Croft vs Sage
We're often asked why a club - or more likely its Treasurer! - should have to learn a new system, when Sage is regarded as the default standard. However, ask anyone from club managers, treasurers and auditors about Croft and they'll all tell you the same thing: it's much easier to operate, it's tailored to suit small businesses like golf clubs, and the management reports can be understood by people on committees.
What started us?
Croft was developed because of the complexities of the law relating to private members sports clubs and their dealings with vat. In 1990 the E.E.C. ruled that such clubs should not charge vat on playing members subscriptions, or associated charges such as locker rents. The U.K. Customs 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 for that quarter on those items - the percentage varies per 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 to Customs. 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.
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 deals with partial VAT automatically, Sage does not
Croft deals with all of the above calculations and procedures automatically, Sage deals with none of them. Clubs using Sage have to perform all the calculations manually, or bring in their accountants each quarter and annually to calculate the vat for them - at a cost of course. The Croft calculations and vat audit trails were designed in conjunction with Customs who checked and verified the correctness of the calculations - so you don't get any problems at a vat inspection.
Croft is technically more accurate in its VAT calculations
Croft goes further than the above. It should be appreciated that if a percentage of the input vat is not recoverable then it becomes a cost to the club - eg. if you buy a tractor for £20,000 plus £3,500 vat then approximately £2,500 of the vat is not recoverable - so what happens to it? In Croft it is charged back to the tractor, so the tractor cost is accurate. In any other system, be it manual or Sage it is not so. The unrecoverable vat is charged to a single account - no matter whether it is derived from a tractor, the pro's retainer, clubhouse electricity, bunker sand, or any other transaction affected by partial exemption - so that the 'Unrecoverable Vat' account is a giant dustbin - ie. a sundries account. Members hate sundries - the members of one Lancashire golf club rejected the annual accounts at the A.G.M. as a result of the Unrecoverable Vat account and we stepped in to provide the answer.
Sage users, however, have to put up with the dustbin philosophy, and as a result have inaccurate accounts. What is the point of having accounts split between Clubhouse, Green, and Administration (say) when part of the Clubhouse cost and part of the Green cost is sat in an account reported under Administration?
The 'cop out' is that those clubs declare that this 'Unrecoverable Vat' account is vat - it isn't vat, 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, so if the accounts are acceptable to such a degree of inaccuracy then you may as well have a single income account and a single expense account, and not bother with any analysis.
Croft goes further still. Because the quarterly claimable vat percentage varies wildly (anywhere between 10% and 100%) and then averaged out annually, it makes the mid-term management reports nonsense unless you take that into account - ie. the above tractor purchased in one quarter might cost just £20,000 (100% recoverable vat) or £23,150 in another quarter (10% recoverable vat), but by the time that the annual calculations have been performed and extrapolated the cost becomes £22,500. 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. The Sage accounts, unless a considerable amount of manual (and very knowledgeable) effort is applied are misleading and inaccurate.
Croft Accounting 'knows' what type of vat is relevant for a particular service or product - eg. Subscriptions (Playing) are exempt of vat but are included in the vat calculations - eg. income from the trade-in of a tractor requires vat to be extracted but is not included in the vat calculations. Sage does not know and requires the operator to make most of the decisions.
Croft does much better, easier to understand reports
Croft reports can be any format. Within Croft Accounting itself they are highly adjustable, but the information can also be transferred into Excel and adjusted by yourselves if there is something particular you want on the report - eg. a percentage calculated at a specific point. Or we can prepare a report in a particular format for a club - a couple of clubs have used that option.
If you want further advice on report formats then please call the Croft office. With regard to the Excel option, Croft 'builds' the report in Excel in such a way that it can be attached to an email and distributed to club officials (providing they are computer literate!) - Sage only passes to Excel the basic unformatted information, which then requires much more effort to produce anything useful.
Croft integrates with Membership, EPoS till systems
Croft integrates with Croft Membership such that Membership automatically updates Accounting with subs payments analysed to the various nominal accounts, and taking into account the vat considerations. Croft can also integrate with Bar Card Till systems - but it depends which till system you have installed. The till auto-updates a members card balance within Croft Membership when used at the till. 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 Help Line is more than just a support facility for Croft software products. The Help Line staff are also experts in vat and partial exemption and are always willing to provide advice and support on matters of vat. Sage aren't.
Nine out of ten clubs that install Croft Accounting do so because Sage cannot deal with partial exemption vat, but also cite the complexity of the Sage operation. Croft was developed with a golf club office in mind - not advanced bookkeeper level.
There are 275 Croft systems installed nationwide, the majority of them in golf clubs and dealing with the very specialised subject of vat partial exemption.
I hope that the above information gives you some insight as to why Croft is installed. Sage is totally suitable for general business, but totally unsuitable for the golf club environment. And that's what our customers and their Auditors say as well.
