As a small business owner, you may be using a spreadsheet as your default choice for bookkeeping. Since spreadsheets have been around for several years, there are plenty of examples and videos online on how to use accounting formulas in spreadsheets quickly.
It is the most accessible bookkeeping solution that you can use and it can be an important part of your business in its early stage.
But as your business grows, you will soon realise that you may not have the time to deal with all the manual effort needed to maintain your spreadsheets.
Very soon, you will be faced with a business management decision—can you afford to spend the time and effort in updating your spreadsheets and the risks involved in it? Or is it time to move all of your shop’s financial information onto a shop management app?
If you are still undecided, let’s look at why you need automated software to track your expenses, payrolls, invoicing and more.
- 1 The problems With Spreadsheets As An Accounting Software
- 2 Manage Your Shop At Fingertips!
- 3 The Reasons
- 4 Here's How Zadinga Helps You Manage Your Shop
- 5 Why Switch To A Shop Management App?
- 6 How Zadinga Helps You
The problems With Spreadsheets As An Accounting Software
A spreadsheet is an excellent place to start for a small shop owner. It gives you access to a customised and simple-to-use worksheet that you can use daily. But there are several problems concerning spreadsheets. These include:
- Risk of broken formulas
- Non-updated data
- Misplaced information
- Lost passwords
- Misplaced files
And as your retail business grows, you will need to spend more time tallying and updating the spreadsheet. After a while, it will become difficult for you to keep your books in order and give you less time to concentrate on business management.
Here are some reasons why spreadsheets are becoming a problem for small business owners.
Spreadsheets Are Becoming Outdated
If you have begun your business working on spreadsheets, you may want to know that generally, spreadsheets are not accepted by the business world.
For example, perhaps you need funding or financing to expand your business and open several shops.
An investor may not be interested in looking into your spreadsheets. Similarly, CAs, accountants or bookkeepers may find it difficult to go through your spreadsheets.
Important daily details such as logging transactions, organising financial statements such as balance sheets, income reports and cash flow documents can become a big problem if you continue using the spreadsheet.
It Is Difficult To Visualise Spreadsheets
So while a spreadsheet format is helpful to put data, it is not very handy when it comes to analysing that information. To look into tables and graphs, you need to rely on other tools to interpret the data.
When it comes to business management, tracking transactions such as accounts receivable or accounts payable can become a big issue, especially if you have lots of columns and rows of data in a spreadsheet.
Also, unlike a shop management app or accounting software, you cannot expand or collapse tables within your spreadsheet.
Does Not Store Historical Data
Spreadsheets are not designed to maintain years’ worth of data. And so, it can become a problem for companies if they lose historical data, which is an essential factor in identifying financial trends.
To help your business forecast and budget for the future, you need to identify financial trends.
For example, you may be expecting seasonal sales during Diwali. At that time, you will need to hire workers and add to your supplies. If you are unable to identify these trends, you could lose a great opportunity of making money.
Another problem seen with spreadsheets is that they could cause legal complications. For instance, during an audit session, you may realise that your shop’s spreadsheet template no longer has the data from the year that the audit is asking. And that could become a big problem.
Entry Through Manual Labour Only
Spreadsheets are readily available, accessible, low in cost and sometimes even free. But the amount of time and effort it takes to update and make entries into it manually can be hard to put a number on.
Working on spreadsheets require several person-hours. You will have to enter every business expense by hand. So, from expense reports to accounting, every task will require manual entries.
Not only will this take up your time, but it could also cause errors that could miss your eye. With the right shop management app that includes automated business management tools, you significantly reduce the number of hours spent on accounting while decreasing the time value cost to a great extent
No Integration Facilities
Spreadsheets do not integrate with any other financial tools or applications. For example, you will not be able to link your credit card or bank account with your spreadsheet.
You will need to import and organise all the information in your existing spreadsheet, and that can once again take a lot of time and may cause errors.
For instance, if you make a small mistake when manually entering information on your spreadsheet, it could take several hours and sometimes even days to find the error.
With a shop management app, your transactions are automatically imported into the accounting software and almost eliminate the likelihood of risk while saving you a good deal of time to focus on business growth.
Unable To Predict Cash Flow
When running a business, managing your cash flow is essential. Forecasting and budgeting as your retail business grows is a necessary part of running your shop. But unfortunately, spreadsheets cannot project forecasts for your small business.
As your business grows, cash flow can become more complex, and it can become harder for you to make intelligent decisions on the direction of your business.
When you use a shop management app, you can see everything easily owed by your business and everything that others owe you. You can also quickly forecast how much money you can make in a few months down the line and budget your operations.
Tiny Errors Can Lead To Bankruptcy
Small mistakes in your spreadsheet can result in huge errors down the line. For instance, even if one cell in your spreadsheet has wrong digits, misplaced decimal points, or similar incorrect numbers, all the calculations down the line will be wrong.
Your spreadsheet will use one tiny mistake to miscalculate the final output. When it comes to losing business revenue, human error is a huge problem.
Using a shop management app prevents you from underestimating your monthly stock expenses or overstocking and avoid big problems for your small business.
When you first start your business, your spreadsheet might work for you. But as your shop grows, you may want to expand, and with things changing, you will have to relook at your prices, get more funding, launch new products or services and even hire new people.
Your spreadsheet cannot handle all these and more as it does not keep up with your business growth.
Why Switch To A Shop Management App?
Now that you are convinced why spreadsheets are no longer applicable for your business, it’s time to consider switching to a shop management app.
As an all-in-one software, a shop management app allows you to take control of your business operations and finances from the palm of your hand through your smartphone.
With just a few clicks or swipes, not only will you get access to important business management features such as invoices, balance sheets, income statements, inventory levels and management and much more, you can also:
- Handle income
- Supervise sales
- Track expenses and invoices
- Forecast future earnings and make smart budgets
- Look into payroll
- Manage taxes
- Offer a wide range of payment modes and accept online payments
- Receive and provide instant digital receipts
How Zadinga Helps You
A shop management app is an investment worth making. It can save you time and money. Compared to the amount you will pay on lost opportunities and errors from spreadsheets, your shop management app can take your small retail store to the next level.
If you have been using spreadsheets and frustrated with its bookkeeping abilities, it’s time to move to Zadinga’s one-stop shop management app to get a firm hold on your shop operations and finances and use them to your advantage.
Not only will you get access to real-time data that can allow you to forecast and budget, it will also revolutionise how you look at your shop and financial data.