Text of an article appearing in The Bottom Line, May 2014

Small firms can find help
with new AFP

If you’re familiar with Excel, it’s easy to make certain modifications to the AFP worksheet to customize it for each client.

by Richard Morochove, FCPA, FCA, CA.IT, Morochove & Associates

The bread and butter of most public accountants involves the compilation, review and audit of client financials. Accounting For Practitioners (AFP), from Pendock Mallorn Ltd. of Campbellcroft, Ont., aims to improve productivity by automating many public accounting processes.

AFP Premium, Version 6, offers a host of useful features including journal entries to get client books ship shape, support for compilation, review, and audit checklists, presentation-quality financial statements with a notes library, and automated client letters.

Analytical capabilities let you calculate trends, ratios and perform a GST/HST reasonability test. Bank reconciliation and bank confirmations are supported. There’s even a simple time tracker and invoicing capability.

Given the specialized nature of this software, there isn’t a broad selection of alternatives. Canadian competitors to AFP include Wolters Kluwer CCH Engagement and several products from CaseWare International. CaseWare, arguably the industry leader, has spawned a sub-industry of CaseWare add-ons such as financial templates from Jazzit and Keystone templates.

One key difference between AFP and its principal competitors is its heavy reliance upon Microsoft’s Excel spreadsheet. In fact, you can’t use AFP without Excel 2000 or later. You need to load an AFP worksheet into Excel. AFP adds its own menu and automated functions to the spreadsheet.

The Excel requirement doesn’t seem to be an undue burden. It’s difficult to imagine an accountant working without a spreadsheet. Excel is as good a speadsheet as any, although some would argue it’s overpriced compared to free open-source alternatives.

AFP’s complete reliance on Excel’s engine can lead to some complications. For example, AFP didn’t work properly with Excel 2013 until the Office 2013 Service Pack 1 was released in late February this year.

If you’re familiar with Excel, it’s easy to make certain modifications to the AFP worksheet to customize it for each client. You can change anything coloured blue. You can’t change absolutely everything in the file, otherwise the automated functions might break.

Pendock Mallorn president Cleve Pendock says he offers a free file repair service if you inadvertently break the automated functions. He notes he rarely needs to repair more than one file for a new user.

AFP doesn’t support native file import from client accounting software. However, if your client’s accounting software can export a trial balance to Excel, you can then import it into AFP and massage the file to get it to work. Most small business software can handle this.

AFP is aimed at the sole practitioner or small partnership accounting firm. If you’re now using unadorned Word or Excel templates for your client financials, the built-in automation of AFP could help you kick up productivity a notch.

If you’re handling large clients in a large public accounting firm, then AFP’s inability to lock and remove file segments for field work may be problematic. With AFP, the complete file must be transferred. Furthermore, AFP provides no built-in file-sharing mechanism for collaboration. Pendock says Microsoft’s SharePoint can be used for file sharing but no one has requested it.

If you’ve bitten the bullet and know CaseWare cold, then I believe there’s little to gain by switching to AFP. However, if you’re still wrestling the CaseWare financial statements bear and find it a little too much for your style of accounting practice, AFP could be the right solution for your needs.

At just over 50 pages, the manual for AFP is relatively brief for such a comprehensive program. However, if you are familiar with Excel and client write-up procedures, the documentation should be adequate. I found AFP fairly easy to learn how to use.

Pendock is developing a series of 30 short online training videos to explain operations in more detail. They should be available by the time you read this.

I reviewed AFP 6 Premium using Excel 2010. Premium costs $999 and is licensed for up to 15 users in the same firm and same office, and the annual renewal fee is $449. There is unlimited toll-free telephone support. Software upgrades and updates have no additional charge.

A less expensive light version of AFP is aimed at accountants who perform compilations and don’t require the additional capabilities of Premium. Light does not include checklists, PDF printing, consolidations, client letters, trend analysis, scanning and client data analysis. It costs $599 with an annual renewal fee of $299. It’s licensed for up the five people in the same firm and same office. The Light version can be upgraded to Premium for the difference in price and prorated increase in the renewal fee.

A new educational version was recently completed. It will be free for lab use at educational institutions and can be installed on each student’s computer.