I was recently asked this question by a client who wanted to switch to us as their accountant and also wanted to continue to do their bookkeeping using the spreadsheet that they had been using for years. In fairness, there is no easy answer to the question. Change, being the only constant in life, is always challenging - we like our "comfy pair of shoes", dont we? However, there are many reasons to consider why spreadsheets are now a thing of the past when it comes to your bookkeeping.
For a start, there is Making Tax Digital (MTD). You may have heard of this. It is already in place for VAT registered clients with a turnover in excess of £85k per year....and the plan is to roll this out to tax return only clients in the next two years and then Limited Companies will follow. There are and will be HMRC bridging tools that you can use to transfer your information over to HMRC but how these will work...well, we can but wait and see.
The main reason, without a doubt, is the access you will have to your business financial information - anywhere in the world with an Internet connection and all from your smart phone or tablet...and the ability to share this information with your accountant without the need for needless journeys to your accountants office, relying on the post or expensive couriers (if you have THAT MANY receipts) and do you think that an accountants fee's will remain the same if you deliver your records to them "in a carrier bag". Of course not. Plus, what about if you require advice from your accountant during the course of the tax year? If your bookkeeping is all up to date and reconciled with your connected bank account in the software then your accountant can see your current financial position and their advice therefore becomes easier to give and potentially more accurate.
Bookkeeping is an essential part of any business - no matter how large or small - and the software should be seen as an enabler...something that enhances your life as a self-employed person or business owner, saving you time and money, improving your cash flow and enabling you to make decisions that affect your business quickly and easily.
Let me ask you a question. Do you have online banking? Can you imagine a world where we go back to banking without a mobile banking app? Can you imagine having to wait a month to see your bank statement or having to ring your bank to find out what your bank balance is?
Let me ask you another question. Let me swap your Smart Phone with an old Nokia 6310 or similar - no access to the Internet, no voice activation, no Google Maps....NO FACEBOOK MESSENGER, TWITTER or other social media!!
So why would you do your bookkeeping manually and not use all of the tools available to you - accounting software being one of them?
I remember how nervous I was when I got my first Smart device - don't laugh...a Blackberry...which we used for our emails while we were on the road...and then progressing to a real Smart Phone. It did take me a little while to get used to it but I wouldn't be without it now and I only use about 20% of its total functionality. The same for your accounting software...it takes some time to get used to it and you will probably only need about 20% of its overall functionality. We offer training and on-going support on how to get the most out of it. It is to our advantage as well!
Similarly, when I first came across QuickBooks Online I didn't have a clue how to use it - my bank account was all that I needed - or so I thought. I would not go back to running a business without the software...no way. I easily match my income to my sales invoices, my payments to expense receipts. I can then easily see the receipt or invoice to check information later on - no burying my head into a folder full of receipts to remind myself what I bought 15 months ago. I have easy access to see who owes me money and who I owe, I can run a Profit & Loss report year to date, the previous month or week and with the advanced reporting functionality I can review all my past years business performance at the click of a couple of buttons. I do my bookkeeping daily...you may have the type of business where you dont need to do it as frequently but a few seconds a day to "post" a transaction is better than several hours at the end of a tax year...and is certainly better than what can become several days if you are still working a manual system.
At M.A.D. Accountants, we are certified QuickBooks Online Pro Advisors but can also work with Xero, Sage, FreeAgent, Clearbooks and other accounting software.
If you want to change to a digital accounting solution then contact the team - we are here to help and advise.
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