Where are we as South African small business owners in terms of the software we are using…

It’s amazing how advanced we are in South Africa when it comes to some things, and then how far behind the rest of the world we are in other things. Our doctors are considered to be some of the best in their fields (mainly as a result of the extensive training they receive because of the poor facilities we have at state hospitals); our schooling system created the likes of Elon Musk and his genius creations; and our banking systems are considered to be in the top three safest platforms in the world, just to name three things to be proud of as South Africans.

How are we recording transactions?

And yet, in the 2019 State of the South African Small Business report (a report produced by Xero in partnership with World Wide Worx), it was stated that 23% of respondents still do their books manually (via spreadsheets or otherwise), and 55% are still using desktop solutions

This is definitely an area where we have either fallen behind the rest of the world, or are not understanding why we need to catch up.

Why are we not adopting cloud solutions, and specifically cloud accounting solutions?

Internet problems

The State of South African Small Business report mentioned internet connectivity issues as a big stumbling block, which is understandable. Fibre has only recently arrived in South Africa, and even though the prices are coming down, it is still expensive for businesses. 

We still rely heavily on ADSL with it’s very intermittent problems. LTE is also unreliable as transmitter batteries are stolen.Connectivity is a problem, however, we cannot afford to sit back and wait to catch up to the rest of the world, and for connectivity stability, to get online and in the cloud. 

We need to get moving, now.

Every month that we wait to move over, we slow down progress and miss out on the real-time availability of information, which could improve our business operations and profits.

I strongly believe that to be competitive, or to gain a competitive edge, small businesses need access to information, which means being online in all aspects of their business. Too many owners work in their business, and not on their business. 

By going online, it enables you to take on staff members and share information and spread the work, which will lead to time savings and efficiencies.

What are the differences?

We’ve drawn up a table to compare 

manual recording of transactions vs desktop accounting software vs cloud accounting software 

with pro’s and con’s to assist you in deciding which area you’d like to stay, or move to.
(5 stars being excellent, 1 star not so much)

No cost.

Comparative to cloud, but you’re stuck with what the package can do.

Comparative to desktop, but has huge scalability.
Back up process
Can be overwritten or deleted easily.

Regular backups required, corruptions are possible. Backups need to be tested regularly.

Software provider backs up information.
Number of users
Limited to user who created the spreadsheet.

No. of users limited to licence.

Xero – Unlimited
Others – Limited and then additional charges per user.
Can only access from the device where it is saved.

Can only access on the device where it is saved or via a server VPN.

Can access from anywhere in the world, on any device (connectivity dependent).
Audit trail
No record of what changed or who made the changes.

Does not allow changes, corrections only. if a mistake is made, additional work needed  to correct the mistake.

Every single change and by whom is recorded. Silly mistakes can be rectified easily.
Automation possible
Only in formulas.

Importing of some information possible, but the majority of processing is still required.

Full automation possible in software or via add-on apps.
Comparative information
Comparative information can be stored for as many lines and tabs you can add.

Only two years’ worth of information is visible at any time unless a backup is restored.

Real time access to information
Can be kept up to date if processed daily, but limited to the desktop where the information is stored.

Can be kept up to date if processed daily, but limited to the desktop where the information is stored.

Can be automated to update date and real time information can be accessed at any time.
If desktop is stolen, even with passwords in place, access to information is possible.

If desktop or server is stolen, even with passwords in place, access to information is possible.

Software is SSL encrypted. If desktop is stolen, information is not lost. 
Limited to the users spreadsheet knowledge, or shared public online tutorials if assistance is needed.

Limited to office hours of the software call centre and dependent on support package options and accountant availability.

Available 24/7 and unlimited. Whether it’s from the software provider or the accountant. 

What’s the outcome?

Sometimes a leap of faith is all that is needed to make a change, and we couldn’t encourage you more to make the move to cloud software.

In the end we 100% believe that all small businesses should be online and use cloud based accounting software. The cloud accounting software market is quite busy, and so because we make use of Xero and see them as being at the forefront of online accounting technology. 

As long as small businesses start using the cloud, we will be happy and excited to see how South African small businesses will grow.

What next?

If you are using spreadsheets – Sign up for a free trial and see the difference for yourself. The efficiencies gained far outweigh the extra (minimal) monthly cost that you will incur. 

If you are using desktop-based accounting software – Convert to a cloud based solution. Conversions are quick and easy.