A lot of businesses use spreadsheets to manage their operations in various ways and levels of complexity - from tracking orders and finances, to maintaining databases. Spreadsheets are a cheap and easy way to run your company in the early stages. Fairly easy to use, they don’t require a lot of experience or tech acumen to be used by everyone in the team. They provide a solution to organise data and format it in a way to analyse and grow your business.
However, there are large setbacks as well, such as risks from lack of control or flexibility, unreliability, and simply the capacity they have. When a business grows, there comes a natural point at which spreadsheets stop being enough and it’s time to move to tailored and advanced software.
Spreadsheets may not be the best option for running a business, but they are often the only one. At The Beaverhead, we understand you can’t always afford to turn to new, professional software.
That’s why we have pulled together an extensive e-guide to show you how to use common and simple features across the three most commonly used spreadsheet programs - Microsoft Excel (paid), LibreOffice and GoogleDocs (free) - to vastly improve your day-to-day use of spreadsheets, before you are ready to make the jump away from them.
Most common spreadsheet uses in small businesses:
Business plan Spreadsheets are a great way to build out a rough model for your business. You can use them to track and understand the nitty-gritty, technical aspects of your company, including your legal structure, competitive strengths and weaknesses, and revenue plan. Microsoft Office even provides templates which can help shape your business structure.
Accounting Every accounting professional uses spreadsheets in some capacity. In a way, accounting could be considered the main function of the application. Spreadsheets support processes like creating balance sheets, preparing financial statements, setting budgets, or even creating invoices. They can also be used for expense tracking, forecasting, and loan calculation.
Inventory tracking A core function for any business selling a physical product. There are other systems and applications available on the market to handle inventory management, but spreadsheets are an affordable option, especially for startups and smaller companies. However, using spreadsheets requires a lot of manual oversight and is therefore more prone to human error than the specialised alternatives
Compiling contact lists Spreadsheets give us the ability to store and maintain records of prospects’ and customers’ contact information. They have capacity to manage and sort massive quantities of that kind of data for different kinds of projects, promotions, or outreach efforts. And if you are using Excel, you can benefit from the Mail Merge feature to send mass emails to contacts in your spreadsheet at the same time.
Data visualisation Businesses often rely on spreadsheets to visualise data through charts, graphs or tables and make it more accessible, compelling, and easier to understand.
HR management The HR team processes a lot of data on a daily basis, from talent acquisition and conducting training to coordinating company benefit programs and payroll, so they have to remain organised. Spreadsheets can provide a reliable means for HR professionals to arrange employee work schedules, keep tabs on vacation time, and more.
Checklists and task lists Spreadsheet can be used to track different projects’ progress, detail specific deals, and keep tabs on individual tasks that need to be covered day-to-day.
Time logs Tracking employees’ hours is central to maintaining accountability and efficiency at a company — for both management and employees alike. Spreadsheets can be used to ensure that processes are carried out consistently and properly. Microsoft Office even offers downloadable templates specifically dedicated to that purpose.
Maintain schedule, calendar or planner Businesses and entrepreneurs can keep track of deadlines, payment schedules, project milestones, or meetings by jotting them down in a spreadsheet calendar - an easy way to record and keep track of plans.
Advantages and disadvantages of using spreadsheets
- Free options available (LibreOffice, Google Sheets)
- Widely used - even students learn about the basics of using spreadsheets
- Easy to use, intuitive, no intensive training required
- Formulas are provided and ready to use, with users just needing to fill in the blanks
- Convenient way to organise data
- Can be integrated with other software
- Next-level calculations - using data entry and formulas, the spreadsheet does the math for you
- Avoid repetitive activity by automating calculations in a spreadsheet
- Multiple user access for collaboration - this feature is offered in Google Sheets, allowing multiple users to work at the same time and see live changes
- Multiple sheet tabs in one file make it easy to combine data and create an overview of the most important data
- Universal file format which can be opened in most programs
- Large amounts of data can be overwhelming to view and time-consuming to translate into reports
- User bias - as the data is manually input by the user, some information may be missing, painting a false picture and negatively affecting decision making
- Lack of data history - unless manually backed up, data is lost after being updated, making it difficult to identify or rectify mistakes
- Lack of security, even if password protected. File can be easily shared with the wrong people, or hacked
- Difficult to identify syntax errors, especially by inexperienced users
- Just one wrong cell is enough to put off all related calculations and result in incorrect reporting
- Studies show that almost 90% of spreadsheets contain at least one error, and even the most carefully prepared spreadsheets have an error in 1% of all formula cells. Most of them were due to human error
- There are multiple cases of companies losing millions of dollars simply because of spreadsheet errors (like at the London Olympics, when a typo resulted in the sale of 20,000 tickets instead of 10,000! People showed up and didn’t have seats, which meant a lot of refunds and costly upgrades.)
- Difficult to troubleshoot or test, spreadsheets don’t make it easy to track the logic flow of specific formulas from one cell to another. This makes it very challenging to determine where discrepancies exist and numbers are not adding up
- Multiple versions of the same file being created. With several people working off the same file, locally saved versions and simultaneous updates make it hard to keep track of the most up to date information
- If not backed up on the cloud, your data is at risk of being lost because of hardware failure or natural disaster
- It’s difficult for managers to use spreadsheets to manage their team’s daily workload, pipelines and deals. Maintaining all this information will result in an endless cycle of uploading, downloading, attaching and emailing
- Not mobile friendly, especially when working with large amounts of data
- Data entry is time consuming and can result in boredom, lower productivity, and inattentiveness that can ultimately lead to errors in the document
With all the above risks threatening productivity and revenue, many companies move on to specialised or custom software that is more user friendly and tailored to their needs. At The Beaverhead we have helped many clients make that smooth transition and instantly start reaping the benefits.
However, now may not be the right time for your company to invest in custom software. We have therefore created this guide to share our top tips on making spreadsheets easier to use, so you can not only prevent mistakes and improve efficiency, but also prepare your business for future growth.
We would like to share with you our top 7 tips to make spreadsheets easier to use and better, so in the future you can swiftly move to a better tool.
To continue reading, download our full comprehensive e-guide here.