According to new research
New research has found that despite only six per cent of small business owners thinking it’s not important that their financial advisor uses the latest accounting technology, a fifth (18 per cent) of accountants are still using paper ledgers – a 13th century tool.
There is a high expectation from small business owners for accountants to be up-to-date with modern technology, as technology is engrained in their own business management.
Three in five (61 per cent) burgeoning small businesses use digital software to manage their business, with the pros being that technology data loss can be avoided as data is backed up along with keeping data secure, according to 43 per cent per cent of small businesses surveyed. It is also seen by a quarter (26 per cent) as being more time efficient than when doing tasks manually.
In fact, technology dominates the top five things small business owners wish they had done differently in their first years of business. In a collaborative survey with Aviva, Xero found that small business owners wish they had got to grips with technology sooner, as owners admit they should have created a website (33 per cent), invested in better IT (29 per cent) and bought accountancy software (27 per cent) sooner than they did.
The survey also revealed that over two thirds (68 per cent) of small business owners said they have either, or would be more likely, to adopt digital accounting software if their accountant recommended it.
To encourage accountants and the small businesses lagging behind to move with the times, Xero has commissioned a renaissance artist to bring the ‘Father of Accounting and Bookkeeping’ into the 21st century, recreating the Portrait of Luca Pacioli by replacing his paper ledger and tools for modern-day technology to signal the next revolution in business management.
Damon Anderson, Director of Partner at Xero, comments: “Over the next few years, small businesses and their accountants will need to embrace digital or run the risk of quickly being extinct. Our report shows that one in ten small business owners and a fifth of accountants in firms still use paper ledgers – a tool that dates back to the year 1299 – with many losing hours to menial administrative tasks. It’s time to work smarter.
“The UK accounting industry is entering a new digital age, driven by unprecedented changes in accounting technology and a perfect storm of regulation from MTD, PSD2 to GDPR. We want to encourage practices to take the first step in ensuring they remain relevant by embracing the latest technology.”
When asked about the perceived benefits of going online, Xero’s Digital or Die Report finds:
- Cloud based accounting could save accountants 117.5 hours a year on average (15 days) by eliminating the time spent on administrative tasks – approximately £3,153.70 per year, per staff member.
- A quarter (23%) say it could save them more than half a day per week (4 hours).
Shaun Robertson, Director, Qualifications from The Institute of Chartered Accountants in England and Wales (ICAEW) added: “Some accountancy professionals fear being ‘left behind’ by the speed of change, which is why it’s so important to learn about the benefits, opportunities and challenges of new technologies.
“In some cases, technology such as AI may supersede human efforts, however, it does not replicate human skills and intelligence. We need to recognise the strengths and limitations of different forms of technology, and build better understanding of the best ways for humans to benefit from computers.