Why you shouldn't use excel, the importance of Accounting software
Why you shouldn't use excel, the importance of Accounting softwareApril 29, 2020
Contributor: Nkosikhona Phakathi
I have been asked to keep this short and simple and short but I cannot really see how that is possible when in South Africa and Africa as a whole we have big businesses that are using excel for Payroll, Invoicing, etc.
Tracking time, payments, sales seems easy when you first start using excel for invoicing, but after a few invoices it all changes, it isn't.
Another thing about excel is you first need to find a template that is really good, and you start fiddling with the formulas before you get it all right.
Now that you have done a quote for Mr. Dube you still have to save it some where on your computer and when you do so you need to remember what you saved it under.
There is always a risk of overwriting those files or deleting them by mistake.
Lack of Tracking
With word or excel it is almost impossible to track expenses, invoices, payments and sales. That means you could be making a loss without even realising it, for example you building a project and that project is gonna take you 5 years to complete. How do you track all your project expenses making sure all your suppliers are paid up and your client is invoice for the work done. Doing all this you still have to track profits on a weekly or Monthly Basis.
It is impossible to do from Word or Excel.
Huge Accounting Fees
I spoke to a friend of mine, he is smart so what he does is pay an accountant R2500 a month to handle all his accounting stuff, that means he does his invoices on Excel and Word, gives them to his customers (that is 4 Invoices a month) and he gets about 20 Supplier invoices a month.
So for R2500 a month he gets a service he could do himself in less than 30 minutes, and after that he still has his privacy to protect. If my friend had an accounting system he would be paying way less than 10% of that and he will get way more out of it.
At the end of every term you still have to pay an accountant to compile everything for you and pay another R10,000; when you could pay the accountant R3000 for them to put their stamp on your papers and you submit that to your taxman on a yearly basis.
With that noted Excel works out way more expensive than your traditional accounting software.
I was helping a customer of mine once, I couldn't believe they were using Bits N Bytes ERP to manage trust funds up to R500 Million, and she told me:
"t is just so easy to use an accounting software compared to excel, sometimes you just have to take that leap and when you do , you will ask yourself, 'why did I not do this 5 years ago?'
Going back in history to see when payments were done and how is more important to us, and that was a problem with excel, it made bookkeeping feel like we were still in the 80s"
As we share this journey we will be discussing a lot of issues that affect your day to day operations, but for now I invite you to try Bits N Bytes Trader Accounting, an accounting software for Accountants, Professional Service industries like Law Firm, Contractor, Estate Agent, etc.