By Raj Narayanaswamy
Spreadsheets have been an indispensable business tool for decades, but as new technologies emerge, the limitations of spreadsheets have grown more apparent. If your small business needs to foster collaboration, or gain visibility into complex processes, spreadsheets can often cause more problems than they solve. In these cases, new software solutions, especially those based in the cloud, have proven to be much more effective.
Small businesses traditionally used spreadsheets to handle a wide variety of tasks, from accounting and billing to time tracking and revenue projections, because the basic format was easy to use and business owners and employees were comfortable with a tool they already knew. However, as companies started automating manual processes and bringing on new technologies, spreadsheets started to become roadblocks to innovation and productivity.
One of the main reasons spreadsheets have failed to meet the needs of today’s businesses is that they weren’t designed for collaborative, repetitive, company-wide tasks. Many users turned to spreadsheets as a communication tool to share information with people both in and outside their organization. But spreadsheets are inherently difficult to consolidate, and every time they pass through another pair of hands, the risk of typographical errors and faulty data entry increases.
Despite the risk of errors and drain on productivity, spreadsheets remain the standard tool for many business processes, especially at small to mid-sized businesses (SMBs). While many companies recognize the downsides of relying on spreadsheets, few have made plans to upgrade to more efficient solutions to manage crucial tasks.
Businesses using spreadsheets often have their information spread out across various versions of different files, which can be difficult to untangle. This makes it hard for organizations to gain overall visibility into their business processes. This is especially important for issues like employee time tracking, where government regulations require a clear audit trail, even for privately held companies.
Time and attendance tracking is one of the main areas where SMBs can benefit from cloud-based software. According to a recent Aberdeen report, nearly a third of organizations still have manual time and attendance processes in place, a percentage that is likely much higher among smaller businesses. Not only does this pose the risk of your business running afoul of government regulators, but it also wastes time, resulting in lost opportunities and lower productivity. Companies that have implemented an automated system to integrate time and attendance with payroll, the Aberdeen report found, had a 30 percent lower rate of payroll processing errors and 32 percent higher rate in the tracking of actual time worked.
Cloud-based software can also alleviate many of the problems facing consulting businesses that continue to rely on spreadsheets to manage critical processes, such as client billing. Manual processes around client billing can cause error rates of 12 to 15 percent, and long invoice processing cycles cost another 1 to 5 percent of transaction value, according to the Aberdeen Group. Cloud-based time tracking helps ensure that all billable time is captured, and gives managers real-time visibility into project status and workforce costs against estimates to make better decisions and forecasts.
Small business owners would be wise to investigate alternatives to spreadsheets in order to eliminate the systemic risks in their internal operations. Cloud-based, automated solutions are not only easy to use, but they also add scalability, visibility and security. What’s more, cloud-based time tracking applications are a much faster and more effective means of bolstering productivity ― allowing companies to avoid wasted hours on spreadsheet maintenance, and to use that time to focus on their core business objectives.