A spreadsheet is a powerful tool for many business operations. Many industries rely on spreadsheet programs to record, analyze, manage, and communicate business data.
Spreadsheets can also help in storing data for immediate or future use. A spreadsheet is commonly used in bookkeeping or accounting services. It is also used by individuals who collect and track data.
There is no denying that spreadsheets are beneficial. However, spreadsheet softwares also have their limitations, making them undesirable to simplify a business process.
This article will discuss the advantages and disadvantages of spreadsheets for business. Let’s get started!
What is spreadsheet software?
A spreadsheet software is a program that can use input, visualize, and manage data using rows and columns. Spreadsheets have different features that can make data processing, data analysis, and data visualization much easier.
With a spreadsheet, you can format cells, insert formulas, create pivot tables, and other helpful tools to quickly process numerical data and text. Two of the most common spreadsheet tools are Microsoft Excel and Google Sheets.
Common spreadsheet applications
There are many spreadsheet applications that people with an internet connection can access. Here are two of the most commonly used spreadsheet applications:
Microsoft Excel or MS Excel is the industry standard for spreadsheets. With a built-in spreadsheet template, you can conveniently perform calculations for complicated formulas and visualize data with charts and graphs.
Microsoft Office MS Excel offers spreadsheet templates that can help manage small businesses.
One main advantage of Google Sheets is the ease of collaboration. Like other online tools, with Google Sheets, you can enjoy file sharing and allow multiple users worldwide to simultaneously access the spreadsheet file and edit it.
It even has a chat feature for users to communicate without leaving the spreadsheet. Google Sheet is free with Google Workspace implementation.
What are the advantages and disadvantages of spreadsheets for business?
Advantages of spreadsheets
Here are some of the valuable advantages of using spreadsheets in your business.
Spreadsheets are highly customizable and free
Spreadsheet software is easily accessible, free, and customizable. With several formulas and functions that you can do in a spreadsheet, you can easily make any document type work for you.
Spreadsheets are highly customizable. You can use a spreadsheet template to make the work easier. A customized spreadsheet can streamline any business process to make work efficient for all.
For customizable and ready-made templates, you can try Simple Sheets’ Business Management Templates bundle for a dynamic working experience.
Spreadsheets require minimal training
Whether it’s your first time seeing a spreadsheet or you have been using it for years, anyone with experience knows that this program is straightforward. Recording information and learning complicated formulas doesn’t require intensive training.
Spreadsheets help businesses spend less time and money training new employees, for they don’t need complicated software to get the job done.
Allows data manipulation and integration into the workflow
There are several spreadsheet advantages, one of which is the capacity to manipulate and analyze spreadsheet data. You can do computations in datasets, remove duplicates, and search for data from tabs.
It doesn’t matter how big your business is or how many employees will use the spreadsheets. Spreadsheets can be shared with as many people as possible. Since it is highly customizable, it can be integrated easily into any workflow.
Spreadsheets come in a universal file format, making it very convenient to access in most programs.
A tool for financial documents
Spreadsheets have helped create and organize financial documents like cash flow statements, balance sheets, and making invoices. It is also a great tool for preparing financial statements and business budgets.
Spreadsheets can do all the math for you. All you need to do is input a set of formula commands and apply these commands to all related data that have been encoded.
Other spreadsheets advantages include expense tracking, doing loan calculations, and forecasting income. You can use visual data such as charts and graphs to make financial data organized and understandable.
Flexible to use and with lots of data storage
The great thing about spreadsheets is their ability to store large amounts of data. These data can easily be organized to make it easy to locate and sort them.
Spreadsheets are very flexible because they can be used for several tasks. They can be used for simple data entry tasks and basic calculations or even complex tasks such as statistical and financial data analysis.
Disadvantages of spreadsheet programs
Some users have apprehensions as to the benefits of using spreadsheets. Are spreadsheets the best tools to store, manage, and visualize your business’s data? Here are some of the disadvantages of using spreadsheets in your business.
Challenging to use and prone to errors
Spreadsheets require minimal training, especially for recording data and managing personal finances. However, some people may need to be trained to build skills in using advanced spreadsheet software functions.
Don’t use spreadsheet software if you want a program that can do the job much quicker and will cause fewer errors. Investing in database software that can accurately resolve errors is more advisable.
Many supervisors and managers experience challenges using spreadsheets while monitoring their employees and managing their everyday workloads. Human error is expected since data entry is done manually, and several edits and calculations happening simultaneously.
When working with large spreadsheets, spotting errors is problematic because you can easily mislook them. Fixing such errors can be time-consuming
Limited data security
When spreadsheets are accessible via the cloud or shared network, all spreadsheet data are prone to unauthorized access, which can compromise the whole business operations.
Spreadsheets that are password protected are still at risk from hackers due to poor management. Spreadsheets are easily shared with anyone through email. A disgruntled or dishonest employee can take advantage of this and leak important details to your competition.
Multiple versions of the file are created
Working with offline spreadsheets is easy when you are working on them alone. However, updating and monitoring the content in real-time can be a struggle if you need to share the file with more people.
Whenever changes are created to the master spreadsheet, these changes need to be addressed to the entire team, which can be a hassle. Also, each team member has their own spreadsheet version, each file containing slightly different data.
Fraud: Difficult to identify who edited the spreadsheet
Spreadsheets are considered excellent collaborative tools because anyone can access them. However, the downside is that everyone starts working on the same data sheet. Yet, there is no way of telling what each one has done with the spreadsheets.
You can train your employees to handle a rigorous documentation process to minimize human error. However, doing this can be costly for the company and will not guarantee a successful return on investment.
Limited data visualization
Data visualization using charts and graphs is possible to create in a spreadsheet. However, putting all the data into a graph or chart can be time-consuming, leaving you frustrated. You will most likely give up altogether.
Frequently Asked Questions
What are the benefits or advantages of using spreadsheets in businesses?
There are several advantages of using spreadsheets such as (1) it is free and highly customizable, (2) minimal training is required to use them, (3) it allows data manipulation, and workflow integration, (4) they can help create financial documents, and (5) is flexible to use with a large data storage space.
Do the advantages of using spreadsheet software outweigh the disadvantages?
It is highly advantageous for small businesses to use spreadsheet software because it is free, customizable, and requires minimal training. However, a spreadsheet is no longer advisable if you are a large business and work with large amounts of data. It is best to invest in a database tool.
Always consider the advantages and disadvantages of spreadsheets for business before deciding whether to use the software or not. Spreadsheets are best used for small businesses working with small amounts of data. Small businesses can make the most out of spreadsheets because they are low-cost (free) and highly customizable.