Everyone starts off building their company with spreadsheets since they’re a cheap, easy solution to track orders, shipments, inventory, etc. The problem is that as volumes increase and operations expand, many businesses become married to using them long after they’ve served their purpose. Sometimes this happens because of cost concerns, the belief that change will be too difficult, or even out of fear of losing “control”. But, regardless of the reason, continuing to use spreadsheets will start to incur a real cost in lost productivity and lack of oversight that can make it difficult to control costs, make decisions and ultimately stay competitive. If your trading or recycling business is still relying on manual spreadsheets, here’s a few things to consider about their true cost to your business.
1. Decreased productivity.
If you’re tracking your shipments or orders on spreadsheets then you’re easily double, triple or quadruple entering data between one or more spreadsheet files, shipping documents, settlement statements and your accounting system. The time spent doing this, even for a small operation, can easily exceed 16 hours a month and grow exponentially as volumes increase. There’s also the difficulty of quickly retrieving information and knowing where to look. The impact on productivity is easily the most costly aspect of working with spreadsheets. If using integrated business software helps avoid hiring even one employee, it can easily pay for itself just in lost productivity (not to mention all other benefits).
2. Costly data errors.
A recent study states “close to 90% of spreadsheet documents contain errors”[1]. No surprise when you consider that weights, grades, prices, and logistic references typically need to be manually recorded several times over and that spreadsheets do not provide any means of validating data such as prices or account references the way that an integrated business system would. The problem with data errors is not just internalized but can impact critical decision making, customer service or even result in potentially costly price or weight discrepancies.
3. Difficulty sharing data.
It’s easy to share spreadsheets when it’s just one or two people. But as your business expands additional staff will eventually need access to these files. Workarounds typically include creating multiple copies of the same data and manually merging or coordinating “taking turns” sharing the same files. Even if you try to get around this with the “co-authoring” feature in Excel, edits to the same line can be easily overwritten, changes are not instantaneous and it still leaves other problems such as lack of an audit trail on who’s making what changes. With integrated software, your team has quick access to critical business information without clunky sharing workarounds.
4. Problems getting reports.
Generating reports from spreadsheets is not easy to do, often requiring hours or days of work that can introduce data integrity issues, making it impossible to get timely information on demand. Sure, it’s possible to build macros to automate some reports but depending on the volume and organization of your data, this can prove pretty challenging to do, requiring additional time and specialized expertise. With business software, your data is always logically organized with professional, on-demand reports or extracts that can easily be used for your own analysis.
5. Creates staff dependencies.
As your business grows, the limitations and problems with using spreadsheets will become a bigger headache, putting increasing pressure on your back-office and making it difficult to add volume without more staff. All impediments to business growth. However, it also introduces another problem: a dependency on the staff that has the expertise to maintain these spreadsheets, create macros and write reports. This often results in resistance to any change that might diminish their role (since it is viewed as a form of job security) while also making it more difficult to establish standard procedures, critical for growth, and “on-board” new personnel. Introducing business software minimizes employee dependencies making it easier to manage staff and acclimate new employees with scalable standardized procedures.
Regardless of the reason, continuing to use spreadsheets will start to have a real impact in lost productivity and lack of oversight that can make it difficult to control costs, make decisions and ultimately stay competitive. cieTrade’s specialized business software for commodity trading, paper and recycling companies eliminates spreadsheet dependencies providing a scalable platform that lets you grow your business without growing your overhead. To learn more, call at 1-877-895-2781 or visit www.cietrade.com
[1] Analysis of multiple studies by Professor Ray Panko IT Mgt, University of Hawaii.