I am the first one to admit that I love the simplicity of a spreadsheet. They are quick to set up, and for simple accounting tasks I can see the allure. Ask any small business owner how they manage anything related to numbers and it is rare to find them not using a spreadsheet. This makes sense when you’re starting out, because it keeps costs down, but as your business grows you’ll reach a stage where those “free” spreadsheets are costing you more time and money than you think.
I can’t tell you how many times I have spent far too much time trying to unselect a formula in a spreadsheet and finally decided that this nonsense had to stop. I always remember my self-employed uncle telling me the best investment in your business will be a good accountant and lawyer …. add in accounting system and you have very wise advice!. You and your accountant should be using a good accounting software system to save time and ultimately money. We use SageOne and Sage50 (for complex accounting that accountants prefer), the programs speak to each other and allow us to run detailed reports (reports for your yearly tax reporting) at the click of a button. It also allows me to invoice my clients directly from the system with professional templates to choose from (which you can hook up to Paypal or Sage Payments to receive payment directly). I admit to being surprised and a bit disappointed when I receive an invoice in Excel. There is only one time to make a first impression, don’t use Excel to invoice!
Mistakes are inevitable
In 2013, Market Watch’s Jeremy Olshan wrote that close to 90% of spreadsheets created contain errors, and in the same article a University of Hawaii IT professor was quoted as saying, “even after careful development, contain errors in 1% or more formula cells.”
The root cause of the problem is human error. Many people ignore the fact that building a spreadsheet is, in essence, a basic coding exercise and it only takes just one typo or misdirected cell to bring the credibility of your numbers crashing down. In many circumstances only the most eagle-eyed person will spot an error because spreadsheets are not programmed to alert you to mistakes unless it’s a formula error. Don’t frustrate yourself like I have – use accounting software, and even better have your accountant do it for you! Stick to what you are good at – selling your products and services!
Choosing the right time to transition from spreadsheets
While your current spreadsheet may not be perfect, it is still a key component of running your business. Transitioning over to a new system during a busy period, or when you’re close to submitting figures to your accountant, is never a good idea. Numbers can become mixed up and then you’ll have more problems to deal with.
Instead, research what you’ll use in advance of month, quarter or year-end and time your move after you’ve closed the books for a specific financial period. By doing this you will worry less about migrating transactional data and can start fresh. When we switched from the dreaded Excel accounting system to SageOne we started fresh at our corporate fiscal new year – this made it so much easier for everyone and kept our accountant happy!
The benefits of accounting software
Once you’ve made the move to an accounting software solution you’ll notice some pleasant changes:
Confidence in your numbers
Whether you’re importing numbers from your bank or entering them manually, your financial position will be presented in an easy to understand dashboard that gives you and your stakeholders a clear view of your finances. This breeds confidence in your business and you as an individual. I find it so motivating to see a snapshot of my company financials each time I open our software and the cloud based sharing makes it so easy for my accountant and I to remain on the same page.
Less time spent on numbers
Some people love playing with numbers, many don’t. You’ll notice a major time savings once you’ve moved to an accounting software like SageOne You will be able to import and categorize transactions directly to your bank, allow clients to pay directly from their invoices by credit card, and be automatically notified of an invoice payment status. With a simple system to follow in place, you will find you have more time to focus on a clear plan to increase your sales.
Reports that you don’t have to build
Need a breakdown of your P&L for your bank manager or investor? How about understanding your tax position? Click a button and you have it. You don’t have to worry about building a report or asking your accountant to do it. I feel so in control of my financial picture of my business because I run reports at the click of a button. Should I ever want to sell my business or take on a business partner I know that I will have a very easy and clear picture to share with my stakeholders.
Working with your accountant becomes a breeze
When it’s time to go and see your accountant, you used to be armed with spreadsheets and a shoebox full of receipts and invoices – now you can just give your accountant access to your online accounting software account. By giving your accountant access to your accounting software he or she will be able to support you more often—and because you’re providing less hassle during tax time, they may even reduce your fees! With a cloud based accounting system like SageOne you will even be able to develop a system to work pretty much entirely remotely with your accountant
One system for many things
Your spreadsheet can easily become a thing of the past for recording your income and expenses. You’ve probably been invoicing and recording card payments using other means—managing information in various places and manual entry of your calculations. When using an accounting software solution you’ll be managing everyday financial tasks with ease and because it’s one source for your numbers, you’ll only have to do them once. You’ll have peace of mind knowing everything is calculated correctly and you will have instant at-a-glance reporting–leaving more time for you to get back to your business and spend less time on your books. Ever since moving to an entirely Sage based accounting and CRM system I feel so much more organized and I am able to locate key customer and financial information quickly and proficiently. I know it may seem scary switching to a new system but it is worth the small amount of time. The time investment will ultimately earn you more profits .