Are you tracking your expenses in a spreadsheet? If so, you’re not alone. A lot of entrepreneurs do this because it can be helpful in keeping track of where your money is going. But there are some downsides to tracking your expenses this way. Here are eight reasons to stop tracking your expenses in a spreadsheet:
Amount of time to set up and maintain
While spreadsheet-based expense tracking provides a number of advantages, there are also some drawbacks to using this method. One of the biggest drawbacks is that it can take a significant amount of time to set up and maintain. This is especially true if you have a complex financial situation with multiple income sources and expenditures.
Additionally, spreadsheet-based expense tracking can be difficult to use on mobile devices, which can make it more difficult to track your expenses on the go. Finally, spreadsheet-based expense tracking may not provide as much insight into your spending habits as other methods, such as apps that offer categorization and visualizations of your spending.
It’s easy to make mistakes when entering data.
One of the biggest dangers is that it’s easy to make mistakes when entering data. Even a simple typo can lead to inaccurate results, and it can be difficult to spot errors in a long list of numbers
You may not have all the information you need at hand to enter into the spreadsheet.
For example, if you are tracking your expenses for a month, you will need to ensure that you have all of your receipts at the end of the month in order to accurately track your expenses. If you are missing even a few receipts, it can throw off your entire spreadsheet. In addition, if you are tracking your expenses over a longer period of time, it can be difficult to keep track of all the different receipts. As a result, a spreadsheet may not be the most accurate way to track your expenses.
Tracking expenses in a spreadsheet can be tedious and time-consuming.
You have to input every purchase you make, no matter how small, and then categorize it. This can take up a lot of time, especially if you’re someone who makes a lot of small purchases throughout the day. Additionally, spreadsheet expense tracking can be difficult to stick to. It’s easy to forget to update it or to get behind, which can make it less effective. Another downside is that spreadsheet expense tracking can give you a false sense of security.
It’s hard to see how your spending affects your overall budget if everything is spread out
Spreadsheets can also make it difficult to see the big picture. If everything is spread out in different cells, it can be hard to get a sense of how your spending affects your overall budget. In addition, if you only update your spreadsheet once a month or so, it may not give you a real- give an accurate picture of what going on in your business.
You can’t run monthly reports
A spreadsheet is a great tool for organizing and storing data, but it can be very difficult to analyze that data in any depth. This is because you have to set up custom formulas in order to calculate things like trends and relationships. This can take a lot of time and effort, and you might not even end up with the same information that you could have obtained from another source with a single click. If you want to get the most out of your data, it’s best to use a tool that is designed specifically for data analysis. This way you can save time and get more accurate results.
Doesn’t automate with anything
If you are using other software or apps for your business, spreadsheet data can quickly become stranded and out-of-date. Without the ability to talk, sync, or play nice with other business software, your spreadsheet might as well be on a desert island. This is because spreadsheet software is not designed to integrate with other business applications. As a result, you may miss out on important data or opportunities for efficiency gains. To avoid these problems, it is best to use accounting software that is designed to integrate with other business applications. This way, you can be sure that your data is always up-to-date and accurate.
Holding you back to grow your business
When you first start your business, a spreadsheet may seem like the easiest and most efficient solution for tracking your finances. But as your business grows, so will your expenses – and manually entering every expense into a spreadsheet can quickly become time-consuming and tedious. Can you imagine yourself entering 50 or even 100 expenses into a spreadsheet every month? Me neither.
Luckily, there are many software programs available that can automate the financial tracking process for you. These programs can categorize and track your expenses, income, and profits/losses automatically, which can save you a lot of time and hassle in the long run. So if you’re looking for a more efficient way to manage your business finances, consider investing in one of these programs.
If you’re like most business owners, you track your expenses in a spreadsheet. But is this really the best way to do it? If any of these points resonate with you, it may be time to consider switching to a more automated expense tracking system. Contact us today for help getting started!