Why you should stop relying on spreadsheets and start getting real-time, accurate data.

Spreadsheets can be a useful tool for specific tasks. Simple to use and readily accessible, they can be used effectively for modelling, analysis, building lists, scenario planning and complex calculations. The issue arises when spreadsheets start to get used improperly in a business. In situations when more than a handful of people have to share data, data needs to be synchronized between users, or when people are expected to execute processes consistently and collaboratively, spreadsheets shouldn’t be used.

Spreadsheets just don’t have the functionality to follow through in these types of business processes. In these instances, it’s time to make the move to an integrated enterprise resource planning (ERP) system. Comparing spreadsheets to an ERP system is like comparing apples to oranges. Both spreadsheets and ERP systems are technically used for planning and budgeting, but at the same time have very different fundamentals.

To put this in perspective, consider the potential errors that can occur when using spreadsheets for the wrong function. Research recently conducted found that only one in every five spreadsheets are error-free and will give you correct results. The other 80 percent are uncontrolled and untested spreadsheets with errors that have the ability to pose significant risks to any business. Failure to keep records, backup information or test and control spreadsheets will inevitably lead to lost revenue, mispricing and overall poor decision making based on undetected errors.

An ERP system is considered a company’s backbone. It is designed to record business transactions and processes – basically like the main data depository. Before making the switch to an ERP system, a number of our current customers were trying to run on spreadsheet planning and manual processes, but soon discovered that spreadsheets simply aren’t designed to perform as a standalone. So like many other small to midsized businesses, if you are using spreadsheets to try and manage growth or track your company’s business processes, you should take a look at the list of all the things a spreadsheet can and can’t do and consider re-evaluating.

Here are the facts. Spreadsheets:

• Don’t understand business processes – you are responsible for recording everything and telling it what to do
• Aren’t integrated – so consistency is almost impossible
• Require a lot of labour and effort to keep data aligned
• Can’t be easily shared and accessed by different people across the organization
• Have inadequate security making it easy for users to delete data and alter formulas
• Have an insufficient disaster recovery plan

Realistically, it’s not fair to compare a spreadsheet to an ERP system. Spreadsheets basically lack the fundamentals that most ERP’s are fully equipped with from the very beginning. When used as a backbone or main source for management, they simply don’t perform. You waste money, you waste time and you get frustrated.

Want to hear more? Join us for our upcoming Webinar on the Top 5 Ways businesses are using spreadsheets and learn how easily these tasks can be completed in an ERP system. Save yourself the headache and grow your business the right way. Click here to register!

Cash flow optimization requires careful attention.

The opportunities tend to be small and difficult to notice, but accumulated, they can result in substantial gains, either through reduced financing costs or greater returns on the time value of money. To make your cash as productive as possible, therefore, you need to be able to drill into the details. A financial system designed for transparency is the only way to accomplish this.

The very nature of treasury management is what makes optimization difficult to attain. The opportunities are concealed by the volume of data and the small size of the opportunities (in many cases). So, they can be brought to light only by diligent analysis. You need to dig into the numbers to see how you can optimize the flow of cash into and out of your organization.

Data is fundamental to driving ROI

Data is fundamental to driving ROI from treasury management activities: both access to it and the ability to report on it effectively. You need to be able to view your entire financial supply chain in order to see how cash moves throughout your company. It’s the relationships among the moving parts that usually reveal how you can optimize your cash.

The key to success lies in your ERP or integrated accounting systems. Examine the data closely, and look for the small inefficiencies that can add up to a big difference. Then, develop an action plan for remedying your treasury management practices, implement improvements, and continually monitor your environment for results. Your financial system should provide the “single version of the truth” you need to roll out practices that will save your company money and generate ROI swiftly.

Managing cash flow is integral to the success of any business, and optimizing it can lead to rapid returns that accumulate over time. Pair a robust accounting solution with careful analysis, and you can find financial gains you can use to support other initiatives, particularly those that will generate more ROI for your company.

Photo credit: FamZoo

Many small and medium sized businesses experience growing pains when their accounting software fails to grow at the same pace as their business. As you go about completing your daily tasks, you may be experiencing increasing limitations and the frustrations that go along with it.

If you can empathize with any of these feelings and situations, please retweet this to your colleagues (it may finally be time to make a change to your current business software systems…):

1. You have more disparate ‘islands of information’ inside your business than you would have time to visit on a Caribbean cruise.
2. Predicting financial outcomes for your investors and shareholders is more accurate when you use a Magic 8 ball than the answers you get from your accounting system.
3. It takes more time to close the month than you took for your last vacation.
4. The database and transaction processes are really only understood by a few ‘inside experts’ and held as tightly as the Coca Cola secret recipe.
5. The only way to get a report or sales order to print correctly from your system is to take a screenshot.
6. You feel like you are on a roller coaster ride at Disneyland every time you launch your current software, unsure of what surprises will await.
7. When you ask for the user manual, one of your employees gives you a file folder that they have scribbled notes on the back of.
8. You have a bruise on your forehead from opening the wrong spreadsheet for the 10th time today.
9. You have mandated employee breaks to help the system from getting overloaded from too many concurrent users.
10. You KNOW your current software has cost you more in lost employee productivity, delayed orders, and custom workarounds than a new system would cost, but you can’t get that data from your existing accounting software!

What pains have you witnessed as a result of outgrowing your accounting software?  Tell us about your funny (or not-so-funny) experiences in the comments below!