In preparation for the upcoming Heavy Chef masterclasses in Cape Town and Johannesburg, Philip van Zyl discusses why small businesses are better off adapting cloud-based accounting systems.
Six reasons to consider a cloud-based accounting systems for your small business
Browsing the results of a recent survey of South African businesses recently, one stat made me really sit up and pay attention. The report is titled “How Technology Is Reshaping South Africa’s Small Business Economy”. The result that got my attention is that the majority of small businesses (83%) still use spreadsheet tools like Excel to run their business accounts, most still use printed invoices (73%) and flash drives to transfer documents (56%).
As a small business owner and entrepreneur myself, I know that Excel was useful for me in business plan stages, showing projections and all that good business plan stuff. And it was a logical next step to continue to use a spreadsheet to capture my business “actuals” - which then becomes the accounting system.
When we combine the fact that most entrepreneurs and small business owners don’t study accounting in any way or form prior to starting their business, and not knowing the power and simplicity of what is now available in cloud-based accounting systems, Excel remains the default indefinitely. No longer.
When we consider that the monthly cost of awesome cloud-based accounting software is pretty low (with special offers for SA businesses like this one here), together with the following business tips, the question might be more “why am I not using a cloud-based accounting system”?
Business Tip 1: Understand opportunity cost
You may feel like you are saving money by spending your evenings sorting boxes of expense slips and capturing the details into Excel. And manually capturing your bank statement lines into Excel. That may be the time you should be spending with a loved one and use a cloud-based accounting system and related app where you can simply photograph slips and click submit.
Business Tip 2: Mistakes happen
That is unavoidable. Even as an Excel ninja. But knowing how to spot them and easily fix them is key to saving time and having accurate data in real-time. Spreadsheets allow for more mistakes through broken or skipped formulas and the manual nature of posting and capturing with limited built in checks for accuracy.
Business Tip 3: Automatic bank feeds rock
Much of your business health is measured by the data that comes through your bank account. How much money is owed to you right now? How much have you spent this month? If you are relying on manually downloading bank transactions and pasting them into Excel you will get behind when things get busy. The better cloud-based packages have automatic feeds from just about all SA banks. Tick.
Business Tip 4 Real-Time Advice
Get real-time advice from a virtual CFO or other advisor of your choosing, whenever you need it. With a shared online platform that has information that is current as of today, your reports are living reflections of your business health. An advisor, shareholders or anyone else can log in at the same time as you, from anywhere in the world, and you can discuss and view the same data at the same time. Awesome for making the right business decisions.
Business Tip 5: Manual invoicing sucks.
Copying and pasting into a Word doc for a few invoices can work. As soon as you start scaling and sending out invoices and customer statements, get onto a cloud-based accounting system.
Business Tip 6: Desktop accounting software is not the future.
You may think you are saving bucks by using that old version of whatever, but consider two important things. If you don’t have backups off site you can lose everything. Gone. The second thing is that if you want to send out an invoice one evening or at a client’s premises from your phone, your ability is sitting back at your office.