I had always meant to write about this process, but originally thought that I had better wait until it was complete, just in case it all went wrong! However, prompted yesterday by requests on the Small Charities CEO Facebook group, I thought I might as well write and share a first draft now, and at least share what I have learnt so far, as I think that it could be useful for many. Please if you read this, firstly know you are part of a very exclusive crowd. Frankly I’ve seen the statistics on my blog, and not many people do read anything that I write! I write though mainly to practice and become more fluent, and just because I really enjoy sharing what I know and what I learn. I am hoping this blog will grow substantially over the coming months and years, though by grow I mean in terms of the numbers of blog posts, rather than readers!

If anyone wants to have a further chat about anything in this blog post, or any other, or frankly anything really then do reach out. I’m always very up for chatting, sharing ideas and thoughts, and continuing to expand my networks.

So, on to finances, and specifically what we have done this year to improve ours at the Stonegrove Community Trust. 

Firstly though, a little background on me, and financial management. When I started my first CEO role at Kentish Town City farm in 2016, we had a finance person (freelance and very part time) in place, and were using QuickBooks desktop. I wanted easier access from multiple computers, and so asked him about upgrading to the online/cloud based version. He was very reluctant, but in the end agreeable. Once completed, which took very little time indeed as they pretty much do it for you, he agreed that it was pretty much the same thing. They seemed to have changed the names of a few thing – notably the reports, perhaps moving even further from accounting terms, and trying to use words than non-accounting professionals would more easily understand. Dangerous Dave, as probably only I called him taught me how to use QuickBooks online, and I was then responsible throughout for the ins and outs, with him then assisting with payment matching where I messed it up, plus doing the slightly more advanced tasks like bank reconciliations and journaling etc. I could essentially do those things myself as well, but:

a) I did them so infrequently, that it felt like I was relearning each time, and so he was just so much more efficient.

b) When something isn’t quite right, someone with financial experience will much more quickly/intuitively work out where to look, and/or how to work it out. Some of these people even claim they enjoy that part!

The biggest improvement with QuickBooks online was that instead of always having to save up all issues until Dangerous Dave (terrible name for a finance guy) could visit again, if something was important then he could login from home and we could resolve it more quickly. This made it much easier for me to chase him more promptly, and removed an excuse for him not being available more quickly to help us, which of course was perhaps only an advantage for me and not him!

My original steers onto which software packages to use all came from my mum, who is the Finance Manager at an amazing charity called Elfrida Rathbone Camden. She recommended QuickBooks online, plus Brightpay for Payroll, which at that time was being provided completely free of charge to charities, and is a brilliant product with great support. She had had some problems with the built in payroll within the QuickBooks package, and poor support when trying to resolve those issues.

Fast forward to my current role, starting in January 2019 as CEO of Stonegrove Community Trust (SCT). I was the first ever directly employed member of staff, as up until that point the charity had been run by the Trustees, with the support of some consultants/freelancers. The finances were managed very well and there was an accurate and robust budget in place for 2019, though up until that point everything was just using spreadsheets. I fairly instantly introduced QuickBooks online, which the Treasurer and another Trustee helped me set up. I always had support with it from within the board, and just about made it work doing the majority of the finance work myself.

As well as my CEO role at SCT I work as the Lead Consultant for the Camden Community Centres’ Consortium (C4). Our key project is exploring the use of technology and the digital maturity of our members, and of small charities as a whole. One of the key areas of course is financial management, and from speaking with others, including Nicky Furre (well mostly her really, and her finance guy), I realised that it was possible to implement much higher levels of automation within our financial systems. As SCT was growing very quickly (tripling turnover in c.3 years) this seems an obvious place to invest some time and resource.

