The Reality of Using Spreadsheets to Run Your Business

As a business grows to multiple sales channels, manual systems won’t be enough to support a scaling company

Brandon Levey
Brandon Levey

Even as technology becomes more accessible and consumers demand faster service, many retailers are reluctant to adopt the solutions they need to grow successfully. Instead, they rely on manual spreadsheet tracking to maintain inventory, orders and other important information. But as a business grows to multiple sales channels, manual systems won’t be enough to support a scaling company.

Here are four reasons why spreadsheets are detrimental to a business:

Drains Time

Ventana Research published a study in 2013 that uncovered some of the biggest challenges and dependencies businesses have with spreadsheets. Although it wasn’t surprising to see, people reported how time-consuming and tedious spreadsheets are for them. It was alarming to know that not many people adopted new technologies.

In the study, it was stated that “users underestimate the impact of spreadsheet problems on their productivity because they tend to overlook the myriad little issues that constantly crop up.”

The research group also uncovered that people spend about 12 hours per month consolidating, modifying and correcting the spreadsheets. This makes it very difficult for retailers to gain momentum in an extremely saturated market. Everyone has intentions of building a successful retail business, but only the few that build the right foundation gain the momentum to succeed.

Limited Scalability

Spreadsheets are used because of their easy onboarding and setup. At first, looking at this as a solution makes sense; it’s customizable, doesn’t require heavy training and is typically set up with your other basic office tools. However, as a business grows and hires more people accessing the same documents, it becomes clear that spreadsheets don’t cut it.

Manual inventory and order tracking is not scalable. As retail businesses expand, business owners must put automated systems into place that help provide more stability and streamlined operations. Without automated systems, staying ahead of customer demand and available inventory becomes a distant dream.

Prone to Human Errors

Human error is inevitable when using spreadsheets. With the amount of detailed formulas and multiple team members updating the documents, it’s not only difficult to manage, but if something goes wrong—it’s nearly impossible to find the error.

Solutions that have flexibility to integrate, centralize and simplify any part of your business need to be taken more seriously as staples for a growing retail business. Errors in inventory and order tracking lead to poor customer satisfaction and decreased repeat business. Sometimes business owners think being heads down every hour of the day, pumping in manual work is how you get to the next level. The problem is this leaves no opportunity to pop your head up and realize there’s a better way.

Lack of Real-Time Automation

One-time transactions used to be easy to track in a brick-and-mortar location, but as retailers are encouraged to expand online and offline channels, automating orders and shipping is a must.

The ability to track products, such as quantities, location and more, is key in scaling a business. If a business’ foundational processes like inventory management are broken, it becomes very difficult to find new opportunities for growth. These pain points extend beyond tracking product location and amounts, affecting customer satisfaction, sales insight and business growth. It’s a lot like maintaining personal health or a car. Cosmetics and flash are good to draw attention, but if the stability and strength of its core functions falter, those other things just don’t matter.

Other Statistics from the Study

  • Nearly 72 percent of participants said that their most important spreadsheets are the ones they share with others.
  • Those who spend all or most of their time working with spreadsheets spend 18.1 hours per month maintaining just one spreadsheet.
  • Even casual users, those who spend less than one-fourth of their time, must devote about one day (8.6 hours) per month on this spreadsheet.
  • More than half of users (56 percent) say that combining spreadsheets is a time-consuming chore.

Brandon Levey is the creator, a.k.a the ThinkerUpper, of Stitch Labs (http://www.stitchlabs.com), a provider of smart inventory management software for multichannel sellers. He is the writer of the original code that makes the product operate. He has a diverse background ranging from microsystems and nuclear security to iPhone accessories and sustainable apparel.

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