Paper Accounts Slowing Down Business
4th December 2017.
Almost a quarter of small businesses in the UK are sacrificing higher rates of growth and productivity by maintaining their accounting records on paper rather than online, according to an independent study by accountancy firm, Accounts and Legal.
The research has been based on data collected from Accounts and Legal’s “Interactive Instant Quote tool”, whereby businesses were asked a series of simple questions about their methods. An overwhelming number of businesses were revealed to still be using traditional, paper methods for their accounts, despite more efficient means already available.
The accountancy firm found 22 per cent of businesses preferred Paper over Excel or other Accounting Software for their accounts. Those with the old-style approach were most prominent in small businesses with an annual turnover of less than £500,000.
This has surprised officials, given the level of marketing and PR by the likes of Xero and Quickbooks and other cloud accounting software in the last 5 years. Despite their relatively low cost, the study shows the number of small businesses actually adopting accounting software only began to noticeably increase during 2017.
Small businesses are showing undeniable resistance to modern thinking. Just as high street businesses are struggling to compete with the interactive platform of online companies, small businesses are unwilling or unable to embrace the concept of cloud accounting.
For those few businesses that did embrace alternative accounting software, the most popular choice among the UK’s 5.5 million small businesses remains Microsoft Excel. While this is certainly a better option than paper, Chris Conway from Accounts and Legal, insists that cloud accounting software offers better business efficiency and insight.
Mr Conway insists cloud accounting software is more efficient, reducing the chances for human error by automating the process of data entry, sorting data and calculations. Accounting software further allows for greater integration with other financial services tools, such as HMRC’s services, payroll, and inventory management.
The most important aspect to Cloud accounting is the ‘cloud’ itself, Conway adds.
Cloud computing technology means a small business is no longer burdened with the need to store its data on their own computer hard drive. Cloud accounting platforms store a business’s accounting data securely “in the cloud”, meaning the data can be accessed from anywhere and everywhere and reduces the risk of data loss.
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