Are you using spreadsheets to track and manage your tools, heavy machinery, and other equipment?
We understand, as many people still do.
However, while spreadsheets have been a staple in business operations for decades, they may not be the most suitable tool for handling the complexities of fixed asset management, especially in asset-rich industries like construction.
While these familiar tools offer flexibility and ease of use, they inadvertently introduce risks and inefficiencies that could hinder a company’s growth and profitability.
That’s why we’re going to be delving into the drawbacks of using spreadsheets in this article, as well as taking a look at some alternative approaches to fixed asset management.
Let’s begin with the problem #1.
In this article...
Lack of Automation
The saying “time is money” holds particularly true in the construction industry, where the speed of project completion can make or break a company.
In this sector, therefore, the demand for efficacy leaves little tolerance for labor-intensive, outdated, and time-consuming procedures.
Using spreadsheets for fixed asset management and tracking embodies exactly that—an inefficient approach.
Managing your machinery, tools, and other equipment through this method is almost like juggling a couple of full-time jobs simultaneously, as every single change in the asset inventory requires a manual update of the records.
Considering the substantial volumes of data involved—every purchase and disposal, as well as depreciation, audits, usage, and insurance updates for each and every fixed asset—the task quickly becomes overwhelming.
In asset-heavy industries like construction, the absence of automated processes directly translates to lowered performance, there are no two ways about it.
Recognizing this, industry experts like Brandon Rakers from Komatsu advocate for technology, heralding a new era in how we run our operations.
Automated technological solutions can be a real game-changer, saving time, eliminating errors, and enhancing operational efficiency on all fronts, including asset management.
With these systems, no longer is there a need, for instance, for unnecessary trips to job sites to share project information with workers or for making tedious phone calls trying to figure out the whereabouts, status, or availability of your equipment.
Instead, all data can be stored, updated, and accessed on the go, in real-time.
What’s more, businesses are catching on to this digital revolution because, well, it works.
A report by Deloitte highlights the results of this widespread tech adoption.
With 96% of companies reporting that technology has improved their operations, it’s undeniable that all these new apps and software can be extremely valuable.
Spreadsheets, on the other hand, simply cannot compete with advanced systems, in part precisely due to their inability to automatically update the asset information.
But unfortunately, this is not the only area in which they fall short.
Lack of Asset Tracking Features
Say you do appoint a dedicated individual whose sole responsibility is to sit in front of the computer and update the spreadsheets every second.
Would that be almost as effective as having an automated process?
Well, it depends.
As long as this newly appointed executive spreadsheet updater inputs the correct data, it might seem plausible.
However, consider this:
Can this person keep track of all the ongoing changes in your asset inventory?
Can they provide the current GPS location of a specific machine, the person using it, or the anticipated return time?
Probably not, because spreadsheets weren’t meant to be used for asset tracking anyway.
Now, let’s address the consequences of not being able to monitor your property effectively.
In short, failure to do so increases the likelihood of equipment damage, loss, or theft—already a significant problem in the industry—leaving you exposed to risks like disrupted workflow, unplanned downtime, and project delays.
Just imagine the time it takes to find that missing tool or the stress of having a valuable machine stolen.
If you’ve encountered similar situations, you’re already familiar with the financial and mental toll they take.
Spreadsheets simply lack asset tracking capabilities and are, therefore, unable to protect your business or your equipment.
We at GoCodes, on the other hand, made this our mission.
Our automated, cloud-based asset management and tracking software was meticulously developed with complete asset visibility in mind, without compromising user-friendliness.
Each action triggers an automatic location update, providing you with real-time information about a particular machine’s whereabouts and its current user.
All in all, investing in proper fixed asset management software means investing in peace of mind.
With such a solution, you can rest assured that every tool and machine is accounted for and precisely where it should be, while the data you have in front of you is up-to-date and accurate.
In an industry where every second counts, an automated system goes beyond spreadsheet limitations, acting as a reliable and efficient guard for your assets.
Susceptibility to Human Error
The Achilles’ heel of spreadsheets is definitely the fact that they have to be manually updated, which not only slows things down but leaves plenty of room for oversight.
Let’s be realistic; despite even the best of intentions, human involvement often translates to human error.
From innocent typos to full-blown miscalculations, there are numerous stories on the internet highlighting how Excel blunders have led to substantial financial losses for companies.
