According to a report published by Xero in 2017, 18% of accountants are still running ledgers on paper.
That got us to thinking: if almost one fifth of accountants are using such an outdated method, just how many businesses are reliant upon that data? How many are experiencing a time lag, seeing numbers months later? How many are being tripped up by avoidable errors? Or flattened by cash flow catastrophes?
The answer? Too many.
It’s time we said “out with the old approach, and in with the new!” which is why we wanted to pit them against one another and, in this blog post, show you why there’s only one winner.
The old (and boring) approach
When we talk about the old way of doing things, we’re not exactly blowing dust of an abacus and asking a crotchety, tight-fisted miser if we can throw another lump of coal on the fire.
No, the old approach to accounting is still, for many, the only ‘modern’ approach they know. Unwieldy, error-strewn Excel spreadsheets, or messy stacks of paper, all contributing to an inefficient workflow
This approach tends to be done in bulk, often yearly, sometimes quarterly at best. Receipts and invoices are usually kept, but not in order, and the entire process is carried out months after the fact. This means it can be very difficult to remember what happened, and you’ll feel distanced from the information.
What’s more, taking this approach to accounting and bookkeeping only really has one goal, and that’s compliance. It’s far too late to act on opportunities or – more importantly – guard against threats.
That’s why you need to step away from the spreadsheets and embrace a more exciting way of doing things.
Now: The tried and tested approach
Today, thanks to the cloud, you have a wealth of information at your fingertips, anytime, anywhere.
Software such as Xero and ReceiptBank allow you to keep on top of your business financials in bitesize chunks – no more rummaging through boxes and files looking for paper records at the end of the year.
Instead, everything is kept up-to-date with real-time bank feeds and seamless data extraction, which makes decision making more effective, and helps keep costly errors at bay. Not to mention the fact that you can wave goodbye to manual data entry, and save yourself a bunch of valuable time.
And by taking this approach to accounting, the goal is so much more than simply complying with HMRC. You’re giving yourself a platform upon which to grow and develop your business. You’ll be able to dive deep into the data, spot trends and obstacles, address cash flow challenges, and identify opportunities to drive forward – all while staying several steps ahead of the competition.
But that’s not all. There’s one often overlooked aspect of Xero, and it’s part of the reason why we still love it after all these years. It’s more fun!
Seriously. Where the old way was all about stressing over tax deadlines and wondering where you put that shoebox full of fuel receipts from Q2, this way makes accounting and bookkeeping much more enjoyable. You get to see the fruits of your labour in real-time, and that’s both incredibly exciting and gratifying. Just ask us… we’ve been using Xero for 8 years now and it’s helped us and our clients achieve amazing things.
Let Raedan show you the (Xero) ropes
If reading this post has you ready to take that all-important first step towards cloud accounting, let us take you the rest of the way!
Head over to our Cloud page on our website to read more about the tech we use and how it can make things easier for you and your business.
What’s not to love!? Xero is a fantastic platform and if you’re serious about using the numbers in the business, then Xero is that first step – why not take it?