Accounting Management tips

Accounting on a spreadsheet, a bad business decision!

Due to a lack of means, small businesses often have the reflex of starting their accounting with an Excel file. Is it really the most profitable choice?

At first glance, a spreadsheet may seem like a good solution to manage a business’s accounting: it’s affordable, easy to use, etc. You already know how to use it, so why not! The choice is easy.

However, short-term convenience is rarely the right solution: A word of wisdom that is especially true when it comes to your company's figures.

01Working on Excel is a risky bet

By setting up your own financial system you are exposing yourself to significant business risks. Why? Because each formula entered manually represents a risk of error.

Managing your SMB’s accounting with Excel is like doing acrobatics without a net: Any miscalculation can have serious consequences.

In accounting, even a tiny mistake can have major ramifications. Imagine the problems that could result from filing erroneous financial statements or inaccurate government reports. How about business decisions made based on the wrong figures?

Of course, using accounting software does not necessarily mean that you are completely safe from mistakes. However, a good application acts as a guide that enables you to automate the work: No manual formula to enter or calculation to make on an assortment of Excel sheets.

02Your time is precious

Let's say you succeed in creating THE perfect Excel file for your business’s accounting. It will be smooth sailing from now on, right? Well, not really. Tax rules change, accounting practices evolve. An accounting system should evolve at the same pace.

In this context, why waste time updating a homemade Excel file when there are tools on the market that meet your exact needs and are constantly updated by experts?

Your time is too precious to waste fighting with an Excel sheet. Focus on activities that create value. As an entrepreneur, that's what you do best!

03Is an Excel file really less costly?

It may be counterintuitive, but a free (or almost free) tool is not necessarily the most economical solution.

On the one hand, if you take price alone into consideration, many accounting solutions are available on the market at very good prices. Some of these solutions, like Acomba for example, are even offered at a discount for start-ups.

But above and beyond price, you also have to consider the efficiency gains that can be made from specialized software. Here are a few functions that are difficult to reproduce with an Excel file:

  • Access management
  • Budget monitoring in real time.
  • Automated posting of transactions
  • Simplified management of your inventory.
  • Reports and analyses.
  • Invoicing and receiving payments.

Add up the costs and you will see that when you make full use of the tools offered by your accounting, invoicing, inventory management or payroll management application, your investment will pay for itself quickly.

04More than accounting software

Today’s applications are no longer simple accounting tools. They are genuine management assistants. They cover a wide-range of aspects of your business and can be used in the majority of your daily activities.

With the competitiveness facing today’s entrepreneurs, it is essential to have rapid access to results and key performance indicators (KPI) in real time. By allowing you to access, cross-check and analyze your data, a good management application gives you a clearer picture of your business.

There are also all kinds of solutions that can be connected to your management software to allow you to glean even more value from your data:

  • Customer Relationship Management (CRM) application to improve your sales.
  • E-commerce platform to sell your products online.
  • Electronic payment solution to pay your suppliers and receive payments from your customers via the web.
  • Etc.

In other words, choosing Excel for your business’s accounting may seem like a good idea at first, but by making this decision, you are unnecessarily exposing yourself to major risks, wasted time and financial losses. Regardless of the size of your business, you benefit by opting for specialized software.

About Acomba

As developers of management software, each day we help more than 40,000 Canadian SMBs to manage the essential aspects of their operations.

Whether you are starting up or expanding rapidly, we have solutions adapted to your reality which will help you get the most from your entrepreneurial project.

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Le blogue Acomba regorge d'articles sur les affaires, les TI et la gestion d’entreprise.
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