Acuity Training’s survey on Excel proficiency delves deeper into the issue of spreadsheet errors, revealing that, surprisingly, only 48% of individuals have ever received some formal training in Excel.
Interestingly, the study also shows that 12% of spreadsheets harbor serious errors, with an equal percentage of respondents admitting to witnessing costly mistakes in Excel.
However, these errors don’t cost you only money, but also time.
Survey respondents expressed they needed assistance with Excel issues from their colleagues at least twice a week, with the average problem taking approximately eight and a half minutes to resolve.
But, why are those seemingly minor oversights such a big problem?
A typo or two won’t necessarily bring ruin to your business, sure, but keep in mind that every decision you make for your company depends on the information presented in these spreadsheets.
Now imagine building your empire on a foundation of inaccurate, outdated, or incomplete data.
Autodesk, in their “Harnessing the Data Advantage in Construction” report, echoes this sentiment.
The report reveals that, in addition to causing 14% of global rework, “bad” or inaccurate data results in poor decisions almost half of the time.
How can you expect to properly allocate your assets, identify potential risks, or make the right choices when it comes to equipment acquisition or life cycle management, if your asset records are riddled with mistakes?
This is why using spreadsheets for fixed asset management is a risky practice and one to be avoided.
In the simplest terms, this approach jeopardizes a company’s overall success and profitability by compromising the accuracy and reliability of crucial data.
Your business decisions should be based on accurate facts and not chance or avoidable mistakes.
However, we would be remiss if we didn’t acknowledge that spreadsheets have some advantages, too.
They are cost-effective to implement as well as use, almost anyone is already at least somewhat familiar with this system, and they don’t necessitate any formal training (although this last point could be debated).
As such, they can be used by everyone, everywhere.
Consequently, they’re not a bad solution for smaller businesses that are just starting out and don’t yet have that many assets to keep track of.
Nevertheless, as your company expands and its asset portfolio grows, navigating through numerous spreadsheets becomes increasingly challenging.
Digital solutions, on the other hand, streamline processes, regardless of the company size.
Asset management systems, for example, grow alongside your business, instead of impeding its growth like spreadsheets often do.
This is partly because, with these solutions, fixed asset management evolves from being a one-person task to a collaborative effort.
Everyone on the team is involved in updating information, resulting in fully scalable, comprehensive checkout and maintenance logs, along with asset lists equipped with all the necessary data for well-informed decision-making.
In the end, you need a system that adapts to your needs, not the other way around.
Unfortunately, spreadsheets are not designed for such flexibility.
Poor Data Visibility
Another attractive aspect of spreadsheets is their simplicity—what you see is what you get.
This can be an asset in certain contexts, where a clutter-free interface and basic functionalities are enough to do the job.
However, this simplicity can also be a drawback.
Efficiently managing assets throughout their entire lifecycles requires more than just an accurate asset list; it demands the ability to analyze performance, predict maintenance needs, and make strategic decisions on equipment allocation.
Unfortunately, spreadsheets fall short in this regard due to their lack of robust reporting and analytics capabilities.
As any adept decision-maker will emphasize, data shouldn’t only be collected; it also needs to be analyzed in a meaningful way.
Bill Vellante, vice president and general manager for Infor, highlights the industry’s data overflow.
According to him, the key lies in identifying information that can help you make the most out of your resources.
And to find that information, you need asset management systems that come equipped with reporting and analytics features.
By allowing users to create customized reports, charts, or dashboards and share them with their team, these features enable the identification of underperforming equipment, machine hoarding, or poorly allocated equipment, before any potentially serious problems arise.
Moreover, they provide a holistic view of your assets by offering insights into maintenance schedules, warranty information, and financial summaries.
Successful businesses simply cannot operate without these tools.
At the end of the day, spreadsheets offer only a surface-level overview of assets and cannot provide the comprehensive insights necessary for effective decision-making.
While spreadsheets have been a go-to tool for many companies for a long time, the drawbacks outlined in this article highlight why it’s important to explore alternatives to such an approach.
Dedicated fixed asset management software solutions offer far more robust features, improving data accuracy, and providing better support for the evolving needs of businesses in this competitive industry.
In short, investing in specialized tools will lead you to better financial decision-making and, ultimately, success.
So, leave the spreadsheets where they belong—in the past—and embrace the progress.
You’ll see the results in no time.