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October 2010

UK's two holy grails are crippling its next generation of bright sparks

Two articles in this Saturday's Times caught my eye:
Yolande Barnes lamenting on "Britain will be a nation of graduate students"
and ex-student Jodi searching for advice to reduce student debt so she could rent a property on her own instead of sharing with 3 friends, in Money's MoT.
(Sorry I can't link to the two actual articles online - you'll have to pay The Times for the pleasure nowadays - I did, I bought the paper version)

The holy grails: being a student, property ladder


Since the 60's these two goals seem to be the have all for all the classes, gone are the days that only the elite could afford further study and buying bricks and mortar.

Makes you wonder what's so elite nowadays of having crippling student debts?

Mrs Barnes (head of residential research at Savills) laments about the next generation of students having to find rental properties en mass because repaying the loan for being a students will prevent them from saving for a deposit for a home.

"It means that as much as a fith of thier gross income will be taken up with savins adn debt repayment. Inconveniently, our erstwhile student will also need shelter, food, clothing and all the other neccesities of life during this time, With no equity to buy a house, they will need to rent. And they will need to do this for a good deal linger tahn we did in orevious generations."

She even "fears" that those whom finally buy a house at he age of 40 will be there for a long time and not, as was usual before, just for a few years and then to move up on the "ladder".

"This means an end to the stepping-stone game and a flight to quality. It puts added presure on the value of family homes in good locationsm which are already the most resilient properties in the market."

Try a different approach?

In my opinion getting on to this first rang of this holy grail is/will only possible for hose "poor sods" whom took/take a different approach to gaining knowledge and money: training on the job. With this I don't mean applying for an apprenticeship as part of day-time education.

I followed the same path of training on the job:
after leaving secondary school at the age of 18 I went to "college" to train/study as primary school teacher, to quickly realise that was absolutely not my forte! So after that first year of experiencing what it is to be a student - with a government subsidy, to be paid back interest free 2 years after, if I had sufficient means of income and where the repayment was spread of 10 years.

After leaving the college I didn't know what I really wanted to do, becoming a journalist was still high on my wish-list of favourite careers. The first visit to a recruitment agency landed my an admin job at a local factory (producing pure alcohol) where the ins and outs of bookkeeping were revealed to me. I thought I would give it a year to find out what I really wanted, adding a part-time reporters job at the local paper to my career path. In the end I stayed at the factory for 19 years and had completely forgotten about becoming a full time journalist, writing only stories and articles for my own pleasure or local magazines.

During those years I climbed the ranks of office jobs, started as junior clerk on a minimum wage, ended up as assistant logistic manager and had a few years of assistant bookkeeper, sales, it and quality control thrown in for good measure. All in all I studied (at home, in the evenings - weekends) for 3 highly valuable certificates. The last one, MBA - Modern Business Administration, not the Masters thingy - was the most valuable and took me 3 years in total. All the while earning money, having an ever increasing wage packet, an employer paying for the course - on the condition that if I left the company within 2 years of finishing the course I had to repay the costs, plus early on in my employment the ability to get on to the first rang of the property ladder.

Now I have to admit that buying bricks and mortar in The Netherlands - where then over 70% of the population lives in rental accommodation - made good sense the minute you earned more and the "burden" of income tax grew. The interest paid on your mortgage was deductible from your income, lowering your tax band.

On the other hand, many live in rental accommodations all their life and quite happily so. My parents lived for over 20 years in the same house, decorating it to their own wishes/style. There are various housing associations, from council to private sector, building whole estates with decent and well-sought after houses to fulfill to demand in rental properties, It's part of growing up - at least it was for me and my generation - to leave your family home (rented) to go to your own (rented) flat/appartment and clime the (rented) property market over the years like your own parents did.

Why have the burden of a mortgage if you have the benefit of renting a decent house on a long term contract in the neighbourhood you like/want to live? The long term contract gives you the pleasure of making it truly "your home".

Alternative grails: work to study - build to let

Fact in point however is the principle I think still makes good common sense: why burden the next generation with crippling debt because of this holy grail that everyone, no matter from which background, should have the experience of being a student. Does the majority of 17 - 18 years old even know where their talents lay, what job, occupation would suit them best? Why then are they forced to decide on that age for which subject to take at a college or university?

