It used to be that smaller firms used spreadsheets as their default tool, only to be replaced when the firm grew, and operations become more complex.
But spreadsheets have serious limitations. For example, studies have shown that up to 88% of spreadsheets have errors in that can cause massive disruptions, wasting both time and resources to fix. What’s more, 35% of companies recorded discrepancies in their most important documents.
As technology became more widely accessible, businesses started using cloud computing solutions, including accounting, HR, and payroll options, to make their processes simpler and easier.
Dedicated software helps to reduce errors, speeds up processes, and allows for improvements in areas such as cloud services, compliance, mobility, and security.
When spreadsheets work
Spreadsheets have their place and purpose, however. Basic tasks like inputting and organising data are still easy and accessible on spreadsheets. They also make it easier to view, analyse, and manage large volumes of data on screen, and allow for visual representation and interpretation of data via graphs, tables, or charts.
Spreadsheets also automate calculations, and businesses still use them for databases, forecasting, and budgeting. But dedicated accounting software also lets them create financial statements and use visualisation tools.
When spreadsheets don’t work
On the flip side, spreadsheets also slow you down.
One of the major downsides to spreadsheets is that you have to manually enter calculations as formulas, which means that you need to learn the formula of every calculation you need. The training is time-consuming and difficult, and some users never quite get it.
If you make an error in a formula or data cell, all the calculations linked to that cell will also be incorrect. Large spreadsheets are almost certain to contain input or formula errors, which could lead to serious consequences if not detected and corrected. Professional accounting, HR, and payroll software, on the other hand, are specifically designed to reduce manual tasks, like formula input, thereby improving accuracy.
Often multiple users need to collaborate on a spreadsheet. While you can share spreadsheets online, the functionality is limited compared to that of dedicated cloud software because online spreadsheets only allow a single user to change data at a time. This could leave you with multiple versions or conflicts in one spreadsheet. And the more people that use the data, the messier it gets.
People mostly only use spreadsheets on their company server or their own computer. If they make any local copies, others will not be able to access their changes. There are also risks of losing that data forever if disaster strikes. Multiple users mean you can easily end up with data errors and conflicting documents, delayed or inaccurate analysis, or hard-to-use templates.
Using professional cloud-based accounting, HR, and payroll software means there is only one version, and it’s an accurate one.
Another risk when relying on spreadsheets is one of non-compliance with regulatory and SARS requirements. Professional software ensures that your information is compliant with the latest requirements applicable to you.
How software speeds up processes and makes life easier
Using cloud-based payroll, accounting, and HR software eliminates the need for complex calculations or manual tasks. By organising data into one central system, business owners can speed up their processes and make decisions quickly.
Professional software is also thoroughly tested for any mistakes or oversights in order to minimise human error. The benefits of using cloud software can greatly reduce the time you spend on manual accounting. Unlike spreadsheets, software has built-in analytical tools that provide insights on purchase trends, sales performance, and demographic insights, to name a few. These insights allow you to identify and fix mistakes, tailor your budgets, and serve your customers better.
7 tip to supercharge your business decisions
Discover the seven powerful insights that can help keep your business healthy, wealthy and wise.
7 processes where software beats spreadsheets
Professional accounting software allows simple and speedy data entry and retrieval, saving time and effort when creating invoices. Fewer errors are created as the software ensures you enter the correct information in the right format, at the right time.
Spreadsheets cannot automatically upload information from other sources like banks, or reconcile it as required. Accounting software, however, provides everything you need to create and send invoices, get bank feeds, track payments, automatically reconcile with your bank, and calculate and submit VAT returns.
You can also use accounting software to generate professional-looking branded invoices, estimates, and quotes.
Capturing receipt details
If you have multiple spreadsheets, finding information about expenses, suppliers, etc, can be tiresome because you need to go through loads of receipts, which could be stored in various locations. Accounting software allows you to keep that information on hand, for quick and easy retrieval and reporting.
