In this digital age, it seems like every article on the internet wants to discuss the advantages and necessity of incorporating technology into absolutely every part of your business.
The rise of accountancy software
One aspect of technology geared towards businesses in recent years is the wealth of accounting software packages.Whilst there are many benefits and plenty of great software packages out there, as a small business owner you should also consider the disadvantages of accounting software. At Alexander & Co, we have your needs first. That’s why we have a list of things to consider when looking for accounting software. Accounting software can be useful for freelancers but for anything bigger an accountant must be hired to analysis the data from the software anyway. Software can however reduce the time your accountant spends on your books resulting in a lower fee and less work for your accountant.
Although many packages are aimed at those with little accounting experience, it can still be tricky at the best times when converting over. Learning the accounting terminology, the correct setup and layouts can sometimes be more difficult than the benefits gained from using it. As running your own business already comes with plenty of stress, trying to get your head around new accounting software should only be necessary if the pros outweigh the cons.
Maintaining your accounting software doesn’t just mean you need to continually keep up to date with the new updates. It also means upgrading all the separate equipment that goes with it. This can be anything from your laptop to your printer, or your internet connection to your backup drive. If you don’t desire to spend a large chunk of your time and money invested in keeping your equipment in compliance with the software, then it’s better to have a company help you with our accounts
Although many accounting software packages are fairly priced, the cost of using the software are not the only outgoings you will experience. Accounting software requires the minimum standard for computer use in regards to processor speed, RAM and hard drive memory. Keeping a backup of your data will mean you will probably need more space than an Excel sheet. You can also incur licensing fees in order to get upgrades. On top of this, if you simply can’t understand the software, you may have to pay someone to perform those tasks for you
Invoices and processing all the expenses in accounting software usually takes more time than simply logging the expense on Excel or ledger pad. If using a computer is not part of your daily routine, the overall time it takes to process daily financial data can possibly outweigh anything gained from the accounting software.
Over-reliance on computers
If your data is corrupted by a virus or your computer crashes, the chances are you will be unable to use your accounting software until the problem is fixed. This also means you won’t have access to any of your data until your computer is up and running again. Unless you have these files backed up, it means you will have to re- enter all of your information.
Although this may look contradictory to the previous factor, this point highlights how easy it is to make a mistake. Although it’s simple to make a mistake through writing numbers down on a spreadsheet, it is even easier to mistype a number. Entering all your accounting data into the software may result in irreparable errors, as it becomes a lot harder to trace the original error. However, with spreadsheets, tracking becomes simpler and faster.