The Big Challenger to Sage and Xero

Do you know the big challenger to both Sage and Xero? It’s something called Paper.

Over 1 million businesses, about a quarter of all, use this method for their ‘accounting’. By paper I don’t mean Excel, I mean the real thing.

With half using Excel that leaves only about 30% using proper accounting software. So HMRC’s Making Tax Digital, starting in 2018 up to 2021, is in for a challenge, or perhaps it’s the business owner with the problem as MTD is hardly optional.

So should small businesses use accounting software?

It’s worth considering. The key benefits are a discipline, security, easier VAT returns and a lower cost year end. Plus hopefully some really useful information about how the business is performing, reported now, not 12 months late. Measure to Improve is a good maxim but first you have to Measure.

Paper is insecure, not confidential and easy to lose – not to mention time consuming, basic and not much use. Whilst Excel is better in many respects it can easily suffer from mistakes, like a row missed off in the additions. We’ve all done this at least once and it can be very embarrassing. We saw one recently where this mistake transformed the results massively and had badly misled the company, crucially delaying it from taking prompt corrective action to a major problem. Sadly that is still the one glaring fault with the overwise great Excel software – it’s not smart enough to warn you. An accounting system will avoid such a risk.

Nowadays software such as Xero is designed for users who know little or nothing about accounting - that’s principally why it’s been so successful and way ahead of Sage. Our experience is that it’s understood, easy, even sexy to use. Worth a look.

This entry was posted in Accounting by Caroline

Don't presume anything - if it's important

So first we had the long drawn out consideration of the EU Referendum, no it couldn't happen and no it shouldn’t and no it wouldn't but it did. We were bitten by the Brexit.

Just as we were beginning to come to terms with this 'surprise' we placed our bets on the US Presidency and guess what, another presumption bit the dust, in fact a whole string of them did, at all stages of the process.

So were they important - you bet. Did many presume too much - you bet.

If you own a business there's often one clear presumption which is important because it affects your profitability, income and value. That it’s not worth going to the trouble of producing quality Management Information such as monthly accounts. Do you want to bet?

Do you know your turnover, your order-book and all about what you sell - but of course. Do you know your profit margin percentage, how much net profit you made last month / year to date / compared with the previous year? Do you have a profit split between the key sectors of your business? Do you think that by measuring your performance you can improve it?

Maybe it's a good idea not to presume but to check it properly?

Anthony Pilkington

Managing Director

BookCheck Ltd