Using spreadsheets for the purpose of accounting is a very, VERY dangerous solution to invest in. Yes, spreadsheet templates are readily available on the Internet, but the fact that the rest is still done by hand make it too risky to your business.
Here are the reasons why using spreadsheets for accounting purposes is dangerous:
Anyone who can edit the file can easily mess up, intentionally or unintentionally, data entries, formulas, and values. Aside from that, your spreadsheet program won’t tell you if you got anything wrong. (Good luck in tracking that! ) Just one messed up cell can result to a considerable amount of losses in the business.
Prone to loss
Data in spreadsheets are passed on to one employee to another for double-checking, approval, consolidation, and such. The risky part, they’re usually in the hands of a non-IT employee who is not familiar with the practice of data backup. Meaning, once the data gets lost during the process, it might be gone for good.
In a company, the absence of financial data — accounts receivable, inventory, accounts payable, customer data, and such — restricts business operations, thus profit loss. How exactly would you operate if you don’t know how much capital do you have?
Major roadblock to growth
How would a company keep up with the fast-paced and ever-changing market when its employees are too busy getting data from different departments, consolidating them, and making a financial report?
This situation leaves the top management less time to analyze the report further and come up with a more competitive strategy.
Non compliant to BIR regulations
The Bureau of Internal Revenue (BIR), a tax regulatory body in the Philippines, has rules and regulations that govern businesses. Businesses who don’t comply face penalties, and worse, permanent closure. In essence, spreadsheets won’t tell you what’s the legal way to do things such as invoicing and bookkeeping, and when it is time to file tax remittances.
Now, let’s combine all items above and what do you get? A major accounting headache.
There’s only one solution to this — a computerized accounting software that can completely eliminate the mundane processes of spreadsheets, is reliable, and is BIR accredited.
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