The future of accounting is here, and it’s in the cloud.
Digital accounting platforms such as Xero have transformed the industry, unlocking vital benefits for businesses. Xero has become one of the world’s leading accounting platforms, with some 3.3 million subscribers as of 2022.
While accounting has become much-transformed by platforms like Xero, many businesses are clinging grimly to traditional accounting systems – but what’s the cost of being reticent to change?
Let’s explore why sticking to old systems might be more costly than you’d think, and why moving to Xero could be a game-changer.
Time is money
The adage ‘time is money’ rings true here, as it does so often in business.
The more time you spend manually entering data, generating reports, and reconciling figures, the less time you have to focus on other essential business areas. Accounting is time-consuming, especially for business owners handling their own books.
According to one survey, around 40% of small business owners said they likely spent over 80 hours on accounting a year. Even at £10 an hour, that’s £800, and Xero Premium is currently only £36 a month, working out at around half that cost.
Additionally, traditional accounting software often requires manual data entry and leaves plenty of room for human error, which could cost your business even more time and money in the long run.
On the other hand, Xero automates many of these mundane tasks, freeing up your time to focus on what matters most: growing your business. It’s slick and easy to use, integrating into your workflows, accelerating bookkeeping, and making submitting accounts to HMRC a breeze.
Ultimately, the Xero accounting cost is typically outweighed by its benefits.
The cost of limited access
Traditional accounting software is often limited to one device. Need to check a figure while you’re out of the office? You might be out of luck.
The cost of limited access can be immense, hindering to-the-minute decision-making.
Xero, however, provides real-time access to your financial data from any device with an internet connection.
Whether you’re in a meeting, at home, or even on holiday, your accounts are just a few taps away.
Missing out on automation
By sticking with traditional accounting systems, you’re missing out on the wealth of automation features offered by platforms like Xero.
From automatically matching bank transactions to instantly sending invoice reminders, Xero’s automation features can revolutionise your accounting process.
This leads to fewer late payments, reduced errors, and an overall more efficient business — all of which could save you money in the long term.
Staying ahead of the game
Finally, let’s not overlook the cost of staying still while the world moves forward. As more businesses shift to cloud-based accounting, those sticking with traditional methods risk being left behind.
Xero continuously improves, with new features and integrations regularly added based on user feedback.
By jumping on board, you’re ensuring your business stays ahead of the curve.
Embracing Making Tax Digital
Another crucial factor to consider is the UK government’s ‘Making Tax Digital‘ (MTD) initiative.
Launched in 2019, MTD aims to make tax administration more effective, efficient and simpler for taxpayers. Currently, VAT returns must be accounted for and submitted digitally using HMRC-approved software, but this is set to expand to other forms of tax.
Xero is built with MTD in mind. It allows you to maintain digital records of all your transactions and submit your VAT returns to HMRC directly from the software, ensuring you’re fully compliant with the new rules.
Additionally, Xero can help manage your cashflow by estimating your tax liabilities in real time, so there are no surprises when your tax bill comes due.
Moreover, you’re not just complying with the Making Tax Digital initiative but leveraging it to improve your business processes. Xero provides a more accurate, up-to-date view of your financial situation, which is essential for making informed business decisions.
Upgrade your accounting systems
The hidden costs of traditional accounting systems can sneak up on you, chipping away at your time and resources without you even noticing.
Conversely, digitising your accounting and tax calculations unlocks efficiency gains and peace of mind – plus, you’ll be able to analyse your finances in greater detail.
Rest assured, it doesn’t have to be this way – by moving to a cloud-based system like Xero, you’re not just reducing costs but investing in a more efficient, flexible and future-proof business.
We’ve helped many of our clients to get set up on Xero and make the most of its features. Get in touch to find out more.