Microsoft Excel has been around since 1985. Computers weren’t quite the wall-spanning monstrosities that they used to be, but compared to the smartphones that we carry around in our pockets these days they might as well have been.

Excel has changed quite a bit since then too, becoming an almost unanimous business tool. At it’s core, it is a spreadsheet program, and don’t get me wrong, it still has its uses. In fact, according to a study from the Effron Company, over 80% of the companies they surveyed indicated a “moderate to heavy reliance on manual spreadsheet processes.”

However, those uses have limits, and a surprising amount of companies are failing to move on from Excel. Maybe it’s because they feel nostalgia for the program? Maybe it’s because they feel comfortable? The fact is, using Excel is fine, but using it as the sole business management software for small business just doesn’t cut it anymore, and it doesn’t work for larger businesses either.


Excel Broke the Economy…Kind of


Here’s one huge example of when Excel goes wrong. Back in 2012, the U.S. banking giant JP Morgan said one of reasons it had lost so much money and had to be bailed out was because of Excel. Wait, what?

It’s not all Excel’s fault though. The biggest issue is with those who use Excel. Sure, it can automate certain functions, and it’s good for simple accounting. The problem was people were copying and pasting figures that represented billions of dollars.

As often happens, human error occurred many times. Say goodbye to billions and billions of dollars, and the world economy.

Your small business isn’t dealing with billions of dollars, but the point remains: Excel is not built to detect human error, and once those errors happen, they are tough to fix.

Online small business software that can utilise a database, however, is designed to alleviate human errors. Spreadsheets don’t have the security features that database software does. Plus, the only way to identify mistakes is manually, and most spreadsheets that go out simply aren’t fact checked enough.

Why not utilise a software system that does it for you?


Excel is Perfect…if you work by yourself


If you’re interested enough in a software upgrade, chances are your small business is larger than just you. Excel is great for personal finances and budgets.Where it starts to fall apart is when your business begins to grow in scale. It simply isn’t built for collaboration.

If two people (or more) want to work on the same spreadsheet at the same time, they often resort to working on a read-only copy or emailing a copy back and forth between each other, and it becomes even easier for mistakes and omissions to be made. Multiple people can work within a database at any given time.

Plus, with more employees and clients comes compatibility issues. According to the Effron study, “Integration challenges often lead to patchwork manual workarounds in Excel, which create control weaknesses, financial misstatements, and data quality issues.”

Put simply: the more people that have their hands all over a document meant to be used by one person, the more chances something goes terribly wrong. Not to mention the fact that everyone working needs to have the right version.

And if you need to consolidate it and add analytics, then share that broadly over a number of players who are going to add their own stuff, Excel is a poor application for that.

You Have More Data Than You Think

“Database” might seem like a scary word if you’ve never utilised that type of software before. The only companies that need a database are ones that would fill a warehouse full of filing cabinets, right?

No! Even if your business isn’t huge, the amount of data that you collect will only increase. Every input order, every employee time sheet, every client address, it’s all data, and it can all be stored in an easy-to-search database rather than Excel.

Utilising software for small business management will scale with your business. Say, for instance, you keep all your phone numbers in a single Excel spreadsheet. This might work fine in the beginning, when you only need to keep track of 25 numbers. If you add a new phone number every day, that list is quickly going to spiral out of control.

You can do more than just keep organised, too. Excel lacks the ability to really do anything with the numbers that you are inputting, except responding to the specific equations and algorithms that you need.

Utilising a database or project management solution would allow you to keep track of trends in your business. Find out what works, what doesn’t, which of your employees is the best in which department, what product sells the most, what product costs you the most.

On top of that, being fully integrated means that you can create invoices and bill people correctly, rather than trying to compile a bunch of different spreadsheets together to try and figure out how much your customers owe you.

This quote from a CFO article sums it up perfectly. “It’s not an enterprise tool. The error rates in spreadsheets are huge. Excel will dutifully average the wrong data right down the line. There’s no protection around that.”

Excel is fine if you’re working by yourself or for a limited amount of uses. Sure, you can make it work for different functions. Nowadays, though, there are much more efficient and better programs to get business management done.