I could have it absolutely wrong of course, only living in the UK for the last 10 years in only private rental accommodation, but it seems such a wast of precious time for "students" working up a debt before they start earning a living and then having to put their life on hold to pay of their student debt. And then some still "dare" to say that with an University or college degree you earn more quicker?

Take Jodi, the ex-student in this weekend's Money MoT: 27 year young, a decent wage of £ 19.000 but still miserable in debt, a debt that started as a student and spiraled out of control to a staggering £ 24.000 at the moment. Tired of her "student"life-style, renting a house together with 3 friends. Her goal: pay her way out of debt, renting a property of her own and taking driving lessons. She studied journalism, film and broadcasting at Cardiff University, her job now is pastoral manager n a West Sussex School. Where's the benefit, gain of her years of studying at the university?

Say she left secondary school at the age of 17 - 10 years down the road she still lives "as a student", has no savings to speak of, can't afford to take driving lessons and is faced with a very poor credit rating due to all her debts accumulated since starting the holy grail of University.


Say her neighbour left school at the same time, but started working in an office, starting at the bottom. Not very exciting, but earning a living from day one and "learning" valuable skills on/in the job. Her boss sees her as a valuable asset, worth investing in and pays for her training courses that will benefit both. After 10 years she's earning more (perhaps even more than £ 19.000), and in the knowledge that she would be welcomed by many more companies valuing her experience and business-focused certificates. She might not yet stepped on the first or second rang of the property ladder, suppose she's renting a very nice house. This would make her very flexible in moving to another part of town, county or even country - to go there where she could be paid even more.

All that in the same 10 years.

Isn't it time to forsake the two holy grails and for secondary school leavers to become their own "master" from the start. Not being crippled by debt for a study that might not even suit the economy, not being tight down by "brick and mortar" that can loose "value" without any influence of your own.


The modern economy is asking ( screaming?) for youngsters whom are flexible. Flexible in knowledge, skills and with an affinity for training/studying those subjects that will benefit both them as their employer. Flexible to move where ever their skills, experience is needed/valued most - any rang on the property ladder will never make you flexible.

Modern economy is asking (screaming?) for decent homes for long term contract tenancy - the government should focus on development of private sector rental estate, giving in the hands of associations (be it council run or private sector). There's where the money will be: "build-to-let"

When your accounting program starts emailing you, you pay attention!

Since we switched from Aweber and Mamut CRM to Octane - which does our both email and follow-up marketing - I receive an email every morning telling me which follow-up letters to print, which prospects to custom email or to call in regards of an outstanding quotation. An online program as "task-master" where ever you are (and have internet/email access of course).

I'm also used to receiving emails from my accountant on what to do next on the business, I hope your's does this too. But now even my accounting program is emailing me!

Further switching to on-line programs

In an earlier post I explained why our existing accounting and -ecommerce desktop software needed replacement. The new Ecwid e-commerce widget was quickly found and doing what it is supposed to be doing: easy navigation for our online shoppers with a simple and straight forward check-out process (offering various payment options too).

Next up was the accounting part. The search concentrated on UK based SaaS (Software as a Service) software, eliminating waiting time on support tickets if and when needed (5 - 8 hours time difference between UK and USA is half a days work missed - been there, waited that long). Having some experience with Liberty accounting I discarded that program - not flexible enough for my standard/methods of bookkeeping, project management and financial reporting (yes, we are a small company but facts and figures does help you to know where you stand and where you want to go, so rather important).

Kashflow, online accounting softwareHad a look at Clearbooks but like Liberty it has a fixed fee for limit on transactions then additional costs when you go over your "llimit", which IMHO restricts effective bookkeeping in service of financial management. So I in the end I selected Kashflow (found this program through a tweet from Duane Jackson, Kashflow's founder, when I tweeted about Clearbooks - now that's a clever and effective use of twitter).

Liked what I saw and read, specially the API link between Paypal and the online software, plus one fixed fee per month for everyone with no nonsense about limiting the number of transactions. Free trial available for 2 months - which I took. After only 1 week I decided to open an account - free trial continues, I won't be billed until this period has finished.

When features are benefits

Kashflow comes with many (simple) features which in many cases are real benefits for those, like me, who consider bookkeeping an essential and important part of running your business in such a way that working in the business becomes working on the business.