I had already implemented Expend cards for our team. These are pre-paid debit cards, which are just really easy to use, and which you can link directly to your finance software so that your staff team can code their own spending. You can then review it in the Expend dashboard and make any changes, or send back to them for amendments if you wish. I’ve explored a couple of the other options including Soldo, but Expend just works much better I think. With Soldo you have to put. money into a virtual “Wallet”, and then from that Wallet individually top up each card. With Expend you simply put the funds into a central pot, and then each card can spend according to their Spending policy, as long as there are central funds available. The system is hugely flexible, allowing you to block cards instantly if lost/stolen, and switch them back on if found, all through the app. You can also instantly change lots of options on each card, such as whether they can withdraw cash, use contactless, and even be used in specific types of businesses. Up until now I always thought that Expend did not do charity discounts and I have been paying full price. However whilst writing this blog I spoke with them, and they have supplied this link, which if you use and set up a call with them, they will set you up an account with an ongoing 10% discount. I’ve of course got them to also apply that now to the two accounts that I already have set up with them! I do not get any commission from this link – the financial benefit here is solely yours.

Expend referral link 

With Nicky’s encouragement I decided to change our main finance system from Quickbooks to Xero. Having now used Xero for a while I am very happy that I made that decision. They are very similar to use, so making the switch is not hugely difficult. I think the issue with QuickBooks is probably that because it’s been around for so long and started as a desktop application, which meant that the cloud-based version had to integrate with the desktop one, it has some what you might call “Legacy issues”. Xero was more recently created, as a cloud-based system, and so is easier to integrate with other cloud-based software/systems, and (from my experience) integrates more efficiently and effectively. There are also a growing number of software products that don’t link to QuickBooks at all, for example the new booking software that we have implemented for our centre. We’re only just setting that up now so I won’t share what it’s called, but if it turns out to be as good as I hope, then maybe I’ll write about it in the future! A few of the specific reasons that I believe Xero is a superior product are:

  1. Loads much faster. Always found QB could be quite slow moving from page to page, but Xero is pretty much always instant.
  2. Better and more flexible report setup. Need to read the odd tutorial to take advantage of this, but it took me very little time to create some really useful saved reports to use regularly.
  3. Xero allows your contacts to be both suppliers and customers, where as QB makes you set up the same company twice – once in each section.
  4. Instead of just having the “class system” as in QuickBooks. Xero allows you to have multiple Tracking categories. I don’t use this currently, but as an example you could have one called Projects to show which project the income/expenditure is for, and another called Funders to show which funder either provided the income, or the spend is listed against.
  5. Xero has loads more additional functions that work really well. Some do cost extra, but stuff like Expenses and their Projects functions are very good indeed if they suit your organisational usage.
  6. The automatic parts of their software work much more effectively – for example the payment matching, and definitely the receipt reading if you use the Expenses function. I tried to use the receipt/invoice scanner on QuickBooks self employed previously but gave up pretty quick. When it failed to read the monthly invoice for my QuickBooks subscription, I realised that it probably wasn’t worth using! *it may have improved since, as I haven’t used it in a while.
  7. They provide a charity discount, and so it works out a decent amount cheaper than QuickBooks. Of course there is the original setup so not saying you’ll recoup that with the price difference, but it’s still an ongoing bonus!

*I’m not a finance expert, so totally prepared to find out that something that I have listed above is incorrect! If you believe that I’ve made a mistake, then please do let me know.

Also worth sharing that moving from QuickBooks to Xero is very easy. Xero pay for a service called Move My Books (basic service). We paid an additional £144 (VAT included) to Move My Books, which allowed us to transfer over two previous years of completed accounts in full, plus our Class system.

So, on to describe our overall system and how we manage our finances. I have contracted with a highly skilled finance professional who is an expert in Xero, and the many various plugins and other pieces of software that it can integrate with. He is the highest paid person on our team, but only works for us a day or so per month, and is very efficient. We are paying him some additional days for the initial setup and advice.

Xero is our main finance system. As described above we use the Expend cards, which is how my staff team do the majority of their project spending. We have now pretty much eliminated personal expense claims, which is saving a lot of time.

