While small businesses often rely on spreadsheets to manage their expenses, this can actually increase business costs and result in compliance issues, according to a recent study by SAP Concur.
The survey found that manual systems are costing businesses time and money, chewing up around 10 hours per week (per finance employee) documenting employee expenses. Fabian Calle, managing director, small to medium business, SAP Concur Australia and New Zealand, said managing spreadsheets as businesses grow becomes a very time consuming and costly task.
“With increasing regulatory requirements on Australian and New Zealand businesses, there are also significant compliance issues because spreadsheets don’t automatically track compliance.”
3 signs your business should stop using spreadsheets for financial processes
1. Lack of visibility
While spreadsheets were created for storing and organising data, they simply capture a moment in time and don’t provide real-time insights into business performance. In a dynamic and volatile market, this can literally mean the difference between the success or failure of a business if strategic decisions are based on outdated data. Another key issue is that lack of business visibility provides a greater chance for employee fraud.
2. Data inconsistencies
No business can afford to make a mistake in the current climate. Spreadsheets have an extremely high risk of data inconsistencies and inaccuracies because they can be shared through email, which raises issues with version control. As various users make changes to emailed versions, there is no longer one true source of data that can be relied on. And, small data and formula mistakes can balloon into larger issues for the organisation.
3. Inability to grow with the business
Spreadsheets don’t have the flexibility to scale and grow with the business. For example, even just adding a column or row adds more complexity to the spreadsheet. Also, spreadsheets don’t alert business owners about late invoice payments or potential compliance issues.
Fabian Calle said, “For SMBs that need to gain a greater level of agility in the post-pandemic world, spreadsheets simply can’t keep up with business needs. For example, they can’t track trends over time, they don’t give visibility into the business’s most profitable clients and they don’t provide real-time insights into business expenses.
“Businesses must move to automation to remain competitive in the new digitised business environment. Those that continue to rely on manual processes like spreadsheets will simply be weighed down with resource costs and compliance issues that will impact their ability to sustain successful business operations in the longer term.”
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