Customer details included the source this contact came from (with the additional "feature" of setting a cost per source - enabling you to finally discover which 50% of marketing expenditure works (sure you all know the famous quote about knowing 50% or your marketing budget works, but you don't know which 50%), reports of income per month or any period you want to see, per source, drilling down to client level.
(Side-note: I have one little problem with these on screen pie-chart reports: selecting invoice issued or invoices paid gives a rather different result, one reports ex VAT, the other including VAT; just a matter of adjusting the way you "think" about "income" I guess.)

Like the first ever bookkeeping program I selected when we first arrived in the UK (there is a slight difference in Dutch or English bookkeeping methods, won't go into that here) MYOB, Kashflow trusts its users to know what they are doing and allows editing of bookings unlike other - big name - software programs. When MYOB was taken over by Mamut we added the accounting package to the Mamut CRM - only to discover that now some beneficial items of the CRM program no longer worked. The only solutions was to upgrade again to an even higher package (Enterprice 3) to resolve this problem. Strange but true.


Mamut accounting did not have the option of editing any of the bookings which meant credit notes, correction journals etc. Finally with the last upgrade this was sorted: only it seemed Mamut is so afraid business owners do not know what they are doing that every time you want to correct/edit a booking (only very limited corrections also) you had to enter your user name and password again, even when you - like me - are the only administrator in the program. For every single correction!
Come on Mamut - we're no naughty kids, we are business owners!

Anyway, those days are now gone and I'm quite happy with the Kashflow online software. When the trial period is over we'll be paying £ 14.99 ex VAT per month, plus £8.45 per month for the Paypal imports. There is a second option for Papal, importing income and outcome once a week for £2.99 a month but I decided to compare "costs" versus time to be spent on adding known data - already online - to another program manually.

Since the switch from Mamut ecommerce to Ecwid ecommerce there has been a significant increase in online orders being paid through Paypal express or normal Paypal checkout. More orders also mean more often booking the courier (also online, great company) which we pay by Paypal. All sales, purchase and transfer details are collected by Kashflow once every hour through the Paypal API, creating new customers or suppliers where needed and adding the invoice, purchase order to the contacts. IMHO this saves me more in time than the £ 8.45 represents.

Minor issues

Of course, there are - as with every program - minor issues. Already some of my questions/querries, suggestions submitted through the excellent and quick to respond support desk (who seem to work during the evenings and weekends!) have been added to the to-do-list of the development team. Could be that I have a different way of looking at bookkeeping than others, but nice to know Kashflow appreciates involvement of their clients.

One of the issues I have are the product codes: at the moment I have to create a product code in both the "Sales-Type (as Kashflow renamed the nominal accounts group for turnover) as well as to the "Outgoing Types" (as Kashflow renamed the nominal code groups for costs of sales and expenditures).


Why not one product code tab which has a sales type and an outgoing type as default value? I'm adding the code products now as and when needed.

Repeat purchases are easily created, which is a great time saver, only not for those suppliers who bill you in different currency than GBP

Repeat invoices and bank transactions can also be created, only not repeat journals. You can create journal templates though, so perhaps turning the templates into repeat journals once o month, quarter etc will be possible in the near future too. I hope so.

The software works so effective the "books" are now up to date every day, more and more purchases are added to the automated repeat purchase list, so next month I'll have even fewer items to book. And the normal financial management reports I create every 3 months for myself and my team, including our accountant, are already "in there" with one click of a button.


So top marks and the Kiss Award for Kashflow, makes running your business easier with in-depth instant details on how you're doing. And of course sending me early morning emails telling me which suppliers need paying and which clients should pay us today.


(Side-note on Mamut: I've now been told that because we're not renewing the annual service agreement fee I will loose access to the desktop software program the minute the existing agreement ends. A desktop program - not online "hire" of server space. When I argued I'd paid for the actual program itself and the service agreement is for updates and support all I hear is: it is mentioned in the licence agreement. Well, the person who sold me the first ever Mamut product (CRM & Sales) never told me that.
So, be warned if your business needs a more complex Enterprise Solution - check you don't end up with only the exported bits and bytes of all your historical data when you cancel the service agreement of a desktop program!)