Most small businesses often start out using Excel for their accounting and data management needs. However, this strategy is only doable up to a point.
Although the popular spreadsheet application can do a large number of tasks and is easily available worldwide. It isn’t a long-term solution. This is because while the program itself is sturdy, the spreadsheets created using it aren’t. This often leads to problems later on – which we’ll go into shortly.
Eventually, there comes a time when businesses may need to look at alternative software for their developing needs. This usually involves a move to cloud-based software.
Before we get started, let’s first establish what we mean when we talk about ‘moving to the cloud’.
‘Cloud computing’ is a general term for anything that involves delivering hosted services over the internet. ‘The cloud’ refers to servers that are hosted in data management centres all over the world and accessed over the internet, as well as the software and databases that run on those servers. By using cloud computing, users and companies don’t have to manage physical servers themselves or run software applications on their own machines – freeing up a lot of space and resources.
A ‘move to the cloud’ (also known as cloud migration) is the process of moving digital assets such as data, workloads, IT resources, or applications to cloud infrastructure. This might mean moving tools and data from old, legacy infrastructure or an ‘on-premises’ data management centre to the cloud.
Although Excel is an excellent spreadsheet application, it is just that: a spreadsheet application. Many businesses unknowingly try to use the platform for purposes other than what it was designed for or overwhelm it with data and processes it was not meant to handle. This can lead to a myriad of problems, from the small and inconvenient to the large and disastrous.
Here are just a few examples:
Excel lacks the security of a cloud-based system. Imagine the username and password of the person responsible for creating the Excel sheets (or those of a person with editing privileges) were stolen. That means the person who now has access to the sheets can do anything with the data – from deleting to stealing confidential client details.
As the size of data in a spreadsheet grows, the application’s performance plummets. When simultaneous access is added to the mix, things can come to a grinding halt – if the users can open the sheet at all. Many users run into these performance issues when they work with large amounts of data or combine lots of worksheets.
Excel also doesn’t integrate easily with other business applications, which can cause problems with data duplication or overlap.
So long as manual data entry, copy-paste techniques and formula errors are a reality, there is always a risk to the accuracy of data, and spreadsheets can be riddled with mistakes.
As people work with Excel sheets, they may make changes to the main file such as hiding columns or tabs, of which others may not be aware if changes are not communicated, leading to incorrect or incomplete reports. Another problem is that some people may prefer to work on a local version of the file in case there is an error, meaning multiple copies of the same workbook can be passed around the office, inevitably leading to a version mix-up.
Because Excel files don’t have an audit trail, it’s almost impossible to track who did what after a file has been edited a few times by multiple people. This can have a real impact on accountability and data recovery. After all, if you don’t know what was updated, by whom, and on what date how will you be able to restore the original data?
Setting up an Excel spreadsheet that meets all of your financial or data collection needs requires a lot of forethought and planning. It often takes time to set up formulas and reporting and requires manual tracking. You may find your business constantly adding or changing the information on the spreadsheet, which can be a poor use of employee time.
Creating forms to manage data input can also be time-consuming and difficult. Even when done correctly, the forms won’t have enough methods to control and validate inputs from the users, meaning there is always the chance of erroneous data capturing.
Cloud-based software is a definite step up from Excel in a number of ways. As well as being scalable, cost-effective and tailored to your business needs, it also guarantees maximum up-time and does highly secure backups on the regular, meaning you never have to think or worry about your data’s integrity.
Unlimited users are allowed, each with their own access levels so that employees only see what they need to see, and sensitive data isn’t out in the wild. Cloud storage also alleviates the pressure (and costs) of providing data storage on the premises.
Let’s look into the benefits of cloud-based software in a little more detail.
Cloud computing can scale up to support larger workloads and greater numbers of users far more easily than on-premises infrastructure. The latter option requires businesses to purchase and set up additional physical servers, networking equipment, or software licenses – all of which can be very costly (see below).
Companies often find that moving to the cloud vastly reduces the amount they spend on IT operations since their cloud providers handle maintenance and upgrades. Rather than think about keeping things running, businesses can focus more on their actual business goals and getting ahead in their chosen market.
If an application or website is hosted in cloud data management centres instead of in various on-premise servers, then data will not have to travel as far to reach the users. This enables many businesses to significantly improve service performance and the overall user experience for their customers.
Both employees and customers can access the cloud services they need from anywhere. This opens up various business opportunities such as expanding into new territories and allowing their employees to work remotely.
Cloud-based users will also be able to take advantage of other apps that sync with their existing data. This means processes like inventory management, invoicing and client data collection will become a whole lot easier, saving time and reducing costs.
Most cloud-based systems come with an easy-to-use dashboard which you don’t have to set up yourself, giving your employees confidence from the get-go. When a business has a clear financial view from the very start, it can make better strategic decisions.
All real-time financial (and other) data is kept in one central place – online, in the cloud. There’s no need to wait until the month-end to see how things are going – with just a few clicks, real-time reports and budgets are easy to view and share.
Historical data is also always available at your fingertips, and a proper audit trail ensures your data cannot be compromised.
Cloud-based software allows you to create the information any of your customers or stakeholders might need at a moment’s notice, and with more automation and less manual data entry, mistakes and errors are exceptionally rare.
It’s worth bearing in mind that Excel is highly adaptable and basically free. If your business is just starting out and your data is relatively straightforward, an Excel workbook with one administrator could be the best choice. However, even small businesses eventually tend to outgrow their spreadsheets and have to make the move to a cloud-based system.
A move to the cloud can be stressful, but it is often the best choice for organisations that require data confidentiality, access by multiple users, and ease in reporting.
Get in touch if you think there is something Bespoke could help your business with.