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Using Excel Instead of Property Management Software Is Risky Business

Posted on 30. Aug, 2010 by Mary Girsch-Bock in Technology

It’s no secret that there are a lot of Excel users in the property management community. An outstanding spreadsheet program, Excel frequently plugs in the gaps commonly found in accounting programs. But there‘s a group of property managers that may find themselves relying on Excel a little too much.

In recent years, Excel aficionados, fed up with the intricacies of accounting software products, have begun using Excel as their primary accounting software. And while there will always be success stories about those who chucked their “non-functional” accounting software for an easier life with Excel, the fact remains that using Excel exclusively as your accounting software product will ultimately cause more problems than it fixes.

Here are things Excel lacks when compared to a dedicated property management accounting software system:

Data Integrity
Excel’s flexibility, an asset on most fronts, can prove to be a detriment to those who utilize it as a complete accounting program. While flexibility in a spreadsheet program provides users the ability to customize data and change formulas when needed, the downside to using Excel as a complete accounting solution is that it customizes data and allows formula changes. Even an elementary accounting product offers a semblance of controls to ensure data integrity.

Protection Against User Error
Excel offers no double entry accounting system. The accounting equation Equity = Assets – Liabilities has been used for centuries with good reason. It keeps books in balance. And while any information entered into a computer is only as accurate at the person entering it, the fact remains that an integrated accounting program offers a level of protection that Excel cannot.

Ease of Use
You have to be really skilled in Excel in order to utilize it as an accounting software substitute. Yes, there are numerous templates available that make this process a bit easier, but in order to keep an accurate and organized record of your business transactions, you’d better know your way around Excel. In contrast, accounting software products have made it easier than ever to set up a solid financial system that requires little maintenance.

Efficiency
It’s much easier to track transactions, balance bank accounts, and produce accurate financial statements when using a traditional accounting program. Again, while it can be done using Excel, a small property management company that does not wish to spend a lot of time on accounting would be better served using standard accounting software, rather than spending hours trying to set up an Excel spreadsheet to produce the same information. In addition, some property management software programs have integrated the accounting functionality with online rent payments.

Using Excel as the spreadsheet program it was designed to be will produce more benefits to the property manager than spending hours trying to shape it into an accounting program.

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Tags: Accounting, Technology, tools