Spreadsheets have been used for years as the solution to record common costs. From group vacations, to budgets, roommates to shared projects, many people use spreadsheets to keep track of who paid what and to figure out balances.
Although spreadsheets appear to be a quick and easy tool, they can end up causing more issues than they solve. Shared costs are becoming more complicated, and together they can make working with a spreadsheet quite tricky, and prone to errors, confusion and unnecessary stress.
The Problem with Manual Data Entry
Some of the drawbacks of spreadsheet are that each expense has to be manually keyed in. All shared expenses like dining, travel, rent, utilities, and others must be manually updated every time someone pays for them.
It is a time-consuming operation and prone to human error. One typographical error, a missing entry or a wrong formula can ruin the whole balance calculation.
The more expenses a company has, the more difficult it will be to maintain the accuracy of the spreadsheet.
Limited Real-Time Collaboration
Shared costs usually are the responsibility of more than one person. Sadly, spreadsheets aren't always the right tool for collaboration in real-time.
Data may be entered in the wrong place, altered, or overwritten, and the members may be using old copies of the spreadsheet. This can result in conflicting information and confusion about the actual balances.
These collaboration problems are eliminated with modern expense-sharing tools, which give instant updates for all parties involved.
Difficult Balance Calculations
When the number of your expenses is small, the calculation can be simple in determining who is responsible for what. But when group finances get complicated it happens soon when:
There are several people contributing to various costs
There is disproportionate cost distribution
Some costs are charged only to some group members
A proportion of the repayments are made
There are several currencies involved.
These situations can be difficult to handle in a spreadsheet, and can involve complex formulas and calculations. Even if you are an expert at working with spreadsheets, you can make mistakes.
Lack of Transparency
When expenses are share, it is important to be transparent. Expenses, balances and payment history should be easily visible to all.
With multiple tabs, formulas and calculations, spreadsheets can become very cluttered and hard to understand. Group members may have trouble verifying balances or comprehending how balance was achieved.
This confusion may result in conflicts and suspicion.
Poor Mobile Experience
The majority of expenses shared are associated with the movement of people. People who travel, live in an apartment with roommates, or are part of a group often have to log expenses as soon as they pay for them.
Not all the time it's easy to access a spreadsheet on a mobile device. Working with large spreadsheets, entering formulas and editing cells can be frustrating when working on a smartphone.
Expense sharing platforms that focus on mobile use are dedicated to this purpose.
No Auto Expense Split was needed .no Automatic Expense Split needed.
Spreadsheets are probably most limited by the lack of automation.
All calculations, balance adjustments and repayment updates typically need to be done by hand. When costs climb, keeping the spreadsheet up to date can get tedious.
Today's expense sharing apps do the following automatically:
Track expenses
Calculate balances
Split costs fairly
Record repayments
Show who owes what
This can save a lot of time and decrease mistakes.
A Better Alternative
Many groups now use an expense-sharing platform rather than using spreadsheets. SplitPilot simplifies the process of tracking shared costs, splitting bills, and handling repayments with ease, freeing up time from complex formulas and manual calculations.
Looking to pay the bills as a group? Check out SplitPilot's expense sharing platform.
Also, you can find more tips and guides about shared expense management in the SplitPilot Blog.
Final Thoughts
For very simple situations the spreadsheet can be used, but as the shared expenses increase, it can often become inefficient. Expense management can be unnecessarily difficult due to manual data entry, calculation errors, collaboration problems, and lack of transparency.
A dedicated expense sharing tool is a quicker, more precise and more transparent method for handling the money of a group. Expenses can be a source of confusion, whether you are travelling, accommodation for roommates, or arranging joint activities, modern ways of sharing expenses can help clear the confusion and make managing money much easier.