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by Lentune on 6 June, 2024
If you’re working in the construction industry, chances are you’re no stranger to the convenience of spreadsheets.
They’ve long been the go-to tool for managing everything from supplier invoices to calculating timesheet allowances.
But as technology evolves, so do the options for unlocking a smarter and more efficient financial workflow.
In this article, we’ll explore the advantages and disadvantages of sticking with spreadsheets versus embracing new software solutions for your business. Let’s dive in.
Why construction businesses still use spreadsheets
There's no doubt spreadsheets aren't the most efficient or time-friendly system. So, why are they still so prevalently used in the industry?
One of the primary reasons is familiarity. Excel has been a staple in businesses for decades, and many employees are comfortable using it.
This widespread adoption means most team members already possess the necessary skills to navigate and manipulate data in Excel, reducing the learning curve associated with transitioning to new software.
Another key factor is the flexibility of Excel. Unlike many software solutions that offer predefined functionalities, spreadsheets provide users with the freedom to customise templates and formulas to suit their specific needs.
Whether it’s tracking project expenses, managing budgets or calculating overtime allowances, spreadsheets can be tailored to match the unique workflows and requirements of construction businesses.
Thomas McIlheran, vice president of finance at Chargify, aptly describes Excel as “the glue that binds imperfect systems and processes together.”
“It can be a crutch to bring organisational processes or reporting together, but ultimately the business will, and must, outgrow Excel,” he continues.
Despite their familiarity and flexibility, spreadsheets are not without their drawbacks. The remainder of this article will explore the disadvantages of spreadsheets and the benefits of smarter construction software.
The disadvantages of spreadsheets
1. Spreadsheets destroy productivity
Productivity growth in the construction sector has trailed other major industries by 25% over the past 30 years. One of the primary reasons is the industry’s heavy reliance on manual processes.
With spreadsheets, businesses find themselves bogged down by tedious manual data entry and correction tasks, eating away valuable time and resources.
Studies suggest that organisations spend about 10 hours per week on manual data entry and correction using spreadsheets.
Not to mention the month-end close — it can often stretch into days or weeks as teams struggle to reconcile spreadsheets, identify errors and ensure accuracy.
In contrast, modern solutions like Lentune automate these processes, saving time, reducing errors and enabling teams to focus on strategic initiatives.
For instance, take the Exclusive Linings transformation, where Lentune saved them 40 hours a week, allowing the team to redirect their efforts towards value-add tasks.
2. Spreadsheets lack data reliability
Relying on Excel to be your single source of truth is often problematic. BLR Provincial Construction told us before using Lentune they “could never get an accurate profit and loss on any project.”
Because they were relying on so many different systems, including Excel, ensuring data accuracy and consistency became a constant challenge.
It wasn’t until they adopted a centralised digital system like Lentune that they found their source of truth. Says their Administration Manager, Danielle Cole,
“The way I see it now is that if it’s not in Lentune, then it’s not part of the project… for the first time, we actually have a system we have confidence in.”
3. Spreadsheets limit scalability
As construction businesses grow in scale and complexity, the limitations of spreadsheets become more apparent.
With more data, more projects, and more employees, reliance on spreadsheets can stunt a company’s development.
Take, for example, the HEB and Downer joint venture; they faced the complexities of managing a large-scale, multi-million-dollar project with an entirely manual accounts payable process.
This setup was not only time-consuming but also prone to human errors, leading to short payments to suppliers. As the volume of invoices soared beyond 2000 per month, the need for a scalable solution became undeniable.
Recognising these challenges, the HEB and Downer joint venture turned to Lentune for automation. By integrating Lentune’s invoice automation module, they were able to streamline their operations, enhance data accuracy and significantly reduce their administrative workload.
This shift not only improved efficiency but also had a profound impact on their bottom line.
“The cost-benefit ratio of Lentune is extraordinary. I could have saved at least $100,000 a year, either in salary or by regaining my lost time,” says their Finance Manager, Andrea Compton.
4. Spreadsheets create business risks
Spreadsheets can unknowingly become a ticking time bomb for businesses.
Picture this: an Excel whizz on your team crafts a masterpiece of a spreadsheet, customised to fulfil the immediate needs of the project.
It’s a solution that seems efficient at the time. However, this seemingly convenient setup can quickly become a single point of failure in cases of employee turnover or unexpected absence.
Moreover, spreadsheets have a knack for breeding inconsistency and deviation from standard practices.
Without clear guidelines or standardised procedures, individuals tend to develop their own methods for data entry, manipulation and reporting.
As a result, the same dataset may yield different reports and interpretations, leading to discrepancies and confusion.
What happens when you ditch spreadsheets for smarter construction software
Switching from spreadsheets to smarter construction software isn’t just a minor upgrade — it’s a transformational shift that propels your business forward.
By embracing construction software, companies can streamline operations, enhance data accuracy and scale their processes. Here’s what you can expect when you make the switch:
1. Time-saving magic
One of the most immediate benefits of moving away from spreadsheets is the significant time savings. Our customers report a 70% reduction in admin time on average.
This is because construction software automates many of the tedious tasks associated with manual spreadsheet management, from data entry to complex calculations and report generation.
By reclaiming these hours, your team can focus on more strategic tasks that contribute directly to project success and profitability.
2. Enhanced visibility
One key advantage of switching to smarter construction software is the vastly improved visibility it offers across all aspects of your projects.
Unlike traditional spreadsheets where updates may lag or data needs to be compiled from various sources, construction software provides real-time visibility into every facet of your project.
This means you can track costs, progress and resources as they happen, without waiting for updates to be manually entered.
With this level of insight, decision-making becomes more informed and responsive, allowing you to adjust tactics on the fly and manage budgets more effectively.
3. Smoother processes
Construction software also streamlines the workflow, creating a more organised and systematic approach to project management.
By integrating various aspects of your operations — from procurement and scheduling to compliance and billing — these systems help funnel work through predefined pathways that reduce errors and inefficiencies.
This organised approach ensures that processes are not just scattered or ad hoc, but are instead aligned with best practices that drive consistency and quality across projects.
4. Achieve remote workflow
Unlike spreadsheets, which often become siloed, modern construction software promotes collaboration across your team.
With cloud-based systems, team members can access the same data from anywhere, at any time, and on any device. This accessibility improves communication and coordination among team members, whether they’re on-site or in the office and ensures that everyone is working from the most current set of data.
Wrapping it up
While spreadsheets have long been a cornerstone in the construction industry, the need for increased productivity is steering businesses toward smarter, more efficient tools.
Embracing construction software not only streamlines operations but also supports more strategic decision-making.
With features like real-time data visibility, automated workflows and enhanced collaboration, construction software can significantly boost both the productivity and scalability of your operations.
Moving away from spreadsheets might seem daunting, but the long-term benefits of integrating advanced software solutions into your business strategy are undeniable.
Curious to see how it works?
At Lentune, we build smarter construction software to liberate your financial workflows, transforming manual spreadsheet tasks into automated, efficient processes. We’d love to show you how it works!
In a live demo, we can answer any questions and show you how Lentune could help grow your business.