Why SAGE is no good at all for your small business – does SAGE suck?
SAGE is one of the most popular accounts packages used by small businesses across the UK and worldwide. The SAGE Company are from the north east of England and seem to employ a considerable number of the population of Newcastle, together with sponsoring lots of worthy cultural and sporting locations and events. The software has been around for many years and is the first choice of a lot of small businesses when it comes to preparing their accounts. Afterall, SAGE instant accounting costs less than £200 and can be set up very quickly and easily.
Unfortunately, some people think it is utter and complete rubbish. The argument is that SAGE has been created by accountants for accountants. There are no easy ways of using it and it is by far one of the most complex pieces of software out there in the business world that could so easily be so much better. The main problem with SAGE is that in order to use it you need to be fully accountancy aware. This means that you understand how double entry book keeping works, how to produce profit and loss accounts, and what goes in a balance sheet. Whilst SAGE may claim to do all of this for you, the reality is that in fact it very often takes a chartered accountant to sort out your SAGE accounts for you at the end of the year in order to be able to submit your tax return and file accounts with Companies House. It is very important to understand this, that it isn’t just the case that SAGE is difficult, but SAGE is utterly and completely incompatible with modern day accountancy needs.
Let me give you an example. If I want to produce management accounts showing my expenditure on marketing for the last 10 years, I naturally expect to be able to go into my SAGE accountancy package and pull up a spreadsheet with a pie chart showing me this within a matter of seconds. I will be unpleasantly surprised to discover that this was virtually impossible to do. The problem is that SAGE instant accounting at the very least, only works for the year that you are in. the previous year’s accounts are all wiped off the system or stored as simply balance carried forward, rather than you actually being able to use them in any form of management accountant. This does mean that, very often, you need to be running not only SAGE accounting but also keeping a spreadsheet of your sales and expenditure in order to be able to do anything with the figures.
Secondly, not only are the figures entered into SAGE and subsequently disappearing from the screen after 12 months, but also if you make a mistake, because SAGE is in real time there is no way to go back and correct your mistake and remove the entry that you put in in the first place. This is to ensure, we presume, that in circumstances where an external accountancy firm or an employee are doing the accounts for a firm, there can be no hidden amounts stuck in the books or money stolen. Unfortunately for the small business, simply needing to enter data in order to use it to evaluate future business performance and expenditure, this is utterly useless as it gives you no chance to be able to go back and remove petty mistakes that may have affected the whole of your accounts.
A quick example of this is with VAT returns. Once a VAT return has been put together and the button pressed to create a VAT return, there is no way of going back and amending this without significant alterations to the system.
This clearly, in this day and age, is utter madness as so many different packages enable you to manipulate your data and use it as you wish. Whereas, SAGE simply displays it on your screen and expects you to use other programmes to manipulate it at a later stage.
So in conclusion, if you are a small business, do not, under any circumstances, get into SAGE. SAGE is there simply to point your business in the direction of an accountant at some point who will have to go through your various figures and extract the ones he needs in order to prepare your company accounts for tax and Companies House. You can do all of this yourself at very little cost, simply by using an Excel Spreadsheet, and external accountant, or alternatively if you are really small, simply to file your own accounts to Companies House using their own software which can also be used for the corporation tax return.
Preparing accounts is now extremely easy and SAGE, I think, is stuck back in the 1990s without any sign of any significant improvement. Its days are numbered and we suspect that it will go the way of various other innovations over the years and have probably a prolonged death before merging with something like QuickBooks.
Please note – the directors of Business Bus Stop accept no liability for opinions expressed in this article. SAGE have a right of reply to this article and it will be printed in full.