Why spreadsheets are bad for bakers

94% of spreadsheets have errors. Do yours?

94% of spreadsheets have errors. Do yours?

Spreadsheets can be bad for bakeries. In fact, they have been a cause for alarm within the wider business community for years.

As far back as 2008, studies found that around 94% of spreadsheets contained errors. An oft-cited UK survey from 2011 found that 57% of spreadsheet users had no formal training on the package they used. An amazing 72% said that no internal department checked their spreadsheets for accuracy.

Spreadsheets were originally created for accountants. Nowadays, though, they are used by anybody for any kind of data that can be arranged in a tabular format. Wrongly constructed or misunderstood formulas easily creep in, leading to bad data. Analysts reckon that firms can forfeit between 10% and 25% or their revenues per year due to bad data alone.

Yes, spreadsheets can still be appropriate for clued up number-crunchers and smaller projects. But commercial bakers need a single view of their data that is consistent, easily understood and that can be manipulated without effort.

Many new bakeries start off by setting up spreadsheets to help manage their operations. But as a business grows, its spreadsheets tend to get increasingly complicated. Frequently, there comes a need to input the same data into more than one spreadsheet. This leads to unnecessary keying errors and the costs associated with multiple data entry.

As we scope out new Cybake installations with customers, we often find spreadsheets that have been set up by different staff at different times, frequently resulting in inconsistencies between ingredient, product and customer descriptions and data. This inevitably leads to confusion and to errors in production and despatching that can be both frustrating and costly.

It is also common to come across spreadsheets that have been set up independently as price lists. These often have alternative product descriptions and no product code to positively identify products with similar descriptions. Again, this leads to confusion and the costly use of extra time when updating prices.

Expensive delays

Spreadsheets are routinely used for pricing reviews. But the spreadsheets in question take a lot of effort to update and, as a result, there can be delays to inputting price variations. At times of ingredient price inflation, each week of delay in this task can be very expensive.

The same goes for spreadsheets used for recipe costings but where ingredient costs are often not kept regularly updated due to time constraints. Plus, there are stock sheets with out-of-date product costs due to the time needed to update ingredient costs in recipes – and then to update recipe costs on the stock spreadsheet.

Added to all of the above, there is also the basic problem that all the types of spreadsheet mentioned above have often been developed by people with no relevant training and contain errors. These errors may be minor but they still have consequences in terms of operational performance and efficiency.

How can a bakery management solution like Cybake help? For a start, Cybake uses one code and one description throughout for ingredients, products and customers. This consistency avoids confusion and potentially expensive production and dispatch errors.

Cybake’s purchase ordering module ensures that the cost price of ingredients is always up to date and it automatically keeps recipe costings updated. As recipies are also updated automatically, pricing reviews can be carried out as needed using Cybake’s standard reporting. Similarly, stock cost prices are always up to date. This reduces the likelihood of stock inaccuracies on management accounts.

Overall, the ability of a bakery management solution to interface with accounts software such as Sage delivers both operational and financial controls that are simply not achievable with spreadsheets. Crucially, this includes detailed sales and profit analysis that drills down to individual customers and products.

Using Cybake – from purchasing through to sales order processing and invoicing – will give you a truly integrated solution with all its associated benefits. If you are struggling with spreadsheets, why not get in touch?

About Robert McIlroy

Cybake Implementation specialist Robert McIlroy is a bakery industry veteran who also sits on the board of a four star hotel. You can follow him on Twitter at @Rob_CyBake.