We know that every small business starts out its journey by using Excel as the easiest way of doing their accounts however this is only doable up until a point. Your business will eventually evolve and grow and then you will need something more suited to your developing needs. So why not start by using online software straightaway?
Excel isn’t a long-term solution but why you ask? Excel can do a lot of the basic accountancy tasks however the security and stability of the application are not as strong as you might have hoped. Online accountancy software, is a much more robust alterative and there are several reasons why;
6 problems with using Excel for accountancy purposes
1. Excel is quite difficult to use if you are not used to its programming language
So many small businesses forget this. Excel is so widely used that people believe they know all the functionalities however a lot of the time Excel users misjudge their level of expertise and can make mistakes.
2. Setting up can take time
To ensure you make the most out of your Excel spreadsheet when it comes to imputing accountancy data, setting up a template requires a lot of thought and pre-planning. There is a lot of expertise needed to set up things like expense reports and invoice tracking – there maybe times where you find yourself struggling or constantly needing to input new data which is very time consuming and complicated.
3. Before you start, you need a plan
In Excel one of the biggest grips is having to know exactly how you are going to use the data before imputing it into the spreadsheet. After you start, there is no flexibility to configure it. You need to know exactly what you want to call your reports, which cells you want to print and how to time stamp all your records – if you don’t it will only come back to you further down the line.
4. Excel doesn’t leave an audit trail
By using Excel, you are susceptible to fraud but how? As Excel is so easy to change it is hard to keep track of who makes the changes.
5. Excel does not integrate with other applications that your business might require
A lot of the time people run into issues when working with large amounts of data on multiple worksheets as it becomes systems overload! Excel doesn’t help with this as it doesn’t integrate with any other small business applications that could be of benefit to you.
6. Transactions are difficult to track
As an example, Excel doesn’t automatically recognise duplicated, instead you would have to manually track these to ensure 100% accuracy. In this sense, Excel hinders rather than helps.
So why make the switch to online software? Here are 7 reasons why…
1. Pre-developed dashboards mean you can hit the ground running
In any online software such as Xero and QuickBooks an easy to use dashboard is set up for you before you even input in any figures enabling you to have a clear financial view from the start and give you the confidence you need to make informed business decisions.
2. Your data is accurate
With an online system, your company’s data is kept up to date in one centralised location so you always have real-time financial data. You can even align your bank feeds to the cloud so bank statements are automatically entered reducing time and mistakes.
3. Reporting is simple
With just a few clicks, you can get any report you want without having to wait around for the month to end. You can pull real time reports and budgets which are also very easy to view and share with others making everyone’s lives a lot easier.
4. Manage your finances easily and more accurately
By using an online software your small business will be equipped to manage its finances better and more accurately. Even with a moment’s notice you can pull the vital information you would need for meetings, investors or shareholders.
5. Your audit trail will be clean
Any historical data you need is available at your fingertips as a proper audit trail ensures your data cannot be compromised. Every transaction is recorded including sales contracts, employee payments and debtor information.
6. Online software syncs with other applications
You can take full advantage of all the other application that sync with online software to make your life so much easier! Every bit of your financial data can be in one place at the same time reducing hassle and time – what could be better?
7. Access anytime, anywhere!
By using an online system, you can give your team members access to the data anytime, anywhere making it easier for your colleagues, accountant and bookkeeper to keep up to date and on track of everything for you.
If this has helped convince you to make the switch, check out our cloud accountancy page or get in touch with one of our experts today by calling 01454 619900 to set up a trail.