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7 Disadvantages of Invoicing using Spreadsheets

02/19/2014
Posted by Carmelo Romano

Do you use spreadsheet software to create invoices for your clients? Many businessmen find online invoice templates, modify them and try to make do with them. As we shall see there are many disadvantages with invoicing using spreadsheets.

The correct way to invoice clients is through using computerized accounting software. Before you say, “I don’t know Accounting so I can’t use Accounting software”, realize that accounting software nowadays is made for non-Accountants.

Especially for simple tasks like invoicing, using accounting software is straightforward.

So going back to invoicing with spreadsheets, here are 7 disadvantages you are putting yourself through:

1. Repeatedly entering the same information

When you invoice using a spreadsheet you have to repeatedly enter the same information. For example, the clients’ address and the item description have to be repeatedly entered for different invoices. With accounting software, the client and the item of sale would have been predefined. So when you’re invoicing, it’s just a matter of choosing them from a drop down list and all the necessary details are automatically generated.

In short, if you invoice the same client 12 times in a year, you only have to write the client’s address once. This saves time and avoids typing mistakes.

2. The invoice still has to be processed by accounts

This is a big advantage. When you use a spreadsheet, you still have to print the invoice and give it to your accountant so it may be entered into your accounts.

When you use accounting software, you don’t have to do this anymore. Your invoices are accounted for automatically by the software. It’s much less hassle and again you decrease the possibility of mistakes.

3. You don’t necessarily know who issued what

What happens if one of your employees issued an invoice with a mistake? With a spreadsheet, you can’t really know who did the mistake. Accounting software like Clever Accounting keeps an audit trail of each user’s transactions. This makes it possible to find out what every user has done within the system and therefore, track who did the mistake.

4. You have to manually back up the invoices

Business owners see backups as a hassle. When one is using online accounting software, there is no more need to manually back up your data. This is done automatically. Furthermore, you will have your data backed up in multiple secure locations, greatly increasing the reliability of your data.

5. The whole process takes lots of time

First you have to create the invoice. Then print it. Then give it to your accountant. Then s/he has to enter it into your accounts. That’s quite a process.

When using accounting software, you just fill in the invoice form and it’s done. There’s no comparison really!

6. You’re giving your accountant boring work

The odds are that your accountant doesn’t enjoy accounting for your invoices. It’s boring work for the accountant. This work only has to be done because you create your invoices using spreadsheets. If you used an online accounting package, then your invoices would be accounted for automatically. It’s good for you because you become more efficient and it’s good for your accountant because s/he doesn’t have to do boring work that can be easily automated. It’s a win-win situation.

7. You can’t automatically create client statements

Client statements are a very handy tool because they tell you how much a particular client owes you. If you have clients that you work for regularly and for which you issue multiple invoices, then client statements can be very helpful in making sure that all your invoices get paid.

Conclusion

Using spreadsheets for invoicing is to modern accounting what typewriters were in the early 1990’s to office work, a technology on the way out. Invoicing has advanced. Using online accounting software for invoicing is becoming the norm around the world (especially in the US, UK & Australia) and it’s only a matter of time until companies in other countries follow suit.

The question is, considering the above, will you take advantage of this technology and benefit your company, or will you lag behind the leaders and shift technology only when you’re forced to?

Image courtesy of Just2shutter / FreeDigitalPhotos.net

Carmelo Romano

About The Author

Carmelo Romano- .

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