SPREADSHEET WOES DETER SMES FROM MANAGING THEIR FINANCES
- Intuit QuickBooks research reveals the UK’s love/hate affair with spreadsheets
- SMEs find them annoying… yet can’t resist using them
- SMEs waste an average of one week a year on spreadsheets
Intuit QuickBooks, global leader of online accounting software for small businesses, reveals the UK’s small businesses are stuck in a love / hate affair with spreadsheets. The majority of business owners questioned find spreadsheets annoying, yet more than half fail to resist using them to manage their business’ finances.
The research, conducted among 200 UK small businesses by Opinion Matters on behalf of QuickBooks, suggests overreliance on inefficient spreadsheets is distracting SME owners from actually running and growing their business. Half the respondents admit they waste anywhere between 30 minutes to as much as six hours a week dealing with spreadsheet issues such as understanding formulas, getting the numbers to add up and keeping version control; this equates to an average of one week a year.
Unsurprisingly, just twenty three per cent admit to really enjoying the financial management side of the business, but more concerning is that over 50 per cent are frustrated that they do not have enough time for the important things, like spending time with the family and growing their business. However, despite poor financial management being one of the common reasons businesses fail, a worrying 50 per cent admit to putting off doing the books. In a separate study Intuit QuickBooks carried out, 44 per cent of SMEs had either run out of cash or come very close within the first three years of trading.
Rich Preece, VP and MD of Intuit UK commented: “No-one starts their own business because they want to spend more time doing the books. Yet many seem to be stuck in a cycle of spending hours each month getting annoyed and frustrated because they’re using spreadsheets to manage their finances. It doesn’t have to be this way. Financial management should be quick and easy; it should be more about gaining insights and adding value to identify new opportunities. It shouldn’t be a hassle.”
“As a small business owner, it’s imperative that you get an insight into how your business is performing, particularly into cash flow. Spreadsheets just weren’t designed for this; you need to be an accounting wizard to get the most from them. Business owners need to be able to manage their finances on the move, collaborate with their accountant or bookkeeper, and have all their financial management tools – such as payroll and receipt processing – in one place.”
“When I first started out, spreadsheets seemed like the obvious way to keep track of my income and expenses. I also used Word to create the invoices I sent out to clients. But as my work grew, it made sense to move to accounting software. Now I can generate invoices faster, and I don’t have to re-enter all the details into a separate spreadsheet to record my income. What’s more, I became VAT registered about a year ago. My VAT return takes about five minutes each quarter, because the software tells me exactly what to enter into the form,” said John McGarvey, Copywriter and Content Strategist, John McGarvey Ltd.
Rosalyn Hodgson, Director, BCAMS Limited, commented: “We’re a big supporter of accounting software and see a cloud-based approach as the future rather than spreadsheets. It improves accuracy and is also a major time-saver. For example, financial records are automatically updated and you can see your profit & loss, find out who you owe and who owes you and calculate your VAT at a touch of a button. You can also directly link it to your bank and collaborate with your accountant much more effectively, so they can verify information instantly at no additional cost. As such it benefits everyone involved in the accounting process.”
The top three things SMEs owners wanted to ease the financial management frustration was easier-to-use software, greater collaboration and the ability to access information from anywhere.
“Some respondents referred to spreadsheets as a necessary evil but many have already discovered that’s not the case. By ditching spreadsheets and using financial management systems, SMEs can take the pain out of financial management. In developing and evolving QuickBooks Online, we’ve worked extremely closely with SMEs to create a platform which allows them to collaborate and work more effectively with their accountants, while enabling them to focus on what matters and why they set up on their own in the first place – doing what they love,” concluded Preece.