Digital Accounting Systems for Sole Entrepreneurs

This is a research-based Bachelor thesis commissioned by CIPAS-Project to analyse digital accounting systems in the Finnish market, with a primary focus on cloud-based accounting systems. The systems must match sole entrepreneurs’ needs in addition to being easy to use and affordable. The purpose of this research was to recommend five suitable digital accounting systems in terms of feature availability and price to the commissioning company. This research is divided into theoretical and empirical sections. The theoretical section consisted of two perspectives that were essential to cover. The first part was from the sole entrepreneur’s perspective concerning Finnish legislation and taxation requirements. The second part introduced the concept of accounting information system and its transaction cycles, followed by digital and intelligent financial management as a broader view, including cloud computing and elements of cloud accounting as part of the modern integrated system. The empirical section was a combination of a qualitative questionnaire, desktop research of accounting systems’ webpages, and observation of accounting systems through their provided free trials. The information in phase 1 from the questionnaire and website analysis were retrieved simultaneously, followed by phase 2 of observation. Finally, the information from the questionnaire followed thematic analysis and the accounting systems selection was based on benchmarking analysis. The author used google search and sole traders’ suggestions to list all potential accounting systems, analyse, eliminate and benchmark until five systems were selected. As part of the research, the results from the questionnaire showed that most of the sole entrepreneurs operate in a service-based business and their common engagements are sales and payment invoicing, tax filing, and VAT reports. To meet sole entrepreneur’s needs, the author recommended 3 single-entry bookkeeping and 2 double-entry bookkeeping in a total of 5 digital accounting systems based on feature availability, easiness to use and affordable pricing. The selected accounting systems were ALVin, Holvi, UKKO Private Trader, Passeli Merit, and SimpleBooks. Each system has multiple packages based on the features provided and the involvement of an expert online accountant. Sole entrepreneurs must decide on one package based on their business needs and upgrade to a bigger package in case of business growth and more involvement of an accountant