The traditional role of an accountant is changing. In previous years a small business would class a good accountant as one of the fundamental requirements when starting a business. Their support and guidance towards all matters connected with the set up and launch of a business was perceived as essential in order for a small business to be ultimately successful. The perceived importance of the role accountants play with small business has been increasingly bought into question as the internet has grown and developed. The advice that accountants used to charge for regarding company formation, company structure and VAT registration is now largely available for free on the internet. Furthermore, the rise in online accounting software has made it easier than ever for a small business to keep their company books in good shape. We wanted to explore why more and more small businesses are choosing to use online accounting software and how this has impacted the traditional role of the accountant.
Why are business owners using online accounting software?
Cost – When the accounting and bookkeeping world was inaccessible to owners of small business the large cost burden of having a professional accountant was seen as simply a core running cost of the business. The cost structures of accountants differ widely from per hour, fixed fees for defined work and some even charge by the minute for telephone calls. Whatever the cost structure having an accountant look after all of you small business financial affairs will be a significant burden to your cost and business profits. Basic software for accounting can be available from as little as 5 a month.
Time Schedules – A piece of software can continue working 24 hours a day whereas an accountant has set schedules and opening times. As a small business you will very rarely be working to a 9-5 schedule and therefore having the rigid nature of accountant opening hours can be frustrating. Even more so if a deadline is required that requires an accountants help and you are charged overtime for an accountant working out of hours.
Information security – Despite the likelihood of you signing confidentiality agreements with your chosen accountant the fact remains that you are disclosing private information regarding your business strategy and performance to a 3rd party. Whilst there can be advantages to this is the form of gaining 2nd opinion on company performance there is also a risk that this information get into the public domain. Software for accounting allows you to keep all of your confidential information inside the business.
Ease of use – Software for accounting has become very user friendly with many products available that do not require the user to have any accounting knowledge at all. This allows tradesman and sole traders to be able to easily to control of their financial affairs.
Improved business Performance – There can be real business performance advantages of taking control of the company finances as opposed to outsourcing them.
o Accountability – An obvious advantage of taking control of you financial affair is that there becomes greater accountability to deliver. Software for accounting allows small business owners to be much closer to the financial affairs than when they are outsourced.