounting software.”

Due to the personable and adaptable nature of both Prelude the software and Prelude the support team, Lee has developed processes that saves him time, stress and money. By using CSV importing features and scanned documents, Lee can process as many as 140 invoices in just half an hour.

Such an approach means that Lee is not running the risk of using tools like Automated Bank Feeds, which theoretically invalidate the client’s rights in the event of fraud: “I don’t want to be logging into clients’ bank accounts; CSV offer the same efficiencies without the risks.”

Lee also has customised his Prelude with the free Customer Relationship Management module, which allows him to keep detailed notes, reminders and other necessary information about his clients. This CRM component fully integrates with Prelude, avoiding any duplication of entry or process, and is fully GDPR compliant.

Prelude is so integral to Lee’s business model he doesn’t use or support any other accounting software package, and he charges clients substantially more if they want him to use another. “By using just the one, simple accounting software package, all my own processes – and those of my clients – are uniform and I am not incurring the additional cost and time of supporting multiple accounting packages.”

Lee thinks other accountants should use Prelude in the same way he does, as he feels HMRC’s digital agenda could result in taxpayers bypassing accountants altogether. With Prelude being so easily adapted to the Lee Coombes Accountancy brand, Lee is ensuring that his clients view his services more than just software even though it is software that enables him to offer the services that he does.

“Prelude does exactly what it sets out to do and is continually updated to meet the requirements set by HMRC and other bodies. It is cost-effective, simple to use, and provides efficiencies within my own business; what else would an accountant want from accounting software?”

For more information about Lee Coombes Accountancy, visit or call 01792 346272

For more information about Prelude, e-mail or call 0845 223 2170.

Are you GDPR ready? (Image via Shutterstock)

As of 25th May 2018, your business will have to be fully compliant with new regulation relating to how you manage and store data. This new tranche of regulation is known as GDPR (General Data Protection Regulation) and is an expansion of existing data protection laws, known in the UK as the Data Protection Act 1998.

Why is this new regulation coming into force? The initiative came from the European Union (EU), which was concerned about the use by (and security of data in) businesses, exactly what data businesses and organisations held on individuals, and whether they had the consent of those individuals to hold data about them. These concerns were brought into the public eye by the rapid transformation of society by citizens’ use of new technology and digital platforms, such as the adoption of social media and e-mail.

The first thing to note is that Britain leaving the EU as a result of the ‘Brexit’ vote will have no impact on the adoption of the new regulation; as mentioned, the regulation comes into effect in May of 2018, and businesses must be fully aware of their obligations under this new legislation.

So what exactly will businesses need to be aware of and need to implement in advance of 25th May 2018? Full information about the regulation and some preliminary guidance is available online from the Information Commissioner’s Office (ICO), but I will summarise the headline issues and actions in the rest of this article.

The good news is that GDPR provides your business or organisation with opportunities to revisit business processes in a way that will yield efficiencies and engage with past contacts and clients. The bad news is that businesses and organisations are up against it if they have yet to consider the implications of GDPR for their work, and they must start to do so now if they are to be ready in time. GDPR is mandatory legislation, and does not provide businesses or organisations the opportunity to opt out. Failure to comply with GDPR, especially in conjunction with a data breach, could result in sizeable fines. In addition, it is businesses and organisations themselves that are held legally accountable (not their employees), so you need to ensure that everyone on the payroll understands the significance of GDPR and their professional obligations under it.

In a broad overview, GDPR can be summarised as having two core themes; the security of data held by an company and organisation, and the rights or permissions of that company and organisation to hold that data. Each is equally as important as the other as far as the legislation is concerned.

In terms of data security, GDPR is primarily concerned with how information on individuals is both stored and accessed, and whether a person who is viewing that information has the individual’s permission and good reason to do so. Given that most information is stored digitally, the prime concern for businesses and organisations will be how information is kept or accessed on digital devices such as laptops, computers and phones, but this also extends to data storage solutions such as USB sticks, CD-ROMs and internet servers. However, GDPR also covers traditional hardcopy records and how they should be kept under lock and key when not being accessed.

The main focus of these security concerns is minimising the risk of data breaches; data incorrectly or illegally accessed or obtained by others due to a business’s or organisation’s carelessness or non-compliant processes. Given that identify fraud can be easily committed with the bare bones of information about any one individual, the legislation is to ensure that the risk to citizens is minimised when they provide their personal details to others for legitimate purposes.

