Usually the answer is that they don’t have enough volume, don’t like the available software and don’t want to deal with the never ending upgrades, which also results in additional hardware and software costs.
Once they answer me, my response is usually, “Stop it. Now. Save yourself the time, and aggravation.”
I can say this because I have lived through the use of column pads and pencils. And lots of erasures. Then we evolved to spreadsheets. And, then, we got accounting software. And now, we have a lot options. None of which should be a spreadsheet that you do by hand.
Here’s a few of the reasons why you should make the New Year a time to bring your accounting into the 21st century.
· Errors! I have rarely ever seen a spreadsheet of transactions, etc that was error free. You missed something, a wrong formula, cell reference errors….
· Time – it takes way too long.
· Actually, the list would be way too long if I listed the negatives, so I’m not even going to waste time. Just doing what I recommend to others – Stop.
Because I really don’t believe in perpetuating negativity, here are the more positive reasons, in no particular order, that you should have up to date accounting software, regardless of your size and transactions.
1. Most banks and credit card companies will feed directly into your software = less work for you. You will still have to reconcile but your posting time is significantly reduced.
2. Having access to daily cash and revenue reporting – not only do you have a better idea of your financial position, but you also stand a better chance of heading off fraudulent charges when (not if) they happen.
3. Better reporting – why wait until the year end. Anyone wanting to improve their financial health will need accurate and timely numbers to be able to make decisions, adjustments and also to measure their progress.
4. Your tax preparer will be much happier with you. While this is unlikely to reduce your tax preparation costs, you could see better quality because they have more time to review rather than recreate your (incorrect/incomplete) work.
5. There are really great, easy to use options out there, a lot are cloud based. Some are actually free.
6. If you go with cloud based offerings, you are not limited by your computer hardware. Just make sure you have a secured modem and router. The cloud software companies update their software and you don’t have to do anything. And, you can see your accounts 24/7, wherever you are, via computer, cell phone or tablet.
(I could keep going on about cloud based services, but that is another topic for another day. If anything here struck a chord with you, feel free to contact me for more information. )
We all have a finite amount of time and energy. Why spend extra time and energy doing something that could be done in for you in fraction of the time that it took you to do by hand input? To put another spin on it – add up the time that it takes you to do by hand and multiply that by what you value your hourly rate to be. Considering that the national average for bookkeeping is $66 per hour, this would have to be your minimum rate. Once you have your number, what would you have rather spend that money or time doing? Even half of that time, spread out over a year, I suggest would give you greater happiness than sitting at your computer, doing something that you clearly don’t want or like to do.
I would say, make it a goal this year of doing less of the input and use the data to make better and faster decisions. And, even better, doing something that makes you happier.