Making Your Finances Compute

Sydney Morning Herald

Wednesday July 1, 1998

LEEANNE BLAND

AS THE Quicken Deluxe personal accounting software is being loaded onto the hard drive, the message "Get rich slowly" comes up on the screen. But the message could have just as easily have been "Get rich in an organised way", because organising your finances is exactly what Quicken - along with other popular personal finance packages such as Microsoft Money98 and M.Y.O.B First Accounts for small businesses - does.

The more financial we get, it seems, the more papers we accrue. Quarterly and monthly bills, bank statements, insurance premiums, credit card statements, shareholding statements - the list seems endless and often the filing cabinet (or worse still, the shoe box at the bottom of the wardrobe) can seem a mess.

For many, the end of financial year is a burden - not because they might have to pay tax, but because they have to face those dreaded files. If end of financial year means hours of rummaging through incomplete files, a personal accounting software package may be for you.

Picture yourself, next June 30, simply taking a few minutes to enter the last of the quarterly statements of the financial year into your PC, copying it onto a disc and sending it off to your accountant. There are numerous packages on the market, but Money looked at three of the most popular to get a feel for how we can be better managing our finances.

Quicken Deluxe is the newest version of Intuit's money organising software. The most basic way to use it is as a sort of electronic transaction recorder. You simply record transactions in your current account register and then get the software to balance the account once a month.

To take it one step further, you can also categorise your transactions. You could, for example, divide them into the areas of spending, such as entertainment, groceries, rent, and utilities. This enables you to calculate, say, how much you spent on entertainment last month and how it compares to this month or how much you have saved this year compared to last year. This sort of analysis lets you answer that frequently asked, but not often answered, question: Where did all my money go?

If you are the forgetful type and remember to pay your bills only when they come with "FINAL NOTICE" stamped in red, Quicken can remind you to pay scheduled bills such as electricity, telephone and gas.

One of the more impressive features of Quicken, at least for those who have a mortgage, is keeping track of how much you owe on your home loan as well as how much it is worth. You can also do the same for your other major assets - such as cars, jewellery and investments - and Quicken can then produce a good estimate of your net worth.

A bonus feature with this version is the Quicken Home Inventory, which lets you record specific information about about each item in your home (or office) and attribute it to which insurance pol-icy it is covered by.

It also calculates the actual and replacement value of each item on the list and lets you know if you are under or over insured and by how much.

Of course, no real picture of your financial well-being - not to mention your spending patterns - would be complete without detailed information on your credit cards. Quicken can calculate your total credit card debt and reconcile your credit accounts.

If you are an investor, Quicken has a facility that lets you track your sharemarket portfolio and record any purchases or sales. With tax time just around the corner, the biggest selling point of Quicken as well as Microsoft's personal finance organiser, Money98, is the way they streamline the process.

If you have kept track of your transactions throughout the year on a personal finance accounting package, compiling the information you need for your tax return may take only minutes.

Quicken lets you keep an eye on your plans for the future, with its financial planning calculators in the planning section. They enable the user to work out loan balances, savings and retirement goals and remortgage situations.

The facilities that Money98 offers are pretty similar to those offered by Quicken. The biggest difference is in the layout of the site. If you are familiar with the Internet, you will instantly feel at home with Money98, as it is set up in the same way as a Web page.

In fact, Money98 makes much of its ability to link users to the Net. If they have Internet access, users can click through to Microsoft Money Online as well as automatically access a range of financial sites through Money98's Internet links.

Not on the Net? To get you started, Money98 also gives you 30 days free Internet access. Through these Internet connections, users can pick up stock quotes and daily headlines from financial magazines and newspapers.

Even if you are not on the Net,

there is still a lot of value in Money98.

Like Quicken, it has a built-in bill calculator to remind you when they are due. You can even set it up so that every time you log on, the screen will flash with details of bills to be paid.

As well as the day-to-day financial organising, Money98 has tools that let you monitor and track your superannuation fund, your shares, your managed funds and other investments. You can create a separate investment account for each one.

Money98 can provide you with at a glance information about your money, such as your net worth over specified time. The Money Report Tab, a new feature of Money98, gives a summary of financial activity month-by-month, allowing the differences to be compared.

There is nothing quite like figures on a page reflecting information, such as your net worth, your assets, your liabilities, or even the money you spent at restaurants for the past month, to focus you on where your money is being spent.

Most of the information can be provided in a straight written or graph form. As with Quicken, probably the most time consuming aspect of Money98 is actually inputting all the data needed to get stared. But it is worth taking care to get it right.

Money98 can keep track of 14 different types of accounts, and these savings, investment, loan and mortgage accounts are the building blocks to the whole process.

On the downside, neither Money98 or Quicken includes mortgage offset accounts and line of credit home loans in the package. Quicken says this is because each bank's product is different and that there are no standardised calculations for these types of products.

Although the programs are powerful tools for getting your personal finances together, it has got to be said that it won't be plain sailing at first for technological novices.

Both Quicken and Money98 assume the user has a certain amount of knowledge. If you don't, you can probably look forward to hours of frustration as, with instruction guide in hand, you try to understand what it is you need to do, or even understand what it is you have done so that you can undo it.

But presumably, this problem will be overcome once the user becomes familiar with the program. The best advice for users is to read the manual thoroughly and take the guided tours.

Quicken Deluxe and Money98 have elements that are targeted entirely at small bus-iness operators. In fact, Quicken says around 68 per cent of its customers use it to help run their business. Quicken can be used for bookkeeping, including accounts payable, accounts receivable and payroll.

But for small businesses to get the most out of a software program it might be an idea to use one specifically tailored for small business needs. One option is Data Tech Soft-ware's M.Y.O.B. First-Accounts. This is aimed at smaller service-based businesses.

FirstAccounts reads Money98 or Quicken data, so there is no need to spend time rekeying information.

One look at this program will be enough to convince users that it is for business and not personal use, but the good thing about FirstAccounts is that it is possible to use it to look after business accounting needs without knowing a debit from a credit. When the invoice and cheque screens are filled in, FirstAccounts does the double entry booking for you.

That said, some accounting knowledge certainly wouldn't hurt, as the program will no doubt look a bit daunting if you are not familiar with small business accounting operations.

Buying FirstAccounts entitles users to 60 days of introductory technical support and M.Y.O.B. does run on-site and classroom training programs for its software users.

Alternatively, small business owners may want to sit down with their acc-ountant to set up the initial information.

BUILT-IN CALCULATOR: Automatic reminder of when bills need to be paid

MORTGAGE OFFSET ACCOUNT: Interest earned on this savings account reduces the mortgage.

LINE OF CREDIT HOME LOAN: Ongoing access toa set amount of loan funds.

© 1998 Sydney Morning Herald

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