Over the years, Microsoft Excel has become synonymous with accounting. In the early years of computing, its data processing capabilities were totally unmatched, and for almost a generation, Excel has powered countless numbers of startups, CPAs, and business ventures around the world.
Houston, we have a problem
But for all its capabilities, Excel’s time (along with other spreadsheets) is running out. New technologies are entering the marketplace faster than anyone can keep up with, and many of these offer powerful data analytics tools.
Excel’s market share in American companies with annual revenues under $25 million dropped from 78% to 69% in the last year, and business owners often cite reasons like the following for discontinuing its usage:
- 92% of those who use Excel say it takes too much time.
- 79% of business owners feel their current financial reporting and analytics tools only somewhat meet their business’s needs.
- 65% of businesses do not use or have no access to real-time reporting tool
One of Excel’s greatest weaknesses is a lack of real-time reporting. For every new transaction, bill, or charge, users are required to manually enter in every last bit of data. If anything is missed, then reporting will lag behind, bosses will become impatient, and decisions will be poorly informed.
And that’s not to mention the possibility (no, eventuality) of making a mistake! Anybody who has used Excel to track any complex project has gone through the mind-numbing task of updating each cell individually and then checking and re-checking for mistakes.
It’s estimated that when using Excel, 17% of an employee’s time is spent manually reviewing the spreadsheet. But for all that time spent poring over the spreadsheet, the cost of omitting the review is far too high. For example, in 2013, a cut-and-paste mistake at J.P. Morgan resulted in a whopping $6 billion accounting error.
Despite everyone’s best efforts, however, the Wall Street Journal reports that 9 in 10 spreadsheets contain errors, and when your spreadsheet becomes that statistic, it wreaks havoc on your productivity and workflows.
So you’re left with:
- 17% less productivity
- 90% guarantee that your spreadsheet could seriously hurt your business due to clerical errors
- A high probability that despite your best efforts, a major error can still creep in
But in addition to being difficult to manage, spreadsheets don’t natively provide a lot of information about the data you are putting in. Charts may help out with simplified views, but they are hard to build and take a long time to ideate.
That’s where data analytics comes in. Data analytics automatically takes whatever information you want to track and makes meaningful comparisons out of it, putting it into highly customizable charts, graphs, and other reports.
And while some do require you to put the data into a csv or other data format, there are many more that can automatically update your dashboard based on website behavior, credit card interactions, F&B input, or tee time bookings.
Using data analytics in a business context is known as “business analytics” or “business intelligence,” and is giving businesses powerful insights into their strengths and weaknesses. As one business analytics company reports:
“In the past, data queries and reports typically were created for end users by developers working in IT or for a centralized team; now, organizations increasingly use self-service tools that let execs, business analysts and operational workers run their own ad hoc queries and build reports themselves.”
There are many, many offerings from many different companies, and in the coming articles we will profile these. In the meantime, if you have any questions about foreUP’s business analytics offerings, you can contact our Director of Product, Christian Arnetsen at firstname.lastname@example.org.