Spreadsheets have their uses for personal productivity and ad hoc analyses, but they can also become a barrier to effective finance processes for growing companies when used inappropriately. Often times, spreadsheets are error-prone, putting finance teams and entire businesses at risk.
In fact, Ventana Research found that one-third (35%) of enterprise companies reported discrepancies in their most important spreadsheets.
With these challenges in mind, opting for a dedicated cloud accounting solution can not only save time and money, but also alleviate the risks of errors by automating steps, simplifying reporting, and streamlining core activities.
Software-driven processes also provide continuous access to business performance information in real-time which helps organizations respond to market changes faster, drive growth, and improve customer satisfaction.
While there are many ways that replacing manual spreadsheet-based tasks can improve finance department productivity, Ventana Research identified three primary areas where better accounting tools can save substantial time.
Companies that face revenue recognition requirements are particularly vulnerable to spreadsheet complications. The process of recognizing revenue becomes very difficult to control via spreadsheets.
Cloud-based accounting software offers the ability to collect, track, and update ever-changing contract details seamlessly from a central location to avoid confusion and mistakes during revenue recognition. This automation is also crucial for growth as finance departments start to process larger amounts of data and generate more reports.
In addition to other issues, using spreadsheets to handle accounting close consumes significantly more time. Organizations with multiple entities face an even tougher, error-prone consolidation process prior to close that often involves various sets of calculations, spreadsheet adjustments, and manual journal entries to adjust balances.
However, when the reliance on spreadsheets is eliminated, companies can generate financial and managerial reports faster, and improve accuracy.
Reporting Time and Expenses
For companies who rely on contractors and employees with billable hours and expenses, collecting this data via spreadsheets can be tedious and frustrating for everyone involved. Spreadsheets do not offer controlled workflows and this makes it challenging to handle tracking time and expenses.
Using cloud-based tools to streamline the time and expense process through automation can also help companies provide clients with the transparency they want.