You probably use Excel a lot in your day-to-day work. You might even store all of the accounting data for your investments in Excel spreadsheets. After all, Excel is consistently voted one of the best spreadsheet programs around due to its flexibility, functionality and ease of use.

But Excel isn’t an accounting program. There is no verification mechanism to assess accuracy. There is no double entry. There is little organization to the numbers beyond what you construct, and there are limited options to validate that the data you entered makes sense.

While Excel is an excellent spreadsheet tool, it has limitations. Making it work for the complex accounting that you do every day takes manual entry from many files and a lot of workarounds. Even if you take all of your information, put it in a spreadsheet and build pivot tables and cross-tab functions to organize and process the data, what happens when a number comes up wrong? Where’s the audit trail and how do you track that wrong number and its underlying information?

At the end of the day, a spreadsheet is a list. Building the spreadsheet typically relies on manual input — where the chance of keying errors is high — and there are no tools to help you find mistakes quickly. When issues arise, you’ll waste time searching for the right line in the right tab in the right spreadsheet. Plus, there are no security controls or multi-level user verifications to ensure a secure interface.

Specialized software built to work with databases organizes information to help you process and manage data efficiently. Database-driven accounting software can harness your computer’s processing power to perform complex calculations and data manipulation. It can accommodate direct feeds from many third-party systems for automated download of information that will eliminate error-prone manual entry. And, it provides reporting and security options that Excel can’t match.

Here are three ways a database-driven accounting solution can help you:

• Keep better records. Accounting is all about getting the details right. It’s about being able to locate, store, document and report on information to meet complex regulations, tax requirements and client requests. How many Excel tabs and files do you want to sift through to find information? If the answer is none, you need specialized accounting software built around a database.
• Get answers fast. When your client has a question, you need to find an answer quickly. Maybe the information is in an existing report, maybe you need to run a new report, or maybe the answer requires you to sort the data differently. A database solution provides the tools to compile those details and respond with the answers – and the reports – at the drop of a hat. Not only will your clients be happy with the rapid turnaround, but delivering superior customer service is a strategically wise move since it can be a significant differentiator in a competitive market.
• Leverage compatibility with other technology. If your firm is like most, you’re likely using a variety of software, such as a general ledger, CRM, OMS or cash management system that relies on or produces accounting data. You’ll need to export and import data so that everybody is working with the same numbers. Excel doesn’t export very well; it’s still just a list. Databases are flexible — they allow information to flow in as well as out using whatever form works best.

The technology you use to maintain accounting records should work with existing processes to streamline workflow and make your life easier. If you are still using Excel for all your accounting, you are doing unnecessary extra work that can be dramatically reduced with the proper accounting software.

FundCount is built around a database that ensures quick access to accurate data that you can output as easy-to-read reports. Find out how the FundCount database-driven investment accounting and analytical solution can help you work smarter. Request a demo today.