Automated Point of Sale: 10 Disadvantages of Using Spreadsheets
Throughout the year, Smartwerks appears at several trade shows across the country. It’s a perfect opportunity to connect with our current and prospective clients and learn about their needs. We have found that many small business owners are still using spreadsheets and manual point of sale systems.
Surprisingly, 46% of small businesses use a manual inventory control system. Compared to an automated point of sale system, there are a few advantages of a manual system, but only in the beginning. Manual systems are less expensive and simple to use. This applies if the business has few transactions and very little inventory. Another advantage is a sense of control, because the business owner is the one making the decision to purchase more merchandise, not a computer. Sometimes it’s hard to let go, and we understand that.
Drawbacks of a Manual System
Now, let’s look at 10 disadvantages of a manual system. Each of these affect every aspect of a small business and can prevent them from competing in a tight market.
1. Time intensive.
Manual systems require constant monitoring of stock levels and transactions. There are no alerts when inventory runs low.
2. Labor intensive.
Data entry into manual systems require users to work in multiple Excel worksheets for simple transactions. Manual systems also require constant updates and new spreadsheets for more data.
3. Duplication of efforts.
Sales reports in spreadsheets are not dynamic and need to be repeated on a very regular basis to see any trends.
4. Human error.
One missed cell in a single spreadsheet can cause many errors. Plus it’s very difficult to find. Using barcodes in automated systems can reduce administrative errors by 40%.
5. Limited functionality.
Manual systems are not agile for your business’ best practices. They are difficult to use when spotting trends and understanding the customer’s experience.
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6. Not good for analytics.
When using multiple spreadsheets to create good point of sale analytics, it takes a lot of software knowledge and mathematical aptitude.
7. Decision making.
Spreadsheets can’t consolidate data, which means they can’t summarize inventory or customer trends. It’s not a database, so the many functions needed to bring important data together are missing.
8. Business continuity.
The loss or corruption of any of the files can have catastrophic consequences.
With a manual system, hiring an outside firm to audit your business will cost more time and money. Spreadsheets are difficult to share when linked together. They also require detailed explanations for each row and column. And, they don’t provide an audit trail that details the integrity of the data, such as date and time stamps.
Spreadsheets are a big headache when your company wants to expand inventory or add a new location. You can’t expand without incurring more costs to time and labor.
Things to Know
Converting to an automated system is never easy. But, if you’re looking to make the switch from a manual to an automated system, the short-term investment of time and energy to integrate past data into an automated system will pay off quickly. Making the switch will bring you up to speed on important sales and inventory reports. This will improve your cash flow and the overall health of your business.