It's Time to Let Go of Your Expense Tracking Spreadsheets
Small businesses often start tracking their expenses using spreadsheets, and it’s easy to see why. It’s not a difficult tool to learn, and it’s a heck of a lot easier than digging out your calculator. If you’re a one-person show, this approach is manageable. But after a while, the limitations of a manual process become clear, and it’s time to start considering an expense management system that’s purpose-built to manage your expenses.?
While it can be daunting to wade into the world of accounting software, there are benefits to be had for the savvy small business owner. With that in mind, we’d like to walk you through a few best practices on finding expense management software that works for you.
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What's holding you back from automation?
We’ve been there: you have a solution that’s worked for you from the beginning, and you have valid reasons for staying put. Here are a few arguments against moving off spreadsheets.
- Your investment:?If you started the company, you probably also started that spreadsheet. You’ve invested time in learning how to use it, and you don’t want to invest more time to learn a new system.
- The cost:?Spreadsheets are free, right? So what if it takes you time to update it? At least it’s not another bill to pay. ?
- No time to research:?Who has time to look into accounting software? Let alone the time to learn a new application and move all your data into it.
- No business case:?You don’t have time to frame up a business case for moving off the spreadsheet…possibly because you’re too busy updating the spreadsheet.
Learn more: Expense Automation Solutions Buyer's Guide
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Why expense software is worth looking into
Sure, you’re familiar with your spreadsheet. And it's?useful in certain circumstances—analyzing small sets of data, for example. But when it comes to tracking expenses over time, there’s a lot your spreadsheet can’t tell you that a simple expense solution can, like trends over time, who your most profitable clients are, or how you’re spending your money.
Your spreadsheet can’t notify you when someone violates your expense policy.?It doesn’t automatically enter expense data, spin up reports?or roll up data into a dashboard. Simply put, it’s not the right tool for the job. Here are some of the drawbacks of relying on a spreadsheet for managing expenses.
- Inconsistency:?Spreadsheets proliferate—they’re sent around in email and there’s no version control. That means you lack one true source for your data, and that results in data that’s inconsistent and inaccurate.
- Poor visibility:?Spreadsheets are terrific at storing raw data, but how do you quickly draw conclusions from that? It’s hard to get a handle on what’s important and what’s not.
- Inaccuracy:?It’s easy to make small mistakes that balloon into larger ones. Make an error in the data that’s entered, or in the formulas used for calculations, and your figures can be way off. A mistake can be as simple as using the formula for Sum instead of Average.
- Can’t spot trends:?Because the spreadsheet is constantly updated, you can’t get the historical view—which means you can’t spot trends over time. If you’re running a restaurant, it would be helpful to know which night is your least profitable in each season so that you can run specials to bring in the crowds.
- Aggregating data is a nightmare:?Without built-in version control, spreadsheets can be easily overwritten. Trying to get back to the “one true source” of data isn’t just time-consuming; it also takes time away from doing things that bring in revenue.
- No flexibility:?Try adding a column, a row, or a cell, and see what that does to your beautifully organized spreadsheet.
- No scalability:?When your business grows, you need tools that help you grow. Spreadsheets can’t do that. They can’t easily offer up visibility into spend or send you an alert about a late payment.
For more about how automation can lead to better spend management,?download the study.??
