Are you considering switching accounting software? Here are 5 signs it’s probably time to take the leap for your business.
Every week we have a conversation with a new client about transitioning them over to cloud accounting software (typically Xero).
They are usually maintaining their books and records on spreadsheets or an older piece of software – normally as a desktop version (i.e. saved to a local server so only accessible from one location).
It can be a daunting task switching software and there is no doubt about it, there is some upfront commitment in terms of time and focus.
However, with a well thought out and executed plan (and the right advisor), for most SME’s the procedure can usually be well under way within a matter of days which then pays countless dividends going into the future.
Unfortunately, there is never a “good” time for an SME owner to implement this kind of change, but it is nearly always better to implement before things get to the point where errors are being made and the associated costs to fix/risks are escalating.
Below are our 5 tips for spotting when it’s well and truly time to switch to a piece of cloud accounting software:
1) You’re spending a lot of time on manual processes getting things ready for posting into the system
A couple of common examples I see are:
- Timesheets.
Timesheets are frequently sent in on the same day each week via various methods including screenshots over WhatsApp and emailed photo attachments of a handwritten note etc. This then takes time to collate and input for later invoicing.
Having a piece of cloud software (such as Xero) allows for the use of real-time electronic timesheets which can be filled out and submitted from anywhere there is an internet connection and tablet device. This saves significant time and cost compared to usual manual methods.
- Bank reconciliations.
Bank reconciliations within a piece of cloud accounting software become much easier with bank feeds (bank feeds securely draw across the data from internet banking into the associated piece of software).
Compared to traditional methods, significant time is saved by not having to locate bank statements and then manually make sure that all line items are allocated into the software (to make sure all payments and receipts are recorded correctly). To manually do this properly is a full-time job for many SME’s when the cost and associated risk of human error can potentially be removed.
2) You’re convinced there’s a better way of doing things
Common give away signs that might lead you to this conclusion are:
- You’re dealing with a software that seems unsupported/forgotten either by the software vendor directly and/or via the wider eco-system supporting it. You can’t obtain answers easily to perform the most routine tasks
- There is difficulty automating the most basic procedures. For example, managing accounts payable and receivables as well as reconciling the bank (see above)
3) You’re paying too much for an inflexible accounting package
Many of the older on-premise solutions (meaning you can access from a geographically located server as opposed to remotely via the internet) charge much larger sums and on a per user basis.
At the time of writing this article, many cloud accounting software packages are not only inherently more flexible, but they charge a flat fee with unlimited users – therefore working out to be significantly cheaper than their on-premise alternatives.
4) Lack of connectivity and ease of access to your financial data
Cloud accounting software is accessed via an internet browser. This allows multiple users access to a single real time source of data.
As described above – older on-premise solutions do not possess this benefit but instead require access to a location specific server.
The benefits can be demonstrated by taking the example a typical building subcontractor. They have the senior management team and admin staff operating from an office, yet staff continuously out on site who need to submit purchase orders and timesheets in real time. Having access to tablet compatible software allows for the submission of these items from anywhere.
5) You’re not obtaining easy visibility of the numbers themselves (e.g. profit and loss and balance sheet in a format needed for management decision making)
Many of the older systems have less versatile and harder to understand reporting features within them (if at all). Many more still will charge additional fees to have a reporting feature built in.
Xero and other cloud solutions typically have an inbuilt reporting feature which is easy to use for most businesses. Additional reporting tools can be plugged in for use separately, but the standard offering for most cloud accounting packages will typically do the job well.
If you’re thinking about making a switch to cloud accounting software, please contact us today on help@northhillfinance.com or call 033 3303 0988.
We are a Chartered Accounting practice providing services right across London and Kent. If you’d like to discuss our services in a face to face discovery meeting or via an online video conference, please reach out to us today using the details on our contact page.