As a small business owner, you probably use spreadsheets for many of your business processes. While they can be powerful tools, software is increasingly providing solutions to help you do these jobs more efficiently, safely and with stronger compliance.
In the past, small firms have tended to use spreadsheets as a default tool, and only replace or add to them with other software as the firm’s operations became more complex.
But as technology such as cloud computing has become more accessible, other software – including cloud-based accounting, payroll and HR solutions – are increasingly adding to your options to make your business processes slicker and easier.
Spreadsheets can have some serious limitations.
For example, various studies show that up to 88% of all spreadsheets contain errors, which can cause major headaches and waste your time and resources.
Furthermore, 35% of companies reported discrepancies in their most important spreadsheets.
In contrast, dedicated software is designed to reduce errors, speed up processes, and help you in areas such as mobility, cloud services, compliance and security.
When spreadsheets can be useful
For basic tasks such as inputting and organizing data, spreadsheets are still one of the most accessible, easy and intuitive tools.
They can make large amounts of data easier to view, manage and analyse on a computer screen. Plus, they allow you to create visual presentations via charts, graphs or tables, for easy viewing and interpretation.
Spreadsheets can remove the need for repetitive calculations as the program does that for you. By entering a formula in a cell, the total will update when you change the related amounts – the software makes almost any type of calculation automatically.
Liam Bastick, director at SumProduct, says: “The biggest areas where businesses still use spreadsheets are as databases, and for forecasting and budgeting.
“But more dedicated accounting software is gaining ground in small businesses for those who want to create financial statements and use visualization tools – the software does it for them.
When spreadsheets slow you down
One major difficulty with spreadsheets is that you must enter calculations as formulas, so you need to learn the correct formula for each calculation you need. Training for this takes time and some users still find them difficult.
If you enter a formula or data cell incorrectly, all calculations related to that cell will also be wrong.
Large spreadsheets inevitably have some input or formula errors, which can be time-consuming to find and lead to severe consequences if uncorrected.
Another problem with spreadsheets is that multiple users often need to collaborate on a single document.
You can share spreadsheets online, and providers are working hard to develop this functionality, but it has often not worked as well as dedicated cloud software.
For example, often only one user can change data at a time. This may result in conflicts or multiple versions of one spreadsheet. The more people using the data, the messier it can get.
People often still only use spreadsheets on their own computer or company server. If they make local copies, other users cannot access their changes. Also, that data can be lost forever if there is a disaster such as a fire.
With multiple users, you can quickly end up with conflicting documents and errors, hard-to-use templates and inaccurate or delayed analysis – collectively known as ‘spreadsheet hell’.
In contrast, professional cloud-based accounting, payroll and HR software means there is a single version of the truth.
How software can speed up your processes and make life easier
Cloud-based accounting, payroll and HR software eliminates complex calculations, manual tasks, and the monotony of spreadsheets by organising data into one central system. This enables business owners to speed up processes and make decisions quickly.
Professional software is also is tested for mistakes and oversights thoroughly to minimise human errors.
These benefits of using software can dramatically reduce the time you need to spend on manual accounting.
Unlike spreadsheets, software also provides built-in analytical tools, giving you valuable insights on sales performance, purchase trends and demographic insights, among other things.
This can help you service your customers better, identify and correct mistakes, and hone your budgets.
Seven important processes where software beats spreadsheets
1. Managing invoices
Compared to a spreadsheet, professional accounting software allows for simple and fast data entry and retrieval, saving you time and effort when creating invoices.
It creates fewer errors as the software helps you enter information in the right format at the right time.
Spreadsheets often have not been able to upload information automatically from other sources, such as your bank, and reconcile it.
In contrast, accounting software gives you everything you need to create and send invoices, track payments, get bank feeds, automatically reconcile with your bank, and calculate and submit GST returns.
Accounting software can also generate branded, professional-looking invoices, quotes and estimates to send your existing and prospective clients.
2. Capturing receipt details
If you keep multiple spreadsheets, finding information about expenses or suppliers can be difficult as you trawl through receipts, which may be stored in several locations.
In accounting software, you can retrieve that information and report on it easily.
Some software integrates free receipt snapping apps, which allows you to take photos of receipts on your phone and record transactions quickly and simply.
3. Managing budgets
While businesses still use spreadsheets for planning, many quickly find themselves in ‘spreadsheet hell’, with multiple versions and conflicts.
When looking to cut costs, you could trawl through your many spreadsheets and model wage and overhead data in them. But this takes time and is much easier to do in cloud-based accounting software.
Such software enables you to collaborate on the budget plan in a single, secure application.
This eliminates inefficiencies and security risks, as you no longer need to share multiple versions of sensitive information via email. You do not have to update multiple spreadsheets – you simply make changes once.
Accounting software is also designed to speed up the budgeting process, so changes take seconds rather than minutes, giving you more time to focus on your business.
As it’s programmed to reduce errors and duplication, software also allows you to combine and query the information more quickly.
The effect is a more dynamic budgeting and planning process, running cash flow forecasts and multiple scenarios quickly, with minimal training.
Accounting software also provides a real-time view of performance, enabling companies to respond rapidly to market changes.
4. Tracking payments
Most spreadsheets have not been designed to record payments and alert you to late payments automatically. But professional accounting software is programmed to do this, making the tedious job of tracking unpaid invoices a thing of the past.
Most spreadsheets do not yet offer automated bank feeds, which help you integrate income data from your bank and save long hours reconciling statements.
Accounting software does this, and allows you to record payment information against customer accounts automatically.
It also enables you to track invoice payments remotely via your mobile phone, which has been harder to do with most spreadsheets.
5. Submitting returns and keeping business records
Unlike spreadsheets, professional accounting software can submit your tax returns to HMRC for you.
It has compliance built-in and updated as rules and regulations change. It automatically retains all the records authorities such as HMRC might need and sends all the information in the right order, reducing the chance that you will receive an audit.
Accounting software is also designed to prevent errors and mistakes, making record-keeping less of a headache.
Finally, the theft, abuse or destruction of your accounting records from a spreadsheet could be devastating for your business. Cloud-based accounting programs keep your data safe on a highly secure, off-site server, which means it is always recoverable.
6. Scheduling shifts
Tracking and managing staff shifts in various locations can be cumbersome when it involves endless emails of multiple spreadsheets.
This is becoming even harder as more people work from home, especially as many spreadsheets are not cloud-based or mobile-friendly.
Professional cloud-based HR software solves these problems as it’s easy to use on any device and has one version of the truth. With it, you can create and edit shifts; track schedules, holidays and sick leave; and approve time-off requests quickly and easily from anywhere.
Meanwhile, employees can access everything they need – including schedules, payslips and company policies – log time, request leave, and check holiday that’s due.
HR software also offers more automation compared to spreadsheets, for example, allowing you to pre-fill hours with time-off data and merge approved timesheets in collective reports for payroll.
It gives you all the tools you need to organise your workforce remotely such as communications, reporting, asset management, and charts.
Conclusion on speeding up business processes
Small businesses need all the help they can get from technology. Providers are stepping up to the challenge by increasing the functionality, accessibility and affordability of their products dramatically.
While spreadsheets still have their uses, when it comes to reducing time spent on data entry, keeping accurate business records, and working anywhere and at any time, using software can really speed up your business processes.
That will leave you with more time to work on the things you enjoy, and add more value to the business.