Why online accountancy software is not the solution
Bold statement from an accountant I know – especially one that has fully embraced online and accountancy software since 2007.
But small businesses are bombarded with software solutions - we hear it every day on the TV and via targeted ads online: “XYZ software…. Job done, taking care of taxes, your partner in business etc.”
These cloud-based power houses can throw huge budgets to sell their software via ads to small businesses who think it will solve all their problems.
Unfortunately, they don’t…
More and more small business owners come to us having signed up for a cloud solution, thinking they will save money, but feeling more frustrated than ever.
Accountancy software is a brilliant tool, but the data coming out of the software is only as good as the data being input into it.
This is where the first major pitfall is:
Business owners are specialists, experts and gurus in what they do. However, they are not experts in tax, accounting and bookkeeping – nor do they want to be (so we are told…alot).
So, the software churns out some data and what you owe for various stuff, but what if this is wrong based on the actual data inputted? How much are you missing out on by going DIY?
Online software cannot tell you:
• If you can actually claim for certain expenses
• What allowances you may be entitled to
• If you’re maximising your allowances
• Dividends and taking money from your business
• If you should be a sole trader or limited company
• The correct VAT structure for your business when appropriate
Time is such a precious commodity to a business owner.
With a cloud solution, the business owner is expected to input their financial data into the software after running their business for the day or at the weekend.
So data might not be correct and this time could have been spent more productively on running the business and generating sales.
Computer says no...nothing can beat a human that cares.
Even if the data is correctly inputted (how would you know though?) and you are a super wizz at inputting, know the latest rules and are confident in your figures, what about the success of your business?
Data looks backwards and is reactive. That’s the basis of accountancy in terms of compliance.
However, we all know cash is the lifeblood of business, so what about looking forward? Cashflow is even more important for small businesses than large organisations. An expert human you trust can add enormous value and save a lot of stress when it comes to cash.
Not only that but all aspects of your business – an ear to bend, a trusted advisor and a collaborative approach using a couple of brilliant tools to help keep you in control.
This is where the software is so valuable.
Business owners access their financial info 24/7 and then together with their trusted advisor can look at this data to move forward and achieve their goals. The costs of your accountant should be less than the savings you make. But DIY software will not save you time or money, but it could limit your potential to make money.
A UK survey of 1,500 small businesses found that: those with professional support work an average of six hours less every week and enjoy their business 7% more than those without.
Businesses that thrived in 2020 were also more likely to use professionals before making important business decisions.
So, in summary, I love accountancy software – I can’t live without it and many customers share this feeling. But the key to success is to see it as a tool in partnership with your trusted advisor to look forwards and ultimately do better in your business.
Want to do better in business? Don't DIY.
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