Many businesses use Microsoft Excel in their daily operations. The spreadsheet program can be helpful for a number of tasks, and is a reliable, practical choice for many professionals. The problem is that the effectiveness of the Excel spreadsheet really depends on how it was made and the data it contains. If one is poorly made or includes errors, then it will provide little to no benefit. In some cases, a badly crafted spreadsheet could actually cost a business money.
What’s Wrong with Excel for Accounting?
Maybe you have been using Excel for accounting purposes for years, or maybe you’re a new business owner looking for an easy and affordable way to handle the books. Before you start (or continue) to use Excel for your finances, there are some issues you should be aware of, that could cost your business money.
You Must Be an Excel Expert to Make It Work
Excel is a commonly used program, so much so that even novices use it for their everyday tasks. The problem is that the software requires an understanding of a programming language to be effective – something most people don’t have the time to learn.
Starting a New Spreadsheet Takes a Lot of Time
Excel isn’t specialised. It’s a general purpose spreadsheet solution that was created for a variety of applications. This means you’re required to set up a new spreadsheet to meet your needs every time you use it. If you want to track invoices or expenses, just getting started can take a lot of time.
You Must Have a Plan Before You Use Excel
It’s crucial to have a plan before you dive into Excel. As mentioned above, the program isn’t specialised, so you will have to know what your goal is and what data will be required from the start.
Excel Does Not Provide an Audit Trail
It’s easy to edit Excel spreadsheets, but it’s difficult to know who is making the changes. That’s why audit trails are nearly impossible to find with the program. What if someone entered $100 instead of $1,000? That could lead to major financial issues later, and you may have no idea who is at fault.
Excel Does Not Integrate with Business Applications
Excel does not integrate with other popular business applications, which means you may have to manually import data and work across two programs to complete related tasks. Many other accounting products offer hassle-free integration that can save you a lot of frustration later.
Transaction Tracking is Difficult with Excel
It’s not easy to track transactions with Excel, as it does not recognise double entries.
Finances Done the Right Way
One of the best things you can do for your books is to ditch Excel and start using specialised accounting software, made specifically for financial tracking and planning. If you have questions, contact Jonathan Grant Accountants. Our professionals can provide sound advice and recommendations for your business’ financial future.