CROFT ACCOUNTING VS SAGE
Sage is often regarded at the default standard for accounts, so why should you change to a new system? Ask anyone from club managers, treasurers and auditors about Croft Accounting and they'll all tell you the same thing; it's much easier to operate, it's designed specifically for golf clubs, it can save you money and the management reports can be understood by people on committees.
Golf Club VAT
Croft Accounting was developed as a response to the complexities of the law relating to private members sports clubs and their dealings with VAT. In 1990 the E.U. ruled that such clubs should not charge VAT on playing members subscriptions, or associated charges. HMRC responded by not allowing the full recovery of VAT charged by suppliers on certain items, which is known as the partial exemption method.
It resulted in a complex series of calculations per quarter to decide how much VAT could be reclaimed on those items, with the percentage varying each quarter. There is a further series of calculations performed annually to decide the average percentage across the year and a subsequent 'annual adjustment', which is then paid or claimed. The percentage resulting from the annual calculations is applied retrospectively to every partial exemption affected transaction posted during the year in order to get a revised split of VAT between recoverable and non-recoverable. To make matters even more complicated, only certain 'input' transactions are affected by partial exemption, others allow all the VAT to be reclaimed and still others none of the VAT - dependant on another set of calculations, known as 'de minimis'.
Croft Accounting Deals With Partial VAT Automatically - Sage Doesn’t
Croft Accounting deals with every aspect of partial exemption VAT automatically, Sage deals with none of it. Clubs using Sage have to perform all the calculations manually, or bring in their accountants at huge expense to calculate the VAT for them. Croft Accounting enables you to produce your quarterly and annual VAT returns by yourself. The reports, which have been verified by HMRC, tell you precisely what you need to submit, so you don't get any problems during a VAT inspection.
Croft Accounting Is More Accurate Than Sage
Croft Accounting always shows the true cost of an item, Sage doesn’t!
A percentage of the clubs input VAT is not recoverable and is therefore a cost to the club. For example, if you buy a tractor for £20,000 plus £4,000 VAT then approximately £2,600 of the VAT is not recoverable - so what happens to it?
- Croft Accounting charges the irrecoverable VAT back to the tractor to show the true cost.
- Sage, or any other system, adopts the ‘dustbin’ philosophy and dumps all the irrecoverable VAT to a single account, the “Irrecoverable VAT Account”. This account will contain irrecoverable VAT from all transactions affected by partial exemption, such as the pro's retainer, clubhouse electricity, bunker sand etc.
The dustbin philosophy means that the club operates a giant sundries account, something members hate and it means your accounts are always inaccurate. What is the point of having accounts split between Clubhouse, Green and Administration when part of the Clubhouse and Green costs are sat in an account reported under Administration? Some clubs declare that this sundry account is VAT when it isn’t, it is part of the cost of all the items within it. The likely value in that account for an average golf club is £25,000 per annum, a huge degree of inaccuracy for any club to accept.
Croft Accounting Deals With The Highly Variable Claimable Percentage - Sage Doesn’t
The quarterly claimable VAT percentage at any club will vary wildly, anywhere between 10% and 100%, and is then averaged out annually. If this isn’t taken into account then mid-term management reports will be nonsense. For example, a tractor purchased in one quarter might cost just £20,000 (100% recoverable VAT) or £23,600 in another quarter (10% recoverable VAT), but by the time that the annual calculations have been performed and extrapolated the cost becomes £22,600. Croft deals with all that - the tractor is shown in the accounts at its true cost, no matter in which VAT quarter you buy it - Sage doesn't. Unless a considerable amount of manual (and very knowledgeable) effort is applied then the Sage accounts are misleading and inaccurate.
Croft Accounting 'knows' what type of VAT is relevant for a particular service or product e.g. Subscriptions (Playing) are exempt of VAT but are included in the VAT calculations, but income from the trade-in of a tractor requires VAT to be extracted but is not included in the VAT calculations. Sage doesn’t recognise this and requires the operator to make most of the decisions.
Reports Are Clearer And Easier To Understand
Management reports in Croft Accounting can be in any format and are highly adjustable. All information is transferrable into Excel and is formatted to be easily circulated via email. Sage only passes to Excel the basic unformatted information, which can require manual adjustment for email circulation. If requested, Croft Computer Systems can also prepare bespoke reports for a cub.
Croft Accounting integrates with Croft Membership such that the accounts are updated with subs payments analysed to the various nominal accounts, taking into account all VAT considerations. Croft Accounting also integrates with bar card till systems. The till auto-updates a members card balance within Croft Membership. The till auto-updates Accounting with card sales, cash sales, and pay-ins. Sage does none of that.
Croft's Help Line: A Source Of Accounting Expertise
The Croft Computer Systems helpline staff are experts in VAT and partial exemption and are always willing to provide advice and support on matters of VAT - Sage aren't.
Additional VAT And Accounting Support
For clubs requiring additional accountancy support, Croft offers a range of packages to ensure that a clubs VAT and accounts are all running smoothly. Our Annual VAT Health Check, Quarterly VAT Health Check, Accounting Controls Verification Service and Full Accountancy Service provide a thorough analysis of your data, helping clubs avoid any nasty shocks and giving you full peace of mind.
No Hidden Charges
At Croft we are always upfront about the cost of our services. Sage charge extra for what we consider to be basic support. For example, Sage charge extra for telephone or online support, newsletters, data repairs, call back, postage and packaging, updates and upgrades and manuals, all of which come as standard with Croft. The Croft licence applies to the club, not the user. Sage will charge per person using the software. Our training is also done on-site and is personalised with tailored notes specific to your clubs circumstances – Sage does none of that.