Small businesses that have used Cloud accounting software, are spending the least amount of time doing their taxes, according to a new survey.
Conducted by accounting software firm, Xero, found that 10 per cent of small business owners who use Cloud accounting software spend more than five hours per month doing their taxes, in comparison to 30 per cent who use spreadsheet systems, 23 per cent that use desktop software and 17 per cent that use paper-based accounting.
The survey revealed that some businesses who are using desktop accounting software spent more than 20 hours per month doing their taxes.
About 55 per cent of respondents using Cloud accounting software stated they don’t lose sleep over their taxes during the end of financial year (EOFY), compared to just 39 per cent of respondents who use paper-based systems.
Cloud accounting users rated themselves the highest out of all respondents when it comes to financial literacy, with 60 per cent able to interpret their finances unaided, while those using paper–based systems had the highest percentage of respondents admitting they cannot read a balance sheet to save themselves.
“There is no doubt that the end of financial year creates added stress for small business owners,” Xero Australia managing director, Chris Ridd, said. “But the data also shows us that savvy business owners who switch from paper, spreadsheets, or desktop software to the cloud are able to significantly reduce admin and paperwork.”
The results also showed that about 60 per cent of small businesses were planning to take advantage of the Federal Government’s recent changes to immediate asset deduction, which allows businesses to deduct the full amount for equipment and other assets worth less than $20,000.