Why you should not be using spreadsheets for managing your business accounts

By Michael O'Brien - 20th Nov 2015

Find under: Advice

‘Spreadsheet,’ the word alone can strike fear into the strongest among us. Starting out in business or planning to get an idea off the ground there is an automatic assumption that you know, understand and can manipulate spreadsheets. Those of you that have been in this situation understand only too well how disadvantageous this false assumption is to running a successful business.

Why? Well, straight out of the blocks is the key advice that your business should generate cash as quickly as possible. In other words, get money in the door ASAP. The expression cash is king holds true here. There is no Excel spreadsheet that can raise and email an invoice for you.

True, the spreadsheets (if only the data was in one spreadsheet) contain the data but getting the data into the invoice template, making sure that you are invoicing for the correct amount and then printing /emailing the invoice is a time consuming and error prone task.

Also, all too often the copying and pasting from Excel into a word template looks awful and is a poor reflection on your company brand.

Why bother with this antiquated way of carrying out such a critical business function when online accounting software makes invoicing easy, error free and efficient.

I referenced error prone above. Spreadsheets were never intended to be an accounts production package but over time they have morphed into one and you should avoid this trap at all costs. Online accounting packages will provides checks and balances that help you spot errors which you can amend there and then.

Spreadsheets on the other hand don’t and you can make business decisions based on inaccurate information and any financial advisor, your accountant included, will tell you that this is not advisable.

It’s easily avoided. Your online accounting solution will facilitate the export of your up-to-date and most accurate accounting data. Now you can use spreadsheets for the one thing they are great at – analysis of the accounting data produced by your accounts package.

There was a time when it was perfectly ok to be chained to your PC. Prior to the Internet you had no capability to share data other than by downloading onto a floppy disk and mailing or delivering in person to your accountant.

In 2015 the chains have long disappeared and cloud based accounting systems mean that you can access your accounts and update them from anywhere. At home, on the road, in your office or sitting in your car waiting to meet a customer.

Yes, you can also access your spreadsheets in the cloud but all you’ve really done is bring those Excel headaches into the cloud with you.

One of the biggest issues facing small businesses is that the critical spreadsheets are normally held on the owner’s laptop and this is for the obvious reason of security. Taking annual leave is a nightmare.

How do you ensure that the spreadsheets are updated and that only specific data is exposed to your staff?

Any competent accounts solution for small businesses will allow you to restrict access to the data that is for your eyes only. Your staff can input the necessary data and operate the business as per normal.

Running your own business is tough enough. Being able to down tools and take a well-earned vacation safe in the knowledge that your accounts are in order is a big plus.

About the Author: Michael O'Brien

Michael is the marketing manager for Big Red Cloud. Apart from trying to demystify accounting software, Michael enjoys rugby, photography, good food and seeing as much of the world as possible.