There are several disadvantages of Excel that can harm your business. Although it is a great tool for creating financial control spreadsheets, it is manual, complex to customize and susceptible to human error.
As a result, entrepreneurs who are growing and have a very high sales flow end up wasting a lot of time managing their business. This is because, in addition to filling out spreadsheets, they also need to check each launch.
Therefore, if you are looking to improve the management of your recurring payments and not be held hostage by Excel payment control, continue reading!
8 disadvantages of Excel in controlling recurring payments
The disadvantages of Excel are clear in the routine of recurring payments , as the tool does not allow for the optimization of demands .
Furthermore, although Excel has formula options for various calculations, it will always depend on someone to enter the values. This does not happen when you use a management system, which automatically cross-references the data.
And when we look at a company with a high sales volume, Excel ends up not being an effective resource. This is because, if an employee forgets to record a transaction, the final financial result may be compromised.
But I’m just starting out, I don’t have such a high volume of sales.
Well, even for those who have just opened a company, using Excel may not be so advantageous, since the tool does not generate reports to analyze the business’s performance.
Now, let’s take a look at some of the disadvantages of Excel when it comes to recurring payments. Check it out!
1. Difficulty of automation
One of the main challenges of Excel is the difficulty in automating data filling at the level necessary to control recurring payments .
There are even advanced resources to fill in information and make calculations automatically, but you need to have specific knowledge. In addition, there are many variables involved in recurring sales.
If you have to manage monthly billing for customers in a subscription business, you will have to repeat information every month in spreadsheets, for example.
Not to mention dealing with variations such as discounts, refunds, cancellations, plan upgrades and downgrades, among others.
In this way, the little that was automated requires manual filling again, taking up a lot of time and effort from employees .
It is always important to remember that, in recurring businesses, you cannot waste time on manual tasks, as there are many strategic issues that are more urgent.
Therefore, the famous Excel spreadsheets are not recommended for those who need automated and agile recurring billing.
Ideally, the process should occur without human interference, from the invoicing of the sale to the issuing and sending of the invoice and bill to the customer.
2. Lack of resources for collaborative work
Recurring payments often go through several professionals within the company or even through third-party providers.
In this process, the entrepreneur and the person responsible for finance will have to edit the same file to record all charges and transactions for the business.
It turns out that Excel is not conducive to collaborative work , as spreadsheets are not so simple to share and it is easy to lose track of who does what within the file.
Even in the cloud storage version, it is a bit risky to have several people editing a spreadsheet online at the same time, especially when the information is so important to the company.
In recurring businesses, the high volume of billing data that repeats frequently only makes the situation even more complex.
While management systems offer control over access and changes by users, spreadsheets can easily become a mess – especially in larger teams.
3. High probability of errors
A second of distraction and a typing error in an Excel spreadsheet can cost a company that sells on a recurring basis dearly.
Imagine entering the wrong invoice amount and then replicating the error for other months, or getting the frequency of a charge wrong.
Any minor error with financial data means loss – it is no wonder that Excel is known for human errors in management.
An emblematic case is that of the British bank Barclays Investment Bank, which suffered a billion-dollar loss due to an Excel spreadsheet error, as reported in Computer World.
During the 2008 crisis, the bank decided to buy some assets from the bankrupt Lehman Brothers, but did not pay attention to the fact that 179 contracts were in hidden lines of the spreadsheet received.
As a result, the bank only realized the mistake after converting the file to PDF and had to assume the extra costs for contracts with no value whatsoever.
This is just one example of the kind of problems Excel can cause when you don’t have control over your data.
4. Vulnerability to fraud
Spreadsheets are also files that are very vulnerable to fraud, even when password protected.
Even if there is access control in the company, it is easy for a malicious person to change information and calculations directly in the file without leaving any traces.
Additionally, there are cybercriminals who specialize in intercepting and violating spreadsheets to obtain confidential and strategic data from companies and customers.
Because of this, Excel ends up not being a safe option for managing recurring credits in your business, especially if you value data protection and want to ensure your compliance with the LGPD .
5. Lack of integration with other systems
When managing recurring payments, it is important that billing information is integrated with accounts receivable, financial management and inventory control .
With Excel spreadsheets, integrations are very limited and it is difficult to guarantee the flow of data between the software used by the company.
There are even plugins and solutions that connect spreadsheets to some systems, but nothing compares to having a single database, where all modules communicate with each other.
One example is the monthly subscription charge, a process that involves several steps, such as recording the sale, generating a payment slip, generating an invoice, sending notifications and information to the customer, reducing stock (when it comes to products) and entering accounts receivable.
Obviously, an Excel spreadsheet cannot record all these steps, requiring data integration with other management systems , such as an ERP.
6. Risk of data loss
For those who still keep spreadsheets on the company server, the risk of losing valuable data for the business is very high.
A file that exists only on one computer or at most in some backup can easily be accidentally deleted , lost during a natural disaster or accident, or even stolen during a robbery.
Remembering that any loss or leak of data not only has a financial impact, but can also directly affect the company’s reputation in the market.
7. Slowness and poor usability
Who has never lost patience with a spreadsheet that became slow due to too much data?
This is another very common Excel challenge, which starts to lose performance after a certain volume of data is entered into a single file.
If there are a lot of formulas, functions and graphs, the situation can become even more delicate.
Furthermore, usability, that is, the ease of using Excel, is considered poor by many users , due to the poor distribution of tools and the cluttered interface.
We don’t even need to tell you how much time this wastes on a daily basis, especially when you need to control all the variables of a recurring business.
8. Difficulty viewing information
You can even add colors, filters and customize the spreadsheet. But the fact is that Excel is not a very visual resource.
When controlling recurring payments and installments, it is important to have a tool that facilitates data visualization and report generation.
After all, in addition to managing collections, you also need to analyze transactions to make your sales projections , understand the financial performance of the business and plan your finances.