Some software integrates free receipt-capturing apps, allowing you to take photos of receipts with your phone, and capture transactions quickly and easily.
Some businesses still use spreadsheets for planning, and they often find themselves in “spreadsheet hell” quite quickly. When looking to reduce costs, it is possible to work through all your spreadsheets and model wage and overhead data in them, but it’s much quicker and easier to do with software because it allows for collaboration in the budget plan in one single, secure application.
This reduces inefficiencies and eliminates security risks, because you don’t need to send numerous versions of sensitive information by email, and you don’t need to update multiple spreadsheets – you simply make changes once.
Accounting software is designed to expedite the budgeting process – changes take seconds rather than minutes – leaving you extra time to focus on other business priorities. Because it’s programmed to reduce errors and duplication, software also lets you combine and query information faster, which results in a more dynamic budgeting and planning process, allowing you to run cash flow forecasts and multiple scenarios quickly, with little training.
Accounting software also offers a real-time view of performance, meaning companies can respond rapidly to market changes.
Most spreadsheets are not designed to record payments or to automatically alert you to late payments. Accounting software is programmed to do this, effectively negating the job of tracking unpaid invoices.
Spreadsheets also don’t have automated bank feeds, which help you to integrate income data from your bank and save many hours reconciling statements. Accounting software does this, allowing you to automatically record payment information against customer accounts. It also enables you to track invoice payments remotely via your mobile phone.
Submitting returns and keeping business records
Professional accounting software can submit your tax returns to SARS for you.
It has compliance built-in, and automatically updates as rules and regulations change. It automatically retains all the records authorities might need and sends all the information in the right order, reducing the chance that you will receive an audit. The software is also designed to prevent errors, making record-keeping infinitely easier.
Finally, the theft, abuse, or destruction of your accounting records is devastating for any business. Cloud-based accounting programs keep your data safe in a highly secure, off-site server, which means it is always recoverable.
Tracking and managing staff shifts in several locations can get frustrating when it entails endless emails containing multiple spreadsheets. This is even harder now that more people work from home, particularly because many spreadsheets are not cloud-based or mobile-friendly.
Professional cloud-based HR software solves these problems – it can be used on any device and holds only one true version. It allows you to create and edit shifts, holidays, and sick leave, and track schedules and approved leave requests from anywhere. Employees can also access all they need – schedules, company policies, payslips – as well as request leave and log time. The software also has useful automated features, like allowing you to pre-fill hours with time-off data, and to merge approved timesheets into reports for payroll.
It offers all the tools – communications, reporting, asset management, and charts – you could need to organise your workforce remotely.
Dealing with payroll
Handling your payroll with spreadsheets is a disaster waiting to happen and will affect relations with SARS and employees.
Professional, cloud-based payroll software streamlines and automates payroll processes and is designed to help you avoid errors. It allows you to pay your employees, automate tax calculations, and submit to SARS online, all without loads of training or the need for an in-house expert programmer.
Payroll software empowers you to intuitively:
- Manage pay as you earn (PAYE) tax
- Calculate medical contributions
- Check minimum wage payments
- Manage sick pay and parental leave
- Process student loan recovery
- Handle company cars and mileage
Using spreadsheets for payroll puts you at risk of theft, loss, or damage of sensitive personal information. Payroll software, on the other hand, uses the highest levels of security, and because it’s in the cloud, lost data is easily recoverable.
Small businesses need all the technological help they can get. Providers are starting to cater to smaller businesses by upping the functionality, accessibility, and affordability of their products.
Spreadsheets do still have their place, but when it comes to reducing time spent on data entry, keeping accurate business records, and working anywhere and at any time, using software can only speed up your processes.
Cloud-based software will give you the time to focus on what you enjoy most while adding more value to your business.
Recommended Next Read
“It’s fluid and painfully humbling.” Entrepreneur shares her view on the journey