There are two types of people in this world – those who can rustle up a smart-looking Excel spreadsheet with formatting, tables and formulae worthy of a Nobel prize… and then there’s everybody else.
Whichever side of the axis you’re on, there’s no denying that Excel (and its imitators) has certainly been a handy tool for bookkeepers since its release in 1985. But nearly 35 years on, technological wizardry has made way for some far more practical accounting apps and pieces of software – yet a 2017 survey found 65% of small businesses don’t use any accounting software whatsoever – so clearly many small business owners struggle to let go.
Here’s why we think it’s high time you ditched the spreadsheet for calculating your accounts…
Greater potential for human error
Nobody likes to think they can duff up something as simple as putting numbers into a spreadsheet, but it’s surprisingly easy and it’s happened to the best of us at some point. All it takes is a tired brain on a deadline, an unexpected distraction or an unfortunate case of fat fingers. The same goes for creating formulae – and if you get one formula wrong, it could mean you continue to get it wrong for years if you use the same templates. One dodgy formula could mean paying too much/too little tax and a stern telling off (or even a fine) if you’re audited by HMRC. In extreme cases, it could even be a death knell for your business.
They can be inconsistent
If you’re running a business solo, then you’re not likely to run into this problem, but in larger businesses that have different people working across different sheets, things can get very messy, very quickly. With different styles of working, and different Excel competency levels, it can be difficult to get to the bottom of vital numbers!
A central accounting app or piece of software like Quickbooks Online is perfect in this situation – approved users can access from anywhere, everyone sees the same things and you can be assured the information is in real-time. No more accidentally working on an old version of an .xls document for hours!
Harder to integrate with Making Tax Digital
HMRC really shook things up when they introduced Making Tax Digital (MTD). The VAT scheme is up and running and will shortly be joined by the scheme for income tax. Well aware of the potential for human error in manual data entry, one of the overarching features of the scheme is that you must be able to create a digital audit trail of your numbers. This means you must use approved software to submit your tax returns. While ‘bridge software’ has been developed that allows small businesses with uncomplicated accounts to link spreadsheet information, it is certainly not the favoured method. The big accounting software programmes are MTD-friendly by default – meaning submitting your returns is as easy as clicking a button or two.
Spreadsheets aren’t secure
We are (or we should be) more aware of cyber-security more than ever. But while technology to keep out unwanted attacks improves, so does the technology that cyber-criminals use. While accounting software comes with top-level encryption built in, spreadsheets leave you particularly vulnerable if your systems are breached. A password-protected file is not enough!
For more information on the benefits of Quickbooks Online for your business, shoot us an email or give us a bell!