The second, most equally important aspect of GDPR is the justification for a business or organisation to retain information of individuals in the first place. In other words, does that business or organisation have the consent and knowledge of that individual to hold onto information about them, and is the information that they do hold relevant to the organisation and only used in an appropriate manner?

This in turn means that businesses and organisations must audit the information that they currently have on file to ensure that it meets the criteria, and must dispose of information that is no longer valid or justifiable. In addition, it must also look at how it gathers information, how that information is stored and how that information is accessed, specifically in terms of the individuals’ own awareness of how the business or organisation intends to hold, process and store their data.

To tie these two strands together, businesses and organisations must nominate internal stakeholders with regard to data protection, and let the Information Commissioner’s Office know of this point of contact.

As you can gather, GDPR is a huge subject with significant ramifications, but it does provide a spur for businesses to get their houses in order, with eventual profitable outcomes in addition to the required compliance.

The good news is that there is still time to get your business compliant for GDPR. Also, If you’re already following existing data protection legislation, you’re probably in a position to make the few remaining transitionary steps. Diamond Discovery can help you with this and provide software solutions to help you maintain compliance, so do get in touch with me if you want to know more.

For more information on technology that help with your accountancy services, please visit, call 01656 725800 or e-mail

Prelude Accounts can also be found on Twitter via @PreludeAccounts /

We are delighted to announce that Prelude (AKA Prelude Accounts) will be exhibiting at the upcoming ICPA Practice Evolution Conference taking place on 7th June in London and 27th September in Manchester.

In addition, as a reader of this website, you are also eligible to receive a 10% discount, just quote “PA10” when booking.

This year’s conference will focus on the issues faced by the accountant in practice and will look at technical topics including 4MLD, VAT pitfalls, MTD, Taxation of Rental Income, etc. as well as ways to help you future-proof your business and help it flourish in the coming years.

The specially-chosen speakers are all experts in their field with great presentational skills and they all have the remarkable ability of imparting help and information.

Confirmed speakers include:

  • Steve Pipe: How to become the most respected and successful accountants in town by “doing good”
  • Melanie Lord: 10 VAT pitfalls to avoid so HMRC don’t win on penalties
  • Steve Checkley: The latest on MTD and admin issues
  • Richard Simms: From risk assessments to due diligence: how to be 4MLD compliant
  • Colin Walker: Taxation of Rental Income: From repairs to Interest deductions
  • Elaine Clark: At first I was afraid I was petrified but I will survive
  • Nick Lewis: Twitter from Zero to Hero for Accountants in Practice

You can catch up with us throughout the day at our stand in the exhibitor area.

Remember to quote “PA10” to get your 10% discountclick here to book or call 0800 074 2896.

We look forward to seeing you there.

If you’re an accountant and you read Accounting Web recently, you would have thought that the apocalypse had arrived. “I love this product, and now I have to work out what to replace it with” said one, “I do the vast majority of my clients’ bookkeeping so will now need to either switch and pay for other solutions!” complained another.

What had brought about this chorus of despair? VT Software had announced that it would be halting the development of VT Transaction+, a small business bookkeeping tool that often operates as a front end to their final accounts package.

Apparently many, many accountants were reliant on Transaction+, which allowed them to use Excel spreadsheets, desktop accounting software and Dropbox in collaboration with their clients.

VT Software wielded the knife because “the government plans that all VAT returns for businesses with a turnover above the VAT registration threshold must be submitted via MTD [Making Tax Digital] from April 2019. As a consequence, VT Transaction+ will no longer be suitable for these businesses.”

VT Software is not necessarily wrong in its judgement. Making Tax Digital will represent a significant shift in the way accountancy operates as a whole. However, the howls of despair from some quarters are not called for, as there are plenty of alternative software solutions out there that are relatively inexpensive and that improve accounting processes above and beyond what VT Transaction+ offered.

Many accountants who used VT Transaction+ were King Canutes wishing to hold back the tide of Cloud accounting and other modern practices, but tides unfortunately never retreat on command. Such ‘hold outs’ are also fundamentally mistaken, in that everything they were doing with VT Transaction+ was just badly replicating what Cloud accounting software does anyway. Indeed, by using tools such as Dropbox, they were using the Cloud to carry out their work. So why not make the next logical leap and just use purpose-built Cloud accounting software?

