You may be surprised to hear that despite having so many different types of software at our fingertips, lots of businesses still rely on spreadsheets for data entry. They can be incredibly powerful, but software is a much safer, more efficient way to improve business processes.
When it comes to productivity, spreadsheets have a serious disadvantage. However it is usually only when business operations become more complex that software is used. Using accounting software from the start will help make your business processes easier & more streamlined. There is also less room for error with software, unlike with spreadsheets!
For some of the more basic business processes, spreadsheets definitely have their place. Here are the advantages of using spreadsheets:
The biggest area where businesses still use spreadsheets is for databases (not particularly secure), forecasting and budgeting (not the most efficient way).
When it comes to more complex business tasks, spreadsheets do become limited in their capability. The most common disadvantages of spreadsheets include:
When it comes to finances, accounting software, payroll software and HR software remove the need for manual data entry and organise data into one central system. Not only does this help to save business owners time, it also helps business-critical decisions to be made faster.
Software also has built-in analytical tools which can help give you valuable insights into sales performance, trends and also demographic information. Here are just some of the processes where software beats spreadsheets:
Professional accounting software such as Sage allows for fast data entry and retrieval, and fewer errors occur as the software helps you enter the right information in the correct format. Software can automatically upload information from other sources such as bank feeds and receipts, and reconcile this.
Accounting software also allows you to create and send invoices from one place, track payments and submit your VAT returns. Sending invoices out from accounting software also looks a lot more professional as you can add your own branding to a standard template.
Keeping a track of expenses is always difficult, particularly if you have multiple spreadsheets for different types of purchases. Receipts are very easy to lose and may be stored in several locations (particularly for businesses who employ staff). With accounting software, you can easily retrieve receipt details and store them by taking photographs of the receipts which are saved to the app. A simple, quick way to keep track of business purchases.
Spreadsheets still have their uses for budget planning, but with multiple versions created by different members of staff it can be really hard to know where you are at. It also takes a long time to trawl through spreadsheets and make sense of the data within them. With accounting software, you can easily collaborate with others in the business and run cash flow forecast reports from one central place. One of the main benefits of accounting software is the ability to view your finances in real-time, enabling you to respond quickly.
Unfortunately spreadsheets are unable to be submitted to HMRC, so accounting software is essential for this. With the ever-changing rules and regulations within HMRC, the software will be updated accordingly so you can rest assured your tax and VAT returns will be correct. All financial information will be sent securely from the software to HMRC, in the format they require. This reduces the chance of you receiving an audit.
Errors often occur when processing payroll using spreadsheets, which will not only affect your employees but also HMRC. Payroll software streamlines this process and is developed in a way to minimise the risk of errors. Again, like with tax and VAT returns, payroll software is updated regularly according to any changes in legislation. With payroll software, lost data is easy to recover and everything is kept completely secure.
If you are serious about expanding your business, now is the perfect time to transition to software. As expert Sage partners, the team at Reality Solutions can help advise you on the best solutions for your business. Get in touch today to find out more.
*This article contains general information in order to assist all of our customers and is meant for guidance only – there are no guarantees that the information we provide will be suitable for your particular needs. If you require specific assistance, we recommend that you seek professional guidance on your individual circumstances. Reality Solutions are in no way responsible for any loss or damage arising from any information contained within our articles.