New York-based Access Markets International (AMI) Partner Inc.’s latest survey of small and medium businesses in 20 developed and emerging market countries (including Canada and the US) has revealed that more than half of businesses with fewer than 100 employees don’t use accounting software.
By the Numbers
by Adam Pletsch
Part of the problem has been a lack of choice for those users who are not considered computer-literate. The vendors of such entry-level systems have not, up to now, provided software that is intuitive enough. Nor have they eased the learning process for the uninitiated by eliminating the accounting-speak in their user interfaces.
But two recent trends are making it harder for SMBs to stick with spreadsheets, paper-and-pencil solutions and general chequebook accounting practices: the workforce is turning over and younger, more technologically savvy people are taking the reins of small businesses; and (thankfully), accounting package vendors are getting better at quickly bringing new users up to speed by simplifying the user experience and tailoring more solutions specifically to smaller companies.
Here are a few reasons you might consider replacing your spreadsheet-based system and buying an accounting package:
- Compliance: Accounting packages make things a lot easier at tax time. They also help you comply with any regulations or standards, including relatively new (and definitely more stringent) Sarbanes-Oxley requirements.
- Partner-pleasing: Many of the most entry level accounting packages can help you integrate with some of your major suppliers and customers by letting you electronically exchange information safely over the Internet. “Say you’re a smaller supplier but you’re working with a big retail chain and they want you to provide certain invoices online. It’s usually easier to do that,” says McCabe.
- Financial fortitude: An accounting package will help you run your business more effectively from a financial standpoint. A spreadsheet approach doesn’t really incorporate all the things you should be doing when keeping track of your books, says McCabe. You don’t get any guidance about best practices. “The accounting packages that are out there have built a lot of that in, so even though you may not be very familiar with what you should be doing, unless you come from an accounting background, they can kind of guide you through a lot of the basics, so you know you’re doing it more professionally and more accurately.”
- Efficiency rules: You will most certainly cut down on duplicate data entry, which should result in significant time savings. And even if you rely on an external accountant or bookkeeper, there’s an upside to using a package because you can turn information over in a much better format. “A lot of these packages allow online access. If you use QuickBooks Online Edition, for example, and your accountant uses the same package and he can see your books over the Web. He doesn’t have to come to your office.”
Contact the editor
Laurie McCabe is vice-president, SMB solutions, at AMI-Partners, a New York-based firm specializing in the global analysis of IT, Internet, and Telecom trends in the small and medium business marketplace.