Well, the reason is cost. To be blunt, people begrudge paying for something that they think they can work around for free. While as a business person myself I can understand the need to minimise overheads as and when possible, sometimes one cannot avoid the inevitable expenditure that one has to incur to make a business function and comply with sector norms.

In any event, it is wrong to think that accounting software is wildly expensive, difficult to use and an additional burden to your business’s processes and bank balance. Actually, they offer an experience that is the diametric opposite of all those negatives.

For example, from just £10 per month, an accountant can use accounting software that not only replicates the functionality of VT Transaction+, but also easily supersedes it. Not only does most accounting software offer invoice generation that automatically emails the invoice to the customer and posts the bookkeeping transactions, it can generate all the graphs and tables you wish for (or actually need, which in my opinion is much less than some software offers) without cumbersome Excel formulae that invariably and sometimes horribly go wrong along the way.

Additionally, most Cloud-based accounting software is incredibly easy and intuitive to use, and all based on the same platform – in other words, no more downloading, uploading and using multiple programs to achieve a single goal, namely managing someone’s accounts. Modern accounting software is easy to grasp, with the margin of error minimised for both the client and the accountant. By being hosted on the internet, the information is securely stored in a central location where it can be viewed and added to by accountants and the relevant client. Cloud accounting is not some mysterious, insecure threat – accountants who rely on email and generic Cloud storage services like Dropbox and Google Drive are in effect already using the internet. They are just using the internet in an incredibly cumbersome, inefficient and insecure way.

Modern accounting software is more than just software, and arguably more than just accounting. The various additional and automated features that accounting software provides for both accountant and client, such as the aforementioned invoice generation and aged debtors reports, remove costly and time-consuming tasks. Accounting software should always make you more efficient, not less, and by embracing it you’re saving money for your business, and not adding further to your existing overheads.

VT Transaction+ users should not despair; they should welcome this opportunity to modernise their existing practices so they’re fit for purpose in the age of Making Tax Digital.

For more information on technology that help with your accountancy services, please visit, call 01656 725800 or e-mail

Prelude Accounts can also be found on Twitter via @PreludeAccounts /

Events have a habit of overtaking discussions. In my first article in this series, I discussed the pros and cons of automatic bank feeds. In the second, I examined how you can use your accounting software to reduce the need for automatic bank feeds, and the third discussed how automatic bank feeds can be used effectively by accountants. Since then, ‘open banking’ has come about as a pressing topic and has ramifications for everything I have discussed so far.

What is open banking? According to Richard Evans of the firm Crowe Clark Whitehill, it is “a software platform that allows a customer to compare prices of different components of banking services – for example, clearing, payments, investments and use of different providers for different services on one platform”.

These platforms will emerge on the back of the Competition & Markets Authority (CMA) review, which concluded that large retail banks do not do enough to be competitive with each other to attract customers from each other. In parallel, in 2015 the EU passed the second Payments Services Directive (PSD2), which stipulated that banks had to make Application Programming Interfaces (APIs) to open up all their data and infrastructure to third-party companies by 13 January 2018. And Brexit will not mean an opt out for British-based banks.

In real terms, for the accountant, what are the ramifications of all this? In short, cloud-based accounting will evolve once more with, in all likelihood, the banks themselves developing online accounting services so as to remain competitive with each other as well as third-party accounting software packages such as Xero, Sage and Diamond Discovery. This could theoretically lead to people managing their accountancy services through their bank, directly with HMRC. And in such a scenario, who would need an accountant?

As you’ll have gathered from my previous articles, I think new technology provides opportunities for the accountancy sector as well as threats, but open banking does seem to pose a genuine and real existential crisis right across the profession.

APIs are useful things to software developers. They allow the programing code of different software packages to be visible and adapted to other pieces of software, creating a new unified product in the process. Examples of this include Hootsuite, which allows marketers to control different social media channels from just the one screen, and Uber, the infamously disruptive cab-hailing service that uses mobile phones’ GPS to unite potential passengers with potential drivers. Done right and done effectively, APIs can upend an industry overnight; just ask a London cabbie.

There is a faint silver lining for the progressive accountant: they can now develop their own bespoke software if they so choose, to meet their clients’ needs. However, development can take time and money, and the accountant should consider the ROI of such a strategy.

