A staple of business life for decades, the spreadsheet was adopted on a mass scale in the late 1980s and 90s alongside desktop computers. The fact that it is still used today is testament to the fact that it really was one of the killer apps of its time.
Increasingly, however, in the age of cloud-based software and connected devices, the spreadsheet and PC-reliant tools like it are being rapidly overtaken by advances in technology, leaving legacy business users at a competitive disadvantage.
Switching from spreadsheets to cloud accounting software allows small business owners to access more up-to-date figures for sales and cashflow, and view analysis and reports on a broad selection of other essential business performance indicators.
With a wider range, and more current information to-hand, cloud accounting can help business owners to make quicker and better-informed decisions.
According to a recent OnePoll study, just over a quarter (26%) of today’s small businesses use spreadsheets for their bookkeeping and accounting, with a similar number (25%) sticking with paper-based records.
All this now looks certain to change, as more and more business owners and managers use the cloud to connect key software and get a live snapshot of their financial position whenever and wherever they choose.
With the trend to cloud accounting taking hold, it seems unlikely that in ten years’ time, any busy professionals will still be using formulas, rows and columns to crunch their numbers.
Cheap and adaptable – the long reign of the spreadsheet
Looking back, it’s easy to see why start-ups and small businesses have looked to spreadsheets to manage their accounts.
Before launching a business, it was – and has remained – one of the default applications loaded on every PC and laptop. Little wonder then that when setting up a business, entrepreneurs would use it to produce financial projections, as well as draw up business plans and support bank loan applications.
Once trading, the spreadsheet often transitions to become a cash flow tool, used to log incoming and outgoing cash. Having been established as the financial management tool for business, it is easy to see why business owners and managers have stuck with the spreadsheet for many years.
As well as being cheap, the fact that spreadsheets are relatively straightforward for anyone to use has also been a factor in their longevity.
But in an environment where mobile apps and connected devices are commonplace, it’s clear to see why today’s entrepreneurs and small business owners are turning away from spreadsheets – and many digital natives taking their first steps into commerce will probably skip them altogether.
Cloud accounting – the spreadsheet’s logical successor
Designed and adapted for the PC generation, spreadsheets were never designed to work on a small mobile device. That’s why using them on a touchscreen is fiddly, impractical and frustrating.
In comparison, an online accounting app offers a flexible way to evaluate numbers, pull off reports and get a current view of bank feeds – at the same time giving users the ability to manipulate data however they need.
For a small business owner, the cloud also offers a more secure way to store information, especially compared with spreadsheets saved onto desktops or hard drives.
If a laptop is lost or stolen, no one can access the data unless they have a login to the online account. Likewise, if the computer is infected by a virus or malware, data is not compromised and business productivity isn’t affected as there’s no downtime. You simply switch to any computer or mobile device connected to the internet and you are back up and running.
From a business management perspective, this connectivity is key. Rather than logging in and out of applications, a cloud accounting solution has hundreds of add-ons that can be plugged in, handling everything from customer relationship management, service desk, trade counter and shop operations.
Better control for the small business
One of the biggest advantages of cloud accounting is that it provides small businesses with the flexibility to access data on the move and make decisions based on real-time information.
Users can get an instant snapshot of cashflow and even pay an outstanding supplier’s bill or send a customer invoice from a coffee shop.
More in-depth analysis and forecasts can also be quickly produced, such as running metrics to find out how well products or services are selling and generating reports that predict how much revenue the firm is likely to see this quarter.
The ease with which cloud accounting gives users access to useful analysis and up-to-date reports, can help business owners to react to developments faster and make better business decisions.
While some small business owners may be reluctant to move away from spreadsheets to what they perceive as a trendy, flash-in-the-pan technology, it’s worth remembering that this isn’t about keeping up with what other people are doing.
Rather, the huge uptake in cloud accounting worldwide reflects the flexibility, accessibility, connectivity and additional functionality it offers to small businesses.
For help on working out which cloud accounting best fits your needs, read ByteStart’s guide on How to choose the best online accounting software for your business.
Making life easier for business owners
Stacked up against its veteran predecessor, the Excel spreadsheet, the enormous added-value cloud accounting software brings to any small business is clear.
The ability to access cloud accounting from any internet-connected device and any location also paves the way for businesses to collaborate more effectively with accountants and advisers, giving a complete view of the firm’s accounts as they stand.
It is this aspect of the technology in particular that can really make a difference for small businesses, providing a crucial red flag when cashflow is headed in the wrong direction, as well as uncovering important new growth opportunities.
About the author
This article has been written for ByteStart by Gary Turner. He is currently, MD of the beautiful, easy-to-use online accounting software firm Xero, having previously worked as product group director for Microsoft and MD of the accounting, business software and payroll software solutions firm Pegasus.
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