If you're storing business data then the answer is an immediate "no". If you're an individual storing your grocery or gift list, then you can