None of this will have escaped HMRC’s notice. What could be more appealing to a government or a state than having the ability to monitor its own citizens’ bank accounts in real time for tax gathering (and other) purposes? Maybe that is a little paranoiac, but you don’t have to be Franz Kafka and favour green ink to acknowledge that the technology and legal framework now exists for governments to access bank accounts directly via the APIs that the banks are forced to disclose under new legislation. Indeed, HMRC itself is rapidly developing a whole suite of online applications that cut out the middle man between bank account and state; namely the accountant.

So, what is to be done? As I keep on reiterating, it is important for practising accountants to modernise their processes across the board, to reflect the rapidly changing technological backdrop to the sector. Even if an accountant chooses not to adopt a new technological process, they will need to at least be aware of it and have a rationale for not adopting it (and not all new technology is necessarily desirable technology). At the very least, an accountant should look to embrace cloud accounting, as the principles behind it will inform the processes and behaviour of open banking in the longer run. To be brutally direct, we have now reached a point in accountancy where it is very much ‘adapt or die’, and I feel I can write that without fear that I am resorting to hyperbole to get my point across.

As a software developer myself, I am happy to talk to any accountant who wants to know what open banking and technological change mean for their specific practice, and advise them on the robust steps needed to modernise their services for the 21st century.

For more information on technology that can help with your accountancy services visit, call 01656 725800 or email

Prelude Accounts can also be found on Titter via @PreludeAccounts /


In my first article in this series, I discussed the pros and cons of using automatic bank feeds, and in the second, I examined how you can use your accounting software to reduce or even eliminate the need for automatic bank feeds. In this third article, I want to examine how automatic bank feeds can be used effectively while avoiding the reservations I have previously expressed about using ‘screen-scraping’ software.

Businessman stressed by too many tasks works in the office

Whether I like it or not, automatic bank feeds are now a permanent fixture in the accountancy landscape, certainly for the foreseeable future. Given this, how can such software be used to good, robust and reliable effect?

In other words, is there a ‘best of both worlds’ scenario, where accountants can use automatic bank feeds while adapting existing processes without any professional compromise?

To my mind, the best use of automatic bank feeds is as a check or as a reassurance that your work is accurate and correct – i.e. to populate bank reconciliation. Some may think this to be a duplication of work (i.e. enter and import bank transactions), but bank reconciliation is just that, and automatic bank feeds allow you to obtain transaction data from a bank account quickly and easily. Having said that, I have previously noted that most banks allow you to export such information as a CSV file without the need for automatic bank feeds. So the above suggested use of bank feeds is unnecessary if you’re prepared to put a little bit of work into your existing systems and processes.

You may be using or considering automatic bank feeds due to client expectations and professional peer pressure. While such things should not encourage you to cut corners or avoid necessary work, to be competitive you too may want to advertise the fact that your practice uses automatic bank feeds. Prelude Accounts is currently talking with new potential partners about providing such functionality with safeguards in the context of the arguments presented in these articles and, importantly, avoiding screen-scraping methods.

In any event, you should think carefully about just how much you actually want to automate your role, as you may end up making yourself effectively redundant, at least in your clients’ eyes. It is becoming increasingly apparent that HMRC is looking to deal with businesses and individuals directly, bypassing accountants in the process. Their method of doing so will be through the internet, apps and associated software. A cynic could say that this would precipitate a surge in accounting and reporting errors with a resulting increase in the Exchequer’s revenue, but I couldn’t possibly comment. Whether or not this strategy proves successful, your clients are increasingly going to be asking if they actually need an accountant if everything ends up being either semi or fully automated. Why would anyone be willing to pay accountancy fees if an accountant is no longer needed?

I would therefore urge accountants to be proactive in investigating new technology including cloud accounting solutions, as they will need to see how they fit into this brave new world. To help you, I will continue to voice my opinion and advice through this blog and articles for the ICPA’s Accounting Practice magazine. In this changing landscape of software innovation, consider that the context should not be just how it can make your life easier, but how it can help you to maintain your service as trusted and indispensable to your clients. What do you offer that cannot be replicated by software?

