Spreadsheets. Since their inception in 1979, they have been used extensively by small businesses looking to track aspects of their operations on the cheap. Do you know what else was used by businesses in 1979? Typewriters and punch cards. You’re not using those anymore, if ever you did (hello Millenials!).
I’m not here to judge, but if you are still using spreadsheets to run your managed technology business today, you’re doing it wrong (okay, judging just a little), and it’s costing you, especially when it comes time to sell. One example of a MedTech company illustrates the point well: They lost $20M in their valuation because they were using spreadsheets instead of purpose-driven business management platforms that could scale and replicate well. Your company is likely a lot smaller than the one in the example, but the lesson here is the same: Spreadsheets can cost you BIG TIME.
Don’t get me wrong, spreadsheets have a place. They can be handy when you’re using them for calculators to help you visualize potential outcomes, like this one we created for Tigerpaw customers to help examine and improve tech utilization rates. (A secret for you: You can get access even if you don’t currently work with us!)
Calculators are one thing, but spreadsheets simply aren’t designed for more complex business processes like accounting, CRM (customer relationship management) and cashflow analyses. You don’t offer second rate services for your customers, so don’t use second rate spread sheets to manage your business. Need more convincing? Here’s some more food for thought:
Spreadsheets are prone to errors
According to an article in Forbes, an estimated 88% of business spreadsheets contain errors, and those errors are costing businesses billions of dollars a year. The more complicated the spreadsheet, the harder it will be to identify where an error occurs. This can have a waterfall effect as more and more data is entered into the spreadsheet. An error in one cell can be like a very tiny needle in a very large haystack: Painful and impossible to find! If you’ve ever tried to troubleshoot a spreadsheet that was created by somebody else in your organization, you know exactly what I’m talking about here.
Spreadsheets require multiple entries for the same data
Many small companies use spreadsheets to keep track of their financials until such time that they are handed over to an accountant for the year. This manual entry takes a ton of time and leaves the door open to make many errors. And according to Quickbooks, you should be practicing double-entry bookkeeping to adhere to general accounting principles (hello IRS!). To do this properly, you need to literally enter the values you’re accounting for twice. I’m no mathematician, but 2x the work will double the time and the cost of entry, right? The likelihood of errors increases, too.
Spreadsheets suck as a CRM (Customer Relationship Management) system
If you’re looking to grow the total value of your business, being able to seamlessly move a prospect from lead status to long-term customer without manual effort is super critical. If you track leads, prospects and customers in a spreadsheet, you’re going to drop balls and miss opportunities. Bottom line: spreadsheets are not designed for managing a sales funnel so stop that already.
Spreadsheets suck for inventory management
In a recent blog I wrote on inventory shrinkage I lay out the math on how poor inventory management can cost you big time. You can read the blog for full details, but it is safe to say that having repair parts in warehouses, customer locations and van-stock can be extremely difficult to account for and track in a spreadsheet. Any dollars you have tied up in inventory should be 100% trackable and reportable at moment’s notice because it’s YOUR MONEY that pays for it all.
1979 has come and gone and a lot of innovation in business management has happened since then. You don’t wear bell-bottoms anymore, and spreadsheets are the bell-bottoms of the data world. There are a lot of options out there for business automation that will help you to eliminate errors while giving you more time back to grow your business. All that’s left to do is make a commitment to do better for you AND your customers.