Stop Using Spreadsheets and Legacy Accounting Software as Business Tools
Many major financial firms and governmental organizations already got rid of spreadsheets for critical financial transactions years ago. However, a recent study found that over half (51%) of finance leaders still rely on spreadsheets (e.g. Excel, Google Sheets, Numbers, etc.) as they are seen as a cost-effective alternative to more complex and expensive ERP/CRM systems.
When asked about spreadsheets’ best features, many mentioned the easy-to-use interface and minimal training. Summing it all up, we get it. Spreadsheets are versatile, convenient, and readily available. But are they really the best business tool for accounting, inventory management, organizing, scheduling, and data analysis?
The answer is most definitely not. Your business might be actually stagnating because you still use spreadsheets. This article breaks down some disadvantages of using spreadsheets for your business operation.
Errors and typos are unavoidable because spreadsheets are compiled by humans
Mistakes can happen to the best of us, but even simple spreadsheet typos (like forgetting an operational sign) can be devastating for your company. That’s exactly what happened with Fidelity in their famous “Minus Sign Mistake” case. An employee forgot to add a minus sign to the company’s loss ($1.3B). Instead, the value went in as a gain, and the company paid it out to its shareholders. (Read more: Eight of the Worst Spreadsheet Blunders)
This isn’t just an isolated case. Some studies report that nearly 9 out of 10 spreadsheets (88%) contain errors. The bigger the file, the more likely it has typos or invalid formulas.
Hence, if your goal is data accuracy, don’t use spreadsheets. It’s easy to miss errors unless you continuously comb the document cell-by-cell.
Our experts recommend investing in an intelligent database or Master Data Management software that can quickly and accurately resolve errors or flag them for fixing.
At Sprinterra, we provide an advanced approach to managing data and modernizing IT landscapes with an uninterrupted view of your data, and analytics.
You can also opt-out to a custom-built ERP, which can be tailored to suit your business needs. ERP systems have automated reports and analytical tools and eliminate record duplication.
Spreadsheets have size limits
Theoretically speaking, businesses are eventually forced to spread their data over multiple spreadsheets because there is a limit on the number of rows and columns a spreadsheet can store. This may not seem a big problem until it becomes one.
That is what happened in the UK back in 2020, during the height of the pandemic. Nearly 16,000 cases of Covid-19 went unreported because Excel failed to capture all of the test data past the spreadsheet limit. As a result, government agencies received incomplete information and didn’t trace all who tested positive for the coronavirus, potentially endangering lives.
Of course, a situation like this is clearly an outlier. But spreadsheets do have limits, which is worth considering, especially if you’re using spreadsheets as a database.
Moreover, spreadsheets don’t integrate well with other applications, tools, and service systems. If an integration system doesn’t already exist, you’re out of luck, and you’d have to transfer the data over to the other systems manually.
To add to their limitations, not only do spreadsheets struggle with external links but there is also the potential for them to be exploited to reveal confidential information.
Spreadsheets often lack enterprise-grade security and encryption features for safeguarding sensitive data. Even if you lock your spreadsheet with a password, its inherent security features (or lack thereof) make it easy for hackers to access your files. Concealed code, hidden rows or columns, and flawed inputs are too easy to disguise.
But most importantly, sensitive information may end up in the hands of people that are not the intended audience since spreadsheets give access to a wide array of people. Using something like Excel to store your data locally makes you highly vulnerable to security breaches or other common IT problems.
However, when creating a customized ERP system, you can choose to securely store your data in the cloud, protecting it with more features like user authentication, encryption, and access logs. Team members can see an entire database or just parts of a record by logging into the system and leaving a track of changes.
Spreadsheets were never intended to be enterprise-level tools
None of the above is a spreadsheet panegyric. The application is great for calculations, scheduling, pivot tables, and other valuable functions. But you might have already outgrown it when you see that Excel is causing you to work harder, not smarter. Plus, your business can learn from incidents such as the COVID situation in the UK, as previously mentioned. If the health officials had used a decent Master Database Management or an ERP system instead of tracking vital statistics in a spreadsheet, they probably would not have lost some much more sensitive information.
To sum it up, if you are working with data and still using spreadsheets, we recommend setting up an intelligent database or custom-built ERP with Sprinterra. We will help you migrate your spreadsheets to a centralized, customizable platform with efficient data sharing, record tracking, user authentication, alerts, and enterprise-grade security.