In this series of articles, I have given examples and arguments as to how a forward-thinking accountant can ‘future proof’ their job in light of automatic bank feeds and other software and processes – make sure you note them, and build them into your sales narrative with your clients. If accountants are not careful, they will end up as just software resellers, licensing software to their clients who will then be tempted to cut out the middleman and deal with the software vendors directly. It is therefore important for accountants to work with companies such as Diamond Discovery to modernise accountants’ processes while not eliminating the need for the accountants themselves. Failure to react (positively and prudently) to automatic bank feeds and other new software could leave you behind the times and perceived as archaic as the abacus.

For more information on technology that can help with your accountancy services visit, call 01656 725800 or email

Prelude Accounts can also be found on Titter via @PreludeAccounts /

Are you affected by the announcement that VT is ceasing development of their Transaction+ product?

If you are, Prelude Accounts’ Accountant Bundle could be the answer to your problem!

This is a FREE Accountant Bundle. Yes, completely free and exclusive to your practice for your clients’ accounts including the option to create up to three named users for your practice colleagues and bookkeepers.

Your Bundle will include our ‘Client Manager’ with which you can:

  • Create accounts for your client companies, as many as you need
  • Manage a full accounting and bookkeeping service with no limit on transactions
  • Monitor your clients’ debtors, creditors, VAT, Bank and Profits

Contact us on 0845 223 2170 and we will build your bundle in no time!


In my last article I reviewed the pros and cons of using Automatic Bank Feeds software given changes in the market for these services and the inherent risks in the screen-scraping techniques used by some service providers.

Can you already replicate automatic bank feeds in your existing accounting software?
(Image via Fotolia)

In this article I want to explore using features that should be available in good accounting software to remove or at least significantly reduce the need to import bank transactions.

Accounting software should offer three essential ways to enter transactions: manually, scheduled, data import.  Of course, automatic bank feeds is a specific example of data import.  Depending on the nature of a business’s activities, a combination of these can be used to enter banking transaction efficiently without the need to subscribe to additional bank-feed services.

For businesses that process customer and supplier invoices, when the payment date is known (e.g. agreed terms, paid by credit card, BACS or scheduled payment), with just a few more clicks the payment can be posted at the same time the invoice is posted.  Prelude Accounts offers this functionality.

With regular payments and receipts (i.e. direct debits and standing orders), bank transactions can be anticipated and so entered in advance on a defined schedule.  For example, outgoings such as rent, business rates, mobile and broadband fees can easily be anticipated in advance.  We will soon be refining these features within Prelude Accounts.

I would be surprised if there are many (if any) retail banks that do not offer an online banking facility.  Those that do will probably also include a facility to download transactions in a useable data format, e.g. CSV.  Good accounting software will offer import/export of transactions.  Surely it makes sense to utilise these features offered by banks and accounting software.  Effectively it will replicate the so-called “unique” selling point of automatic bank feeds and importantly it will do so without violating your or your clients’ banking terms and conditions (see previous article).  Prelude Accounts provides CSV import as a key feature, and we encourage our customers to make more use of it.

Of course, as I have said before, it remains vitally important not to mistake importing bank transactions, manually or automatically, with bank reconciliation.  The former can be optimised with such features as described above, but care must still be taken as it is easy to duplicate or enter wrong transactions.  Bank reconciliation will identify this and could thereby help to identify process improvements; it is a key business control (to confirm that you and your bank agree on how much of your hard-earned money the bank holds) and should not be automated.  In fact it cannot be automated, as the moment it is automated, it ceases to be a business control as no actual oversight or interrogation is undertaken.

With MTDfB being inevitable in some form or other at some time or other, accountants must engage with all their clients to use accounting software effectively.  This is essential to ensure that the proposed increased frequency of reporting to HMRC does not result in significant increased work for the accountant, the full cost of which could not be passed on to clients.

Take this as an opportunity to review processing of bank transactions with your clients.  I think you will find that the best approach will be to use the time-saving and regular/scheduled features of your accounting software combined with CSV import to its bank reconciliation feature.  It is a matter of finding the best balance of processes with your clients, depending on their business needs and competences and being mindful that, with cloud-based software and online banking, the workload can be shared between clients and accountant.

Check out the features that your accounting software provides, understand it and ensure that it will work for you, and share this knowledge with your clients.

