Fewer than half of Canadian small businesses use financial management software, according to a recent survey done for a software company that sells accounting solutions.
Forty-three per cent per cent of the 960 SMB respondents to the survey done for Intuit Canada said they use some kind of on premise or online solution for tracking income and expenses, the company said Tuesday.
The good news is that’s up from 37 per cent from five years ago. The bad news is that’s still less that half of the survey group.
The other way to look at it is that the numbers suggest there’s only been a one per cent growth in the use of sophisticated invoicing software by SMBs in the past five years.
That’s not disappointing, said Richard Blitz, Intuit Canada’s product manager for the online service. “It is important for businesses to use what’s right for them, and sometimes the answer is a ledger.”
“But I also recognize this is not a transition that is going to take place overnight.”
Twenty-three per cent of respondents said their firm uses only spreadsheets, 12 per cent said they have a manual way of tracking finances, nine per cent parcel it out to an accountant or bookkeeper and six per cent use an online banking solution.
Intuit makes QuickBooks on premise software and QuickBooks Online.
Richard Blitz didn’t have a break-down of how many respondents represented small versus medium businesses. However he acknowledged that it is likely more mid-size firms use financial management software than small businesses.
The biggest impediment to companies adopting financial management software is getting away from what they’re using – in other words, habit.
“As a small business starts to grow, people build a system that works for them at the level they’re at. It has tremendous amount of inertia behind it, so the pain of continuing to use that system has to be greater than the pain of switching before people will make that switch. People will put up with a tremendous amount of pain in the name of not having to learn something new.”
“Cracking the non-consumption nut is traditionally been very difficult,” he added, “and I think the smartphone and tablet is starting to help with that. As people get used to the idea that you don’t have to be at a computer to bring order to your business, that there are other ways to get the same benefit … that is really affecting the way young entrepreneurs think.”
As a result, Intuit thinks, SMBs may be increasingly drawn to online accounting solutions.
If so, Blitz said, security won’t be the biggest roadblock. The degree of difficulty in transferring company data to a cloud service will be a major limiting factor, he said.