Finance systems

Finance systems geared to the pub trade are becoming more common, writes Geoff Tyler, but you still need to shop around to ensure your specific needs...

Finance systems geared to the pub trade are becoming more common, writes Geoff Tyler, but you still need to shop around to ensure your specific needs are met.

Anyone old enough to remember the early years of computers appearing in commerce will know they were the size of houses and could only manage the accounts ledgers, and sometimes payroll. Not only that, all the data was keyed or punched in by hand, accurate or not.

Two important points came from that brief history lesson. One, choose and use a finance system capable of more than just recording figures in ledgers; it should tell you a lot about how the business is going. Two, have the sales, purchases, etc. data fed in automatically wherever possible, with no human intervention to waste time and cause errors.

Raw financial data comes from several sources - working time records, payroll totals, purchase records, building overheads, bills - which may or may not be held on the computer. Most significant, of course, is sales data, which probably goes through an electronic point of sale (EPoS) system of terminals or stand-alone electronic tills. Either way, they can be made to interface with the accounts system and deliver the data directly.

EPoS systems

EPoS suppliers know the popular accounts software suppliers and for the most part ensure that the data communication is smooth - ie the receiving accounts software knows that the numbers coming in are beer sales and not birthdays. There is a standard, the American Uniform Charter of Accounts for the Lodging Industry, which most systems use. Mind you, assumptions are dangerous - ask to see the link demonstrated before you commit.

Some of the preliminary accounts work can be done within the EPoS system.

Lucy Philips at Sharp said: "The EPoS system knows how much stock has been used of every item and can analyse it in as much detail as one needs. It can then calculate retro-discounts, like barrelage due, from suppliers or transfer the lot to something like Microsoft's standard Excel spreadsheet for more complex and trade-specific calculations."

EPoS supplier Torex Retail is working on a similar project with a major pub chain involving draught, bottled and dispensed drinks.

Now, back to our first point. Once in the financial system, the data should do more than just sit there.

Accounts software

There are plenty of accounts software products in the shops, with a starting price of about £100 for serious tools. They all deal with the basics of ledgers - sales, purchases, nominal, profit/loss, trial balance, and so on - in much the same way, because these things are laid down by the UK Accounting Standards Board and by taxation laws. There is also an accreditation scheme for accounting software operated by the Institute of Chartered Accountants. Check that the system you are thinking of buying conforms to these.

Among financial systems, Sage is the most widely used among licensees, with Pegasus and QuickBooks fairly common. Larger licensed businesses and chains also use Sun, SAP and Coda. Popularity may not make a system the best for your particular business and pre-purchase examination is essential.

These are all general-purpose systems, and no matter how well the software is structured, the supplier will not have been able to identify sales, purchase and cost categories the way you, personally, want them. They are marketing their software to business in all walks of life, and so will not know whether you are selling pints of beer or used cars. It will be up to you to put labels on everything. Assess how long this will take and how easy the result will be to understand.

Within the ledgers you will also want some freedom. For example you may need room to add short explanations of each item in the cashbook rather than just a one or two word title for the entry. "Taxi" will not tell you, a year on, why the taxi was needed and for whom.

Similarly, a purchase invoice held back from payment needs a reminder of the reason.

Tailored systems

One company has spotted this problem of turning a capable, but bland, finance package into a tool where everything is familiar and it has gone a long way down the road of doing it for us. Barbox.com is a website containing several kinds of management software, and has taken the basic Sage financial software package and tailored it for the licensed trade.

Instead of Sales Category One, Two, Three etc, the package now has draught sales, bottled beers, soft drinks and so on. The result is also cheaper than the High Street version.

Compare finance software products also for the important time saver of how clearly VAT is handled. How is it shown in the accounts, how is it analysed according to sales type and how automatically is the VAT return compiled?

It should need only a key press or two to activate at any time. The same goes for the business end-of-year compilation and tax return.

Business management

Where these systems really differ, though, is in the business management value and guidance from the wealth of information the ledgers contain. The information is only helpful if you can get at it in a meaningful form and make good use of it. Even typical small business financial software comes with nearly a hundred choices of management reports, and if you try to make sense of them all you'll have no time to open the pub.

Barbox ferreted through Sage's eighty-plus management reports, and ended up discarding some and tailoring the rest for financial information of a type their research told them licensees need.

For extra business control you can subscribe to software located on the Barbox website rather than buy it all in yourself. For example, Cost Controller deals with stock movements, wastage etc, and even calculates barrelage commission using its gross profit calculator software.

Subscription to the essential services package costs £2 per week. Adding Cost Controller and a business development aid called Money Maker brings that to £5 per week.

In the final analysis only you can decide what information you want from any system and then decide if the system you are being shown provides it - and what other useful functions it provides that you might not have thought of.

Trading forecasts

For example, if you need to forecast your cashflow over a bank holiday period for good and not so good weather, can you feed that question in and get an answer? Can you compare business trends with similar periods year-on-year or even week by week?

Future business opportunities can arise from spotting a good profit source in the recent past, asking why it happened and, therefore, how you can make it happen again. Things that otherwise get lost in the day-to-day hurry can jump out as good ideas.

You may also need cross-analysed information, for example to tell you not only how profitable individual sales lines were at a given time but also how profitable they all were when sold as part of an organised function. Then you may want to compare the analysis of profits made by several similar functions to arrive at the best formula to sell next time.

Above all, remember who's in charge - the system you chose should work for you, not the other way round.

Functions of a good financial system

  • Sales ledger(s) - accounts receivable, debtors
  • Outstanding invoice analysed by due date
  • General ledger, nominal ledger - with scope for personalising categories
  • Daybook, invoice and payment journals
  • Cash accounts - in as many cashbooks as you need
  • Petty cash record
  • Purchase ledger(s) - accounts payable, creditors
  • Approval process for supplier invoices
  • Forward diary of payments due
  • Choice of payment methods
  • Accr

Related topics Professional Services & Utilities

Property of the week

Follow us

Pub Trade Guides

View more