Small businesses with fewer than 20 employees are the least likely to use an external accountant with many preferring to rely on accounting software, a survey by Mamut has revealed.

The research suggested that 77% of small companies use some form of accounting software and 76% believes that this improves their operational efficiency.

Over half (55%) of the companies questioned have a dedicated finance person to take care of the accounts, although 44% admitted that using business accounting software reduced the need to employ such a person.

“It is interesting to note that the UK‘s micro and small businesses are happier to do their own accounts, supported by software, than to use an accountancy specialist,” commented David Reynolds of the International Association of Accountants Innovation & Technology Consultants.

“The accountancy industry should consider whether this is because of lack of flexibility and innovation in their service offering, particularly as accounting software packages become more sophisticated.”

The research also suggested that small businesses are among the most prolific users of web-based business software applications, with 86% using some form of internet-based application.

The over-riding factor in deciding to use a web-based system appears to be cost, with 86% saying they would prefer to ’own‘ and install the software locally rather than renting it as a service.

But while this figure increased to 95% when it came to email packages, a considerable 59% still use web-based email, many of which are free of charge.

“The good news is that UK companies are happy with their business software and are attracted to using web-based services, even if this is simply a cost argument,” said Alan Moody, UK managing director for Mamut Software.

“What is clear is that they still want the advantages of installed software, like security and functionality. What they need is a model than realises the advantages of both.”