Why it is an awful idea to use Excel for sales reporting and what you can do about it

February 13, 2021|In b2b sales, Excel, Predictive Analytics, Sales Analysis|By Lucas Pedretti

Sales reporting is the foundation of successful sales and operations planning, controlling and analysis. It covers the process of selecting, analysing and sharing the most relevant KPIs across a sales team and a B2B organisation.

Successful companies know that sales reporting and controlling are only a means to an end. They serve to analyse, prioritise, communicate and ultimately bring teams together.

Excel is – infamously – the most famous and flexible tool for B2B sales reporting and controlling. Most sales leaders use it, love it and hate it at the same time. Excel’s flexibility typically represents more a hindrance than a benefit.

Creating sales reports with Excel usually requires long hours of error-prone manual work. Should you need to update this reporting automatically, you must program a Visual Basic script.

There are better ways to implement accurate, standardised and automatized sales reporting (or sales planning). Here we discuss why using excel is a terrible idea and what alternative you have.

Why Using Excel For Sales Reporting Is a Faulty Approach?

As a well-known fact, sales leaders are frequently confronted with decisions that require forecasting and planning based on limited information. DeCarlo, Roy, and Barone, authors of “How sales manager experience and historical data trends affect decision making” explain how, for example, trends in historical data impact two forms of predictive judgments: salesperson hiring and territory selection.

The authors argue that inexperienced sales managers tend to overweight historical performance trends. Experienced sales managers are equally biased: they tend to underweight it. How do B2B companies go about this critical performance benching mark? By accurately and automatically reporting sales performance.

These sales reports are mostly aggregated mainly in an Excel template. From this, planning and forecasts are derived. Using Excel for sales reporting, planning and forecasting is an awful idea for at least three reasons.

First, reporting sales with excel is hugely time-consuming. Add together all the hours you and your sales team are spending with excel, instead of with their customers.

Research in B2B has found that non-productive reporting time with excel could amount to up to 25% of the selling hours of an average sales representative. How much money does this waste represent? Assuming a medium ten heads team in any average B2B industry, including salary, variables, and related selling costs, making sales reporting in excel could be costing an average company € 250.000 per year. You can read more about the ROI if a sales team here..

Additionally, as any manual tool for controlling and reporting, Excel is highly error-prone. A dull moment of distraction, a comma instead of a point, subtraction instead of addition, and you get closer to a heart attack in your next sales meeting.

Furthermore, sales reports and plans in excel are static – daily, weekly, or monthly. That means you need to manually update them at the end of every day, week or month. If this manual operation is out of the equation, then programming in Visual Basic is necessary.

Using Excel for sales planning and reporting is mainly a lousy job in process-oriented sales teams. Why? Because successful sales operations heavily rely on consistency. Excel flexibility hampers any sales operations best practices.

Operational sales planning frequently involves several steps: exporting sales data to Excel from an ERP System, manipulating the data in Excel, creating sales reports and plans using the data, and finally emailing Excel sales reports to the managers waiting for them. This operation naturally creates countless opportunities for mistakes to happen.

What else speaks against Excel? Again, due to the flexibility of excel, reliable sales methods are usually ignored. Every sales rep has her way of reporting sales performance, regardless of what is an accepted best practice in their industry.

Sadly, sales managers and key account managers develop their method of creating sales reports. Standardisation? Forget it! Thus huge variation leads to confusion, lack of trust and, finally, a waste of resources. Resources that could be invested better elsewhere. For example customer acquisition, the design of new sales territories, the discovery of sales opportunities for existing customers.

Sales Reporting Tool to Help Sales Leaders Escape from The Cell

Implementing an automated sales reporting saves a B2B organisation a significant amount of time, reduces reporting errors and increases the productivity of its sales team. Already the implementation itself of an automated sales reporting itself brings any company benefits.

This last point is because of the proven fact that a healthy change in sales management leads to improved sales performance (Armstrong, Pecotich, Mills, 2013).

Performance management is probably one of the most critical tasks of a sales leader. With Qymatix sales performance view, a sales leader has in one overview visualisation, the most relevant KPIs related to the performance of her sales team.

Sales managers need to be able to answer several questions at any given time, to manage sales performance, for example:

– How should I diagnose the performance of our salespeople?

– How can I help my sales team to succeed?

– How can I set sales goals that are fair, realistic, and motivational?

By concentrating on the sales KPI that most influence behaviour, a sales leader can achieve a real impact in the human aspect of the reporting: communicating and motivating her sales team. If you want to know more about the ROI of a sales analytics tool, you can read here.

Why it is an awful idea to use Excel for sales reporting and what you can do about it – Summary

Reporting is a means to an end and not an end in itself. It serves to communicate, to improve teamwork, and to prioritise. A good sales report also services the confident prediction of future sales.

Although Excel is a favourite tool in management, it is not well suited for sales reporting. It offers no standard way to communicate and plan sales and is open to subjectivities. It is error-prone, time-consuming and – when you consider the time it takes – very expensive. There are better tools for this job.

Qymatix offers a standardised and automated predictive sales software, where sales KPIs are prioritised, and consistency is spread across the whole sales process. It saves times, money and it helps sales teams to become more successful.

Sources:

– DeCarlo, T., Roy, T. & Barone, M. (2013). How sales manager experience and historical data trends affect decision making. In European Journal of Marketing 49. Online, available here.

– Armstronga, R., Pecotichb, A. & Millsc, B. (2013). Does the Sales Manager Make a Difference? The Impact of Sales Management Succession Upon Departmental Performance. Journal of Personal Selling and Sales Management 13(4):15-24 · October 2013. Online, available here.