Firstly, they rely on a lot of time-consuming and often tedious manual labour. It’s time that could be better spent advising your clients – or simply having a better work-life balance.

They are also only as accurate as the data that’s in them. When manual data entry is involved, there’s always the risk of error. If one number is input incorrectly, something is copied and pasted incorrectly or there is a formatting error, it can cause a lot of headaches down the line and be costly for your practice. You’re probably extremely careful for this very reason – but it’s a lot of responsibility for you and your staff, and even the best of us can make a mistake sometimes.

There are also security issues. Spreadsheets are often saved on physical computers, putting them at risk of hacking, corruption or damage. When spreadsheets are shared, it’s usually by email, making the data vulnerable — it’s only as secure and accurate as the person you’ve shared it with. When spreadsheets get bounced around various people, you can accidentally end up with multiple versions.

In addition to these drawbacks, another major reason you should reconsider your reliance on spreadsheets is that it could be preventing your practice from reaching its full potential.

When your practice is small, or you’re just starting out, it can be easy to stick with what you know. Spreadsheets can seem like a cheap accounting software solution. But as your practice grows, spreadsheets become exponentially more complicated and before you know it, you’re spending more time on them than you are running your business or talking to clients.

The good news is that there’s another way of working that solves all these issues while providing even more benefits, too. Imagine a single digital ledger where you only ever need to enter data once. And imagine that same data flowing through electronic systems, so you never have to duplicate versions, perform multiple checks, or create complicated formulas in Excel and still uncover mistakes. Cloud-accounting software, such as Xero, makes this possible – and it’s rapidly changing the way the sector works.

You’re probably already using cloud technology every day, whether you realise it or not. Perhaps you share files using Dropbox or ShareFile, or maybe you use online office software like Google Apps or Microsoft 365. Any system that lets you access your data remotely is a type of cloud system. Cloud accounting software works in a similar way. You use it just like normal accounting software, but with one important difference. Your clients’ accounts data isn’t stored on your own computer, where it could be lost, stolen or accidentally deleted. Instead, it’s stored remotely on secure servers, and you can access it from anywhere at any time – from a laptop, smartphone or tablet. It also gives you and your clients real-time access to their financial data.

Cloud accounting is generally easy to use and can make your business more efficient. It lets you provide basic accounting services more easily – and cheaply. This means you and your staff can spend more time on advisory services, consulting and new business development.

Wicklow’s Kelly Accountants is a family firm, established over 40 years ago. Aoife Kelly joined in 2007, becoming a partner alongside her dad John and mum Anne in 2012. Today, with her parents now retired, Aoife heads up a team of six in-house staff.

Until early 2020, the practice was operating the way it always had — relying on paper records, along with some desktop software. “We were very much paper-based, with clients dropping in a bag of stuff,” says Aoife. Then the pandemic hit, and Aoife realised that they needed to modernise – and quickly. The practice adopted Xero’s cloud-accounting software in March 2020. “We probably lived in a cocoon of ‘this is the way we’ve always done it’, but then all of a sudden your eyes are open to the possibility of automation. We’ve now moved to a nearly completely paperless system. It’s been practice changing — and life-changing.”

One of the biggest benefits of switching to cloud software is improved efficiency. “As a practice, Xero has probably saved us 30% in time,” says Aoife. “That’s from not having to key in information manually. I think it improves accuracy, too.”

Cloud-accounting software also makes it easy to work remotely – enabling greater flexibility and better collaboration. For Kelly Accountants, it allowed them to take on four outsourced partners to help with workload and increase their capacity – something they could not have done before.

Right now, you might be thinking: Ah, but my clients prefer spreadsheets. They don’t like change. In fact, your clients may well hate how time-consuming spreadsheets are, and wish there was a more efficient way to gather, record and store their business data.

Just because a client has always sent you an envelope stuffed with paper receipts once a year, that doesn’t mean they aren’t open to change.

Rory Williams, who has over 25 years of experience in the accounting field and now runs his own Dublin-based practice, has done more than his fair share of paper-based accounting during his career. “I remember one client where I was convinced they’d given me their rubbish bag by mistake instead of their accounts bag,” he says.

But when an accountant friend mentioned he used cloud accounting, his interest was piqued. “I’m always conscious of looking forward instead of back,” he says. Rory adopted Xero’s cloud accounting software in his practice in 2017 and has been gradually introducing his clients to it. “Sometimes they’re hesitant to change, but once they move on to it they all go, why didn’t I do this years ago? They’re loving it. It means clients have real-time, easily accessible information and are more in control of their business. They know what’s coming in and what’s going out. There are no surprises.”

Cloud accounting helps Rory to run his practice more efficiently – giving him and his staff more time to build quality relationships with clients. “You’re no longer the accountant that rings in once a year, does the year-end accounts and is then never seen until it’s time to send another invoice. It becomes a more real-time discussion with clients, which is obviously more beneficial. It helps you become part of the team with clients. You’re becoming their trusted adviser.”

You can integrate cloud-accounting software with other third-party apps – from project and time management tools to online payment systems. This lets businesses build an eco-system that works for them. “It’s not specific to one industry,” says Aoife. “There are loads of options for clients and they love it.”

It’s not just keeping existing clients happy that’s important — but attracting new ones too and future-proofing your practice. Cloud accounting can help with that. Attracting new and younger clients means anticipating their needs.

“If you’re in your 20s, 30s or 40s, you’re of the generation where everything’s on your phone or your iPad,” says Rory. “You want everything to be electronic. If you can’t talk the language of the people who are starting off in business now then you’re not going to have new clients. You need to be able to provide the service to them that they want.”

Change is never easy, but if you want your practice to continue to thrive well into the future, not to mention be attractive to potential buyers if you ever want to sell, it’s vital to evolve. So maybe it’s time to finally step away from the spreadsheets and embrace the power of the cloud. For more information visit our page on the CPA Ireland Digitalisation Hub.