The lure of spreadsheets lies in the fact that they are simple. That’s why many small companies, especially those just starting out, resort to spreadsheets to manage their accounting needs. Just download a free spreadsheet, modify it to suit your business needs and personally fill out the file as you run your operations.

A business owner may be able to get away with it at first, what with just a small business to manage. But as your orders increase, more supplies are purchased and additional headcount, temporary or full-time, is hired, there’s so much to do now that you can’t afford to just sit and do your spreadsheets yourself.

Your time becomes even more valuable and poring over spreadsheets to keep them up-to-date or track down an error somewhere is not a productive way to manage a growing company. Likewise, these mistakes can even be detrimental to your business.

The spreadsheet pitfalls  

As you encode your figures, mistakes can happen and spreadsheets are not designed to alert you of these errors, unless it’s the formula. It takes a good eye and a sharp focus to find these mistakes. In addition, these spreadsheet formulas can be complex and are prone to errors.

As you expand, new revenue streams would need a different spreadsheet. So the more new offerings you introduce, the more spreadsheets you need which you will have to keep track of, if you do your own accounting. It does not get any easier at this point.

Besides the human error factor, you also need to be concerned about the integrity of your spreadsheets. Since it’s so easy to change the information and just copy/paste items, not to mention that you don’t have a way to track who made the changes in the spreadsheets, these are also susceptible to fraud.

In case you have business partners, they might want to see the books too so the master file will have to be shared among the owners, which means any one of them can make changes to the file. In case you need to merge files, you have to make sure there is no duplication and you don’t lose any data in the process.

Then when the tax filing period comes around, you’ll need to show your spreadsheets to an accountant to get the paperwork done. Hopefully, these are properly filled out, correctly  computed as well as accurate and intact.

But business owners don’t have to worry about all these once they choose to use an accounting software. A lot can be done with just a few clicks, and that’s just for starters.

The upside of accounting software

Spreadsheets may be simple to work with but an accounting software makes life easier and simpler. Just enter the financial data and you’ll find yourself managing your day-to-day transactions at a fraction of the time you spend on the spreadsheets.

But the less time you spend on your financial data doesn’t mean they are getting done haphazardly. On the contrary, a fully automated accounting software records all the transactions and calculates the figures accurately so everything is in one database and you just do them once.

This means you significantly lower, if not eliminate, human error so you are confident your financial results are right. Moreover, an accounting software that comes with an audit trail can tell you who accessed the data and made some changes.

Then with just a couple of clicks, you or your staff can generate the paperwork for your tax filing. It’s also more convenient to share the data to your accountant through the cloud or better yet, give him access to the software as needed.

It gets more exciting. You can get a clear picture of how the business is doing by instantly generating reports. No need to build your balance sheet or profit and loss statement because the software can generate these for you. Plus, some accounting software allow you to customize reports so you have a better view before making a business decision.

Wouldn’t it be nice to know at a glance who among your customers have outstanding balance or which business unit is bringing in the revenues? Such details can be easily checked and are available in real-time using an accounting software.

These software even let you prepare cost quotations or sales invoice that you can email to your customers. Since these forms are also customizable, it gives a professional look to your business that you’ll never even think of using Excel invoice again.

The benefits of an accounting software like Moneyworks or MYOB just keep adding up but the most important of all is you make the numbers that you have work for you, not the other way around. Just get the insight you need from your financial data in order to grow the business and let the software do the work. It frees up your time so you can focus more on your core business.