For some entrepreneurs, spreadsheets are the preferred method of managing company finances. At first glance, it’s easy to understand why.
Spreadsheets let you use multiple worksheets to keep track of many facets of your business, they’re capable of making complex calculations, and—perhaps most appealing to start-ups—they’re free to use and likely already loaded on your computer.
As nice as they sound, spreadsheets have some pretty resounding shortcomings that can complicate your accounting, severely limit your insights, and potentially cause irrecoverable damage at some point down the line.
Mistakes cost time and money
Accounting spreadsheet templates are quite often generated by inexperienced creators who don’t understand how to set up proper formulas. For example, you might set up a spreadsheet to calculate your net profit. But human error in spreadsheet creation is an inherent danger—one simple, missed keystroke in a formula can throw the entire document into chaos.
Mistakes can often occur on the user end as well: Templates are very often confusing and hard to use for anyone deciding to enter financial data on a prepared spreadsheet.
- According to research by the CEB Marketing to Small Business Leadership Council, the average small business owner spends 15 hours a week on manual accounting. Research by Sage reveals that Sage 50cloud customers spend an average of just 8 hours a week on accounting—in just one year, that’s a savings of 364 hours.
There’s also the issue of region-specific variables such as provincial tax rates and regulations. If you download a template created by an Albertan for your Ontario business, your numbers are going to be extremely inaccurate.
Professional accounting software is thoroughly tested for mistakes and oversights, designed to be as easy to use and resistant to human error as possible, and can be customized to your regional standards.
Capturing missed research opportunities
Accounting software does more than record financial figures. It will put those figures to use, providing you extremely valuable insights on sales performance, purchase trends, and demographic insights that can be used to help you cater to your customers, identify and correct missteps, and make better use of your marketing budget.
A professional look from professional software
The impression you give to your customers can determine whether or not they return. Invoices generated by spreadsheet can often look unprofessional, potentially leaving your customers second-guessing your operation.
Accounting software will print out branded, professional-looking invoices. And you can count on your software to age your receivables and alert you to any late payments—something spreadsheets certainly cannot do.
Avoiding tax nightmares
The problem of spreadsheet accounting goes beyond your own records. The Canada Revenue Agency isn’t forgiving of spreadsheet-related accounting errors and, in the case of an audit, your spreadsheet records might not have the information and detail that they need.
- 61% of new Sage 50 customers report that improved accuracy is the largest benefit to using the product.
A professional accounting software solution keeps track of all necessary information, retaining all of the records that the Canada Revenue Agency might need. In fact, professional accounting software will make sure that all the information sent to the Canada Revenue Agency is legible and in preferred order, reducing the odds that you’ll face an audit at all.
Peace of mind
Security is perhaps one of the biggest threats to using spreadsheets. The theft or destruction of your accounting records can represent a devastating loss to your business. Consider these disaster scenarios:
- Your computer is hacked while online.
- Your notebook computer is lost or stolen—along with your saved spreadsheets.
- The hard drive crashes.
- An employee makes an unauthorized copy of your spreadsheet containing sensitive customer information.
Desktop professional accounting software will have security safeguards, and cloud-based accounting software keeps your data safe on a highly secure server. This means your records will be safe and sound, no matter what.
Let go of Excel. Sign up for a free trial of Sage 50 and experience the difference that professional accounting software can make.