Why businesses need to ditch spreadsheets

Spreadsheets have been a go-to tool for small and medium sized businesses to track finances, manage data, and create reports for decades. However, there are limitations in using spreadsheets and it may be time to look for more advanced solutions.

We’re expected to see more change in the next 10-years than we saw in the previous 50-years. Companies running key aspects of their operations on spreadsheets will face extinction as competitors using cloud-software, AI, & automation are simply going to be faster and deliver a better customer experience with less overhead.

Click here to watch the video from our vCIO & Software Expert, Mark Kennedy about reducing spreadsheets with cloud-software and the improvements to data flow.

What are the growing risk of spreadsheets in the digital age?

Limited scalability

Spreadsheets are designed for small-scale projects and data management. When running a business, spreadsheets can become cumbersome, and managing data a challenge. You have probably created multiple spreadsheets to manage different areas of your business. This inevitably leads to data silos and confusion. As your business grows, the amount of data you need to manage will also increase, and spreadsheets will become unmanageable if they aren’t already.

Inefficient data management

When using spreadsheets, data entry is often manual, which can lead to errors and inconsistencies. Spreadsheets also lack data validation and verification features, so it's easy to enter incorrect data without realizing it. This can lead to inaccurate reports and decisions.

Limited collaboration

Collaboration in spreadsheets can be difficult, especially when multiple users are working on the same document simultaneously. Version control can become a problem, and it can be challenging to track changes made by different users. Furthermore, spreadsheets lack the functionality to manage workflows and approvals, which can slow down business processes.

Security risks

Spreadsheets are not designed to be secure, and they lack the necessary security features to protect your business data. Spreadsheets can be easily shared via email, and there's no way to control who has access to them. In addition, spreadsheets can be easily lost or corrupted. Often businesses running on spreadsheets don’t have backup or recovery processes in place to protect data. The data can also be easily corrupted.

Limited analysis

Spreadsheets are limited in their ability to analyze and present data. While they are useful for basic calculations, they lack the capability to perform complex data analysis and visualization. As a business owner, you need to analyze data from multiple sources and you need the ability to have it presented in a clear and concise manner. Spreadsheets are not designed for this purpose, and they can become a bottleneck in your business operations and financial visibility.

Alternative options

There are several alternative options available for businesses looking to move away from spreadsheets and get visibility of data from multiple sources. Here are a few examples:

Cloud-based accounting software and Enterprise Resource Planning (ERP) platforms

These software tools offer a centralized solution for managing financial data. As you can see below, real-time financial data is consolidated and at your fingertips via customizable dashboards.

ERP platforms also provide features such as automatic data entry, bank reconciliation, and financial reporting. By streamlining information flow through an ERP, you can better track job & project costs and deliver a better customer experience that can grow your business. See our recent case study for Inside-Out Construction company. Moving to an ERP they were able to gain the following efficiencies:

• Consolidation of software tools, eliminating six-figures in software licenses
• Over $50k in savings with expense management tracking
• Enable multiple companies to roll-up into a single profit-loss statement

Another company we worked with in the roofing industry, identified a $200,000+ accounting error migrating their excel data into an ERP platform.

Customer relationship management (CRM) software

Many ERP systems have integrated CRM modules. Additionally, there are numerous stand alone CRM software platforms as well that help businesses manage customer data, interactions, and sales pipelines. These platforms provide features such as lead management, contact management, and sales forecasting. It also allows for collaboration between team members and integrates with other business systems.

It is important to ensure that your CRM integrates with your cloud-based accounting software, removing the need for manual input.

Business intelligence (BI) software

Breaking off of spreadsheets and moving to cloud software such as ERPs and CRMs provide an opportunity to integrate BI software. BI can allow for complex data analysis and helps businesses make data-driven decisions. It also integrates with other business systems, providing a holistic view of business operations.

Conclusion

Spreadsheets were the first step up from filing cabinets. The world of business tools has expanded to a point where spreadsheets are now as useful as a paper ledger. One can still use either, but both are prone to errors, inefficient, and lack the necessary security features to protect business data. The latest generation of business tools, such as cloud-based accounting software and CRM software provide businesses with scalable, secure, and collaborative solutions for managing business operations. It's time to move away from spreadsheets and embrace these alternative options for a more efficient and effective business.

Want to break your dependency on spreadsheets and build a more valuable business?

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