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Cost Accounting in Excel: 5 Main Challenges and Ways to Solve Them

Cost Accounting in Excel: 5 Main Challenges and Ways to Solve Them

Most developing companies understand all the privileges of business automation. However, even experienced CFOs and CPOs often hesitate when choosing the right spend management tool for organizational workflow improvement. It is hard to find someone in the IT sphere, who is not familiar with Excel. Even though Excel software seems to be easy in use, sometimes it leads to certain problems that can significantly affect the efficiency of your company. Let's consider them in more detail.

 

1. Human Factor

Spreadsheets are often riddled with errors due to manual data entry and the use of copy and paste methods. Errors in formulas are the next issue. Most of these errors are random, but the use of Excel software does not exclude that some of the occurring mistakes are intentional. Unfortunately, Excel spreadsheets are susceptible to fraud because it is easy to change or delete information and hard to keep track of who is making the changes.

 

2. Lack of Flexibility

Creating a spreadsheet in Excel that will meet all the requirements of the procurement company is a very laborious process. Before you start using Excel, you should know exactly what you need. Moreover, you have to anticipate your future needs in advance, as there is no possibility to configure the spreadsheet later.

 

3. Poor Scaling

Difficulties in using Excel software for expense management become especially noticeable when your company grows and develops. In addition to the human factor, there is a number of other significant problems, such as the inability to share information fast and monitor all orders and their compliance with the established budget.

 

4. Reporting Difficulties

To estimate the effectiveness of the procurement process in your company, you need a full reporting of all the company's costs. The list of company expenses should be available for you at any time. Excel excludes such function. In Excel you make reports after paying accounts: data is collected from multiple sources after what summarized manually. Thus, reporting process becomes tedious and time-consuming. Moreover, the possibility of getting access to relevant information at any time is unavailable.   

 

5. Inexplicit Procurement Management Process

Excel is not useful for data exchange operations, as it does not allow to track reliable supply chain (demand – payment); text requests require processing time, and users, in turn, do not know whether their request is included in the budget of the department/company or not. As a result, the above factors lead to the absence of an established procurement process and increase costs.

 

Why SaaS is Better than Excel?

Software procurement is simple to use. Furthermore, it is easily scalable. You can have an unlimited number of users, at the same time selecting their level of access. This feature greatly minimizes the human factor. Reporting and determining allowable costs also becomes easy and takes much less time. You can get the report on costs with a few clicks in real time - no need to wait until the end of the month. You can easily control all the costs of the company and their compliance with the budget. 

 

Handling Data

Due to the fact that lately more and more devices become connected to the Internet, the amount of collected data reaches enormous level. This gives businesses an exciting opportunity to expand insights. In order to achieve this, companies must be able to cope with the increased volume of data. However, when information is tied up in the Excel spreadsheets, it is a bit problematic to self-serve and get the information you want quickly. In comparison to Excel, SaaS solution can handle data volumes on a scale never seen before. By applying SaaS, you can take all the information that exists in different places, pull it together and create a useful report.

 

Real-time Data Availability

Availability of information on the procurement process in real time is highly beneficial for sustainable company’s development. Purchase accounting in real time is the key advantage of automated procurement. It brings a significant contribution to the company's performance. SaaS in contradistinction to Excel provides access to the actuals in real time, thus making your procurement process way easier and convenient. Real-time data availability is serious argument to prefer SaaS over Excel.

 

Error Reduction

Of all the Excel disadvantages, manual data entry is perhaps the most damaging one. According to statistics, fraudulent manipulations in Excel spreadsheets have already resulted in billion-dollar losses. The main underlying reason behind this vulnerability is the inherent lack of controls, which makes it so easy to alter formulas, values, or dependencies without being detected.

SaaS solution effectively solves this problem by automating what used to be done manually. Reporting with a SaaS solution is customizable and flexible. SaaS minimizes errors and inaccuracies in orders, saves time, and allows procurement professionals to scale their daily needs without the risks of entering data manually.

 

Conclusion

In today’s digital world task automation becomes a crucial factor for companies of different size and sphere. By automating numerous tasks with the right instrument you save both time and energy. In addition, task automation helps you avoid costs and optimizes diverse processes within your organization, including procurement. Maybe, it is a good time to solve your problems and keep records of expenses by using more reliable and automated software? By applying it, you can create the entire chain, starting with the determination of the company needs and finishing with the exact payment time, taking into account all the features of your company. 

As they say, seek and you’ll find. Look for Excel alternatives, and you’ll find worthy tools, one of which is SaaS. Automate your tasks wisely - choose the best software-as-a-service solutions.

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