When a company first starts up and doesn’t have much to deal with in terms of accounts receivables, Excel gets the job done. However, it won’t be long before you end up outgrowing that system, for a variety of reasons from time wasted to data errors. As your customer base grows, so does the amount of data that you’re trying to manage in Excel.
Many companies use a combination of spreadsheets, aging reports, and their accounting/ERP system to keep tabs on their outstanding invoice. In fact, our recent study found that 16.53% of midmarket B2B companies are using spreadsheets to manage their accounts receivable. But using spreadsheets to manage thousands of invoices and customers could create data chaos, and we will show you why.
YOUR SPREADSHEET DATA IS ONLY AS CORRECT AS THE MOST RECENT UPDATE
Updating that information is time consuming; usually taking the back seat to other more critical tasks. New and more correct data is not input as frequently as it should be (daily), which causes a mess of problems for both customers and collectors.
THE SPREADSHEET IS ONLY AS GOOD AS THE USER HANDLING IT
There are so many functions that exist within Excel that they actually have competitions for it. To become and Excel expert would take years, and we’re not blaming you if you’re not there yet. However, aging reports and other accounts receivable reports in spreadsheets call for lengthy IF statements and other formulas, so the data there is only as good as the one who is creating it.
94% OF SPREADSHEETS CONTAIN ERRORS
According to Dartmouth College’s Tuck School of Business, 94 percent of spreadsheets contained errors. What this means is that every time data is entered or re-entered into a spreadsheet there is an enormous risk for error. Your credit and collections team relies on that data to track and analyze customer payment information, manage disputes, contact them, and all of their other tasks. If the data on those spreadsheets is incorrect, then you’re A/R employees are going to have to spend even more time gathering information and fixing errors and much less time building relationships, settling disputes, and talking with your customers about payment.
REPORTING AND ANALYZING INFORMATION IS TIME CONSUMING AND UNRELIABLE
Your accounting/ERP system may provide you with plenty of reports, but they rarely give your collectors and accounts receivable managers the information they need without a fair amount of manipulation. In many cases, you will run reports from your accounting/ERP system and then need to export all of it out to a spreadsheet; manipulating that information until you get what you need. Having to manipulate anything can mean trouble, especially if you’re trying to gain meaningful data from it, not to mention time consuming.