To the more sophisticated small business owner, this can present many opportunities, including a reduction in accountancy fees for the work being taken back off the accountant. But how should a small business owner with limited IT, book-keeping or accounting skills expect to deal with this sea change in the way the industry is going.
Well, the answer is – you should not have to! If your business is not an office based business, or even if it is but you don’t spend most of your time looking at a screen, and you clearly, according to your accounting, do not have the budget to make your own time available, or to employ a book-keeper to first of all learn, then continually maintain, a Cloud accounting system as the means to deliver your data to your accountant, then this business model is not for you. If you are in that position and your accountant is insisting that you use a Cloud system, pay for it yourself, input all the data into it yourself and continue to pay them the same fees, then you can be certain that your accountant is more interested in their own bottom line than yours.
Don’t get me wrong, for many businesses this is absolutely the way to go. If you have the means and the will to maintain a Cloud system on a daily basis then there are many advantages to be gained. You can operate active cash management, credit control and payables systems and produce your own VAT returns. However, the key fact in this is that you first of all have to have the means and the time to maintain the system to a level that ensures it is a benefit not a burden, and secondly, you need to make sure that your accountant is not charging you the same fees when you are doing this work. As much as it may be sold as a benefit to your business, a benefit that justifies a monthly outlay of £30+ per month, if you are using the system properly it is unlikely that your accountant will have an acceptable claim that they will still have to do the same amount of work.
From an accountants point of view there are genuine benefits to be had from encouraging the right, able clients onto a Cloud based business model, mostly through efficiencies. What you may lose out in fees, say for producing a VAT return, you make back in available time to add value in other areas such as client service and business development, which may otherwise suffer from lack of attention during busy times.
Whatever your accountant is telling you, the headline selling points from Cloud providers are that for the “dynamic” business person you can “access your company information anywhere”, “create and send an invoice from your iPad when you’re sitting on the beach” and various other suggestions which may paint the perfect image of how a forward thinking young business owner wants to run their business. But the reality is very different and many people get influenced by these sales tactics and sign up to a monthly payment to use a reasonably complicated system without really thinking about whether it is the best thing for them and their business.
The key fact is that a Cloud accounting system is only as good as the information that is put into it. If you don’t have the time or resources to do this (and for the average successful small business we are talking about at the very least a daily part time job here, so the wage cost for employing someone to do this effectively must be considered) and the nature of your business is such that you do not intend to ever be in a position when you will, then you should not feel bad or unsophisticated or “not keeping up with the times” if you want to continue to run your business by filing your paperwork and giving it to your accountant to input to their system on a regular basis. At the end of the day, that’s what they are there for, to handle the book-keeping and financial tasks that you can’t do yourself.
So in an ideal world all small business owners would be able to run a Cloud system effectively, meaning their accountants will have more time to add value in other areas, and Cloud providers will make loads of money and continue to provide us all with excellent systems, but common sense has to prevail and the current reality has to be accommodated.
At Steedman & Company, we use most of the mainstream Cloud systems on a daily basis and we have clients at various levels of sophistication, but we would never pressure sell a system to a client that does not want it or is not capable of using it. Whichever business model works best must prevail, regardless of how impressive the technology is becoming.