It’s not only accountants who like spreadsheets. Many small business owners
also prefer them to more sophisticated and specialised applications.
‘My accountant has been trying to convince me to stop using Excel and start
using Sage Instant,’ says design consultant Jocelyn Masters. However, Masters is
not keen on making the change: ‘At the moment I know what I’m doing,’ she says.
‘I don’t want to do things differently.’ The time needed to make the transition
also puts her off. ‘I’ve got a business to run,’ she explains, ‘I can’t waste
time learning to use an accounting package.’
This perspective is not uncommon among small business owners – and it’s not
hard to understand why. ‘Everyone knows how to use a spreadsheet and people like
them because they’re easy to work with,’ says Martin Minett, a partner with
Hillier Hopkins and chairman of the UK 200 Group’s IT users committee.
Spreadsheets can be set up quickly and simply to use any term of reference you
choose and require very little specialist financial knowledge. There are a lot
of them out there: more than 300 million copies of Excel are installed worldwide
and Google recently introduced a free web-based spreadsheet, so the user base
looks set to expand even further.
Although ease of use, widespread availability and zero capital investment
play a large part in their popularity, they are not the only reasons why small
business owners like spreadsheets almost as much as the accounting profession.
‘A sheet in Excel looks like the page of a cashbook,’ says Minett and that
familiarity can be comforting for non-accountants. ‘Accounting packages can make
people nervous about their lack of accounting knowledge,’ says Minett. ‘A lot of
clients see accounting as something of a black art,’ he adds. So it can be
difficult to persuade them to make the switch, even when it’s in their best
This reticence is all very well in a small business, but when it passes a
certain point in terms of complexity or size and needs to approach the bank for
funding, or if the business makes the transition to limited company status, the
lack of a proper accounting system can become counterproductive.
‘We use spreadsheets to collect the information we need to produce year-end
accounts for sole traders who only need a statement of earnings,’ says Minett,
‘but if you need to produce a balance sheet and reconcile the bank, then it’s
far more straightforward and less time-consuming with an accounting
Online and on the ball
The way in which accounting and business applications are sold, delivered,
updated and maintained has also evolved. Although most businesses still opt to
acquire their software in the traditional way, organisations of all sizes are
increasingly likely to consider subscribing to software as a managed service,
rather than buying it like a commodity.
Online accounting applications are now available from a range of suppliers
including Liberty Accounts, Netsuite, Twinfield and Sage Hosted Solutions. They
give SMEs the chance to benefit from many of the advantages of using a
fully-featured accounting application, while avoiding many of the problems such
as capital investment, implementation costs and the need to commit to long-term
service licence deals; and all they need is internet access and a PC.
Time to convert
Converting from a traditional accounting package has helped Graham Jackson at
estate agents Jackson Maunders, to manage his business more efficiently, as well
as giving him greater control and flexibility.
‘Wherever I am, I can see everything I need as long as I have my laptop and
internet access,’ he says, ‘and because I get instant access to the information
I need, I’ve started to educate myself, which makes me a better businessman.’
He now starts each week by doing a trial balance and checking outstanding
debtors and creditors. ‘In less than two hours I’m up-to-date, ‘he says, ‘as
opposed to never being up-to-date and never knowing what’s going on.’
So, while it may not be quite as easy to access an accounting application as
it is to use spreadsheets, it has never been easier than it is today. As Jackson
says: ‘Accounting doesn’t have to be a black art.’
Kym Marie Cleasby who runs the Bird in Hand Hotel in Oxfordshire recognises
the benefits of a dedicated accountancy package. ‘The bank reconciliation is
fabulous in the package I’m using now,’ she says. It can easily bring up
everything or anything in the bank account, enabling her to search on criteria
such as a cheque number, an amount or a transaction.
‘It’s not complicated by sheet numbers or anything like that, ’she says
‘Whatever you do, you can always see the cleared balance in real time.’
Over the past few years, driven by competitive pressures and an increasingly
demanding user base, specialist suppliers such as Access Accounting, Iris, MYOB
and Sage have made an effort to use less accounting jargon and offer packages
that mimic many of the procedures commonly used in manual accounting. ‘It’s
important to be able to use software in away that suits the business, ’says
Cleasby. ‘Some packages force you to do things in a particular way, ’she adds,
‘but you need a certain amount of flexibility, even if you’re not an
As well as becoming easier to use, accounting applications have evolved in
other areas. Even the most basic system now provides significantly more than
earlier generations of ledger systems, without the accompanying complexity.
Specialist suppliers have broadened their offerings, and many now supply
applications that supplement their core accounting functionality with financial
planning and analysis capabilities. They also support e-business and provide
specialist tools for vertical markets.
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