SMEs (Small Businesses) addicted to spreadsheets

Ian Murphy for Business-Cloud.com writes: Accounting software company Intuit commissioned Opinion Matters to talk to SMEs about how they were managing their finances. After talking to 200 small businesses with 1-10 employees during July 2014, the conclusion was that SME owners were spending so much time on spreadsheets, it was bordering on an addiction. This reliance of spreadsheets to manage their accounting issues meant that they were ignoring easier option such as cloud-based accounting software.

Among the conclusions from the research were:

• Over 50% spend between 30 minutes and six hours dealing with spreadsheet issues such as understanding formulas and getting numbers to add up. This equates to over 1 week per year.
• Only 23% enjoy the financial side of running their business.
• 50% admit to putting off doing the books.

This last statement suggests that SMEs have not learned since a previous Intuit study in 2011. Back then 44% of SMEs admitted that they had either run out of cash or come very close to doing so in their first three years of trading.

For many new business owners the failure to get to grips with their finances is the most common cause of business failure, especially in their first year of trading. It is not just the balancing of revenue and expenditure but also issues such as VAT and PAYE which are challenging, with the latter two carrying draconian penalties should they be done incorrectly. Time spent on finances also prevents business owners bringing in the new work required to stay profitable.

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. Financial management should be quick and easy."

According to Opinion Matters, the top three things SMEs owners wanted to see in order to ease the financial management frustration was easier-to-use software, greater collaboration and the ability to access information from anywhere. By offering a cloud based solution that can be access from PCs, laptops, tablets and smartphones, QuickBooks Online, Intuit believes that they are able to meet these needs.

According to Rosalyn Hodgson, Director, BCAMS Limited: “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.