Xero have purchased and fully integrated another product called Hubdoc. Hubdoc has other competitors and one of them might even be better, but Hubdoc is now provided free of charge with Xero, and works very well indeed. We do not use all of the functions and may expand how we use it in the future, as it can be used for both expenditure and income in different ways. As it stands, we use it as follows:

  1. When an invoice comes in we send it to Hubdoc. If it’s an emailed invoice then I forward it to a specific Hubdoc email address. If it’s a paper invoice then I scan it with the app on my phone.
  2. Hubdoc is linked directly to our Xero account. When an invoice has been processed it goes straight into Xero, and you can control in what “state”. I put them through as Awaiting payment, but if you have multiple people putting them through and you want someone to carry out a final check in Xero, then you might put them through as Draft, to then be approved.
  3. Hubdoc also maintains a copy of each invoice itself, plus if you wish can integrate with other cloud-based file storage software, and file an additional copy. Three copies of everything seems overkill to me, but whatever floats your boat!
  4. Hubdoc reads and analyses the invoice. Occasionally (quite often with scans) it can’t read all of the data on them, but generally it will populate the following fields: Invoice date, £ amount, company, invoice number.
  5. You then populate the parts in the Xero not configured section. This is where you link it to an existing Xero contact (or create a new one directly from Hubdoc), plus add account code and class/tracking category. At this point before clicking on Publish all to send it through to QuickBooks, you can click either Save configuration, or Autosync.

Save configuration means that the next time you forward an invoice from the same supplier, it will add in the same information that you have provided this time, but allow you to review it before Publishing to Xero.

Autosync means that it will publish directly to Xero with the same information once it receives another invoice. This works well for companies where you are always purchasing the same thing. A good example is your utility bills. They are probably paid on Direct Debit, will be read perfectly by Expend, and (probably) will be coded in the same way each time. Once you’ve set up Autosync for them, you forward the bill each month and there it is in Xero with absolutely nothing else left to do until payment matching/reconciliations.

Hubdoc is our biggest timesaver. I absolutely love it as a piece of software, and will spend the next few years trying to persuade everyone to use it! FYI Hubdoc and it’s competitors do  (I believe) also work with QuickBooks, so you don’t have to move to Xero to take advantage of them.

The final (for now) integration we are exploring is Pay with Wise (PwW). There is a small cost to use this which is based upon the amount of transactions that you use it for, but I believe that the associated time savings are going to be significant enough to make it easily worthwhile. Essentially what happens with PwW is that you go into Xero to pay invoices due, and click Pay bills. It brings up all invoices it believes are due, and you check those and remove any that you don’t wish to pay. You choose to use PwW as the payment method, and then PwW send you a single payment request. You make a BACS transfer from your bank to PwW, and within hours the funds are split into the different payments due, and sent to all of the organisations that you wish to pay. Xero then knows through PwW exactly what all of those payments were for, and so all payments are automatically matched and marked as paid within the system, with no further manual intervention required.

*note we don’t use this yet, so this is a theoretical explanation based on my research! When we do get around to setting it up, I will update this blog post.

Although this is an ongoing journey and we’re not there yet, our current setup is already saving me huge amounts of time. It also has two further, and very important advantages:

  1. Boring repetitive tasks increase the likelihood of mistakes. Our systems should therefore decrease mistakes.
  2. Our financial data through Xero is much more current/up to date, in terms of our expenditure. Whether payments are made through Expend cards on on receipt of invoices, both are being transferred to Xero and fully coded much more quickly. As a CEO I can make better decisions, because I have better financial data.

There are many many more ways in which you can integrate other systems with your finance software. I don’t need much more integrated for my charity, but there might be others that you would benefit for. At Dragon Hall for example, managed by the aforementioned Nicky Furre, they use a clock in/out and time sheeting software, that integrates directly with payroll within Xero.

I’m due in a meeting now so will stop with this draft so that I can share with those on the Small Charity CEO’s group. I will revisit and update very soon though!