If you’ve always used spreadsheets then making the switch to an online, cloud based accounting software package can be daunting. But, the reality is it’s potential benefits could help free up your time and give you access to new financial insights, which could help keep your business on track.

So Microsoft Excel can do a large number of tasks, it’s easily available and is very widely used. It has to be acknowledge that, for these reasons, it has become the go to tool for small business accounts. But while the application itself is sturdy, the spreadsheets created while using it aren’t always so. This often causes issues down the track and here’s a few reasons why:

Setting up a good bookkeeping spreadsheet takes time:

Setting up an Excel spreadsheet that meets all of your financial needs requires a lot of thought and planning. It takes time to set up things like expense reports, Profit and loss reports and Balance sheets. In addition to this, lots of Excel users often misjudge their level of expertise.

You need to know what you want to end up with before you start:

In Excel, you need to know exactly how you are going to use the data before you start, as there’s no real flexibility to configure it later. This can be almost impossible when you initially start a business, which then continues to grow and evolve.

You may find yourself in a situation where you constantly need to add, change or format information on your spreadsheet to get the information you want, taking vast amounts of time.

Continuing to “add on” new requirements to your spreadsheets mean many users run into performance issues because they work with large amounts of data and combine lots of different worksheets. It’s simply system overload.

There’s no audit trail:

Mistakes are inevitable and fraud is a possibility, because it’s easy to change information (either by mistake, or on purpose) and there is no way to track who did it, or when. Any mistakes, take time to discover (if discovered at all), and then a long time to unwind.

Transactions recorded in Excel are difficult to verify as correct:

Some people (like me) love playing with numbers, but most people don’t. When it comes to accounting, the most confusing part for most people is the concept of double entry. Excel does not automatically recognise double entries. That means you need to be competent in the mechanics of accounting, to ensure your spreadsheet is correct.

Moving on:

Once you have grown your business to more than a handful of clients and transactions, we believe it’s time to move on to accounting software. If your looking for new software we would definitely recommend a cloud based accountancy package for the following reasons:

Cloud based accountancy benefits

Ease of access:

Undoubtedly ease of access is the prime advantage of cloud accounting.  Online accounting means just that – it is online so can be accessed at anytime, on any device, anywhere with an internet connection.

It saves you time:

Because of it’s ease of access, you don’t need to be tied to the office. You can update or view your accounts over breakfast, or on your daily commute on the train. You can be confident that you have an up-to-date picture of how your business is doing, no matter where you are.

Security:

Being in the cloud means  all of your information is safely and securely stored off site so business productivity doesn’t need to be affected and there’s no downtime if there is natural disaster, or if your laptop is stolen. No one can access your data unless they have a login to the online account and no confidential financial information is stored on your hard drive.

Easy to keep up to date:

So whether you currently use spreadsheets or a traditional desktop solution, cloud based accountancy software could help free up your time and give you access to financial insights which could help keep your business on track.

Additional benefits:

The system has a built in audit trail, which means it leaves no doubt about who has done what, and when.

Profit and loss, balance sheets, management reports can be setup and customised with just a few clicks. Try doing all that with a spreadsheet.

Preparing Your Data for the move:

Most accounting programs can import Excel files relatively easily.

However, they don’t automatically know which information goes where, so you may have to reformat some of your data. Whatever accounting software you choose will have requirements for the way information is ordered: for example, your chosen program will probably have requirements for column headings, date formats etc and they’ll likely differ for each type of list you’re importing (Customers, Supplier,etc.).

Always make sure you double check the instructions for your particular software and edit your spreadsheet data accordingly before attempting any data importing.

When’s the right time to make the Switch?

The obvious time to switch over from a spreadsheet to your new accounting software is at the end of your fiscal year. This would make the smoothest transition, as all your accounts are reconciled and finalised. But, having said that with a little planning & knowledge, you can change accounting systems any time you feel ready.

Hitchinbookkeeper are Quickbooks Proadvisors, so if you would like to discuss a potential move from spreadsheets to cloud accounting, please do not hesitate to get in touch.

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