Notwithstanding all the above, I acknowledge that there will be some circumstances – client business type, accountant/client preferences and competences, unwavering desire to automate everything that moves – for which automated bank feeds is a must.  With the removal from the market of Bankstream (their “bank-authorised data feeds” having been acquired by QuickBooks) along with our aversion to the use of screen-scraping techniques for well-documented reasons, we are looking to partner with a service provider named OCRex.  Watch this space…

For more information on technology that can help with your accountancy services visit, call 01656 725800 or email

Prelude Accounts can also be found on Titter via @PreludeAccounts /

A New Year, and it seems the world is getting more automated with each passing day. I’ve written extensively in the past about the opportunities and threats posed to accountancy by emergent technologies, but I would now like to focus on the current status of Automatic Bank Feeds in 2017.

Automatic reconciliation
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In previous articles I have explored what Automatic Bank Feeds means, i.e. a software-driven process that sets out to substantially automate the input of banking transactions into accounting software and the reconciliation with statements provided by the bank.  Different software providers use different technologies to achieve this, some with and some without the source banks’ knowledge or even permission.

I sometimes think of automatic bank feeds as the mythical siren singing from the rocks; attractive but potentially disastrous. While some providers of automatic bank feeds do so in partnership with the source banks and are therefore legitimate or ‘bank-authorised’, there are others that exist in a grey area contractually and possibly legally. These providers use ‘screen-scraping’ software to log in to banks’ online accounts and ‘scrape’ the transaction information from the pages to the process it into a useable data format to import into accounting software.

I have stated before that I think screen scraping as a method of capturing banking data is highly problematic when utilised without banks’ explicit consent or knowledge. My understanding is simply that it violates banks’ standard terms and conditions; a person who uses screen-scraping software has knowingly given their bank account details and login information to a third party. If any fraud were carried out on the account in question, the account holder is completely exposed and would very likely not be eligible for reimbursement.

Three years on from when Automatic Bank Feeds became prominent in accountancy, I remain concerned as to whether screen scraping is sufficiently robust and legitimate enough a process to pass muster and whether it actually does what it says on the tin. ‘Automatic’ is a misnomer; the accounts must still be checked for errors and if they’re not, it is possible that a key control, i.e. reconciliation, is not done and maybe further, no interrogation or intelligent analysis of the accounts. In Part 2 of this article, I will explore further how aspects of Automatic Bank Feeds can actually be beneficial and useful as a process, but I still advise caution to not take the word “automatic” too literally.

Some providers of Automatic Bank Feeds software have partnered with banks to offer an authorised service, thereby ensuring that the associated banks’ terms and conditions remain satisfied. I am both excited and encouraged that banks are beginning to open up their infrastructures to software providers with a view to developing solutions that will help both accountants and their client businesses. However, there are still issues and limitations with these authorised forms of Automatic Bank Feeds.

One of the main limiting factors for authorised methods of Automatic Bank Feeds is that they’re not universal; not all banks have consented to their use or have given the software the required access for it to work. This causes a problem for the accountant; yes, you can import a client’s accounts into your accounting software but only if that client’s bank account is with a particular bank. This inhibits the accountant from really developing new efficiencies; while some of their clients may be able to use Automatic Bank Feeds software, it is almost certain that many others won’t. Therefore, I would argue that the accountant is better off improving their existing processes across the board for all of their clients, and to cherry-pick new IT functionality to complement that process (I will explore this idea in depth in Part 2).

Secondly, some authorised Automatic Bank Feeds software products have been developed by businesses that are not big accounting software providers. Great you might think, and initially it is. However, the last year has seen some of these businesses being acquired by accounting software providers, which will invariably result in that software becoming available only through the acquirer’s accounting software. This in turn means that people who buy into such software could find themselves being shut out in due course if they don’t happen to already use the acquirer’s accounting software.

Given the existing limitations anyway of Automatic Bank Feeds software, these ‘garden walls’ that have been built up narrow the appeal even further. In short, authorised Automatic Bank Feeds is probably only going to be cost-effective if all your clients happen to use the same couple of banks and if they and you are all using the specific accounting software that happens to own the authorised Automatic Bank Feeds software in question.

Not terribly attractive as a proposition, is it?

However, it is not all doom and gloom. In Part 2 of this article I will explore how best accountants and their clients can use elements of modern technology and software to replicate the most appealing aspects of Automatic Bank Feeds.

For more information on technology that can help with your accountancy services visit, call 01656 725800 or email

Prelude Accounts can also be found on Titter via @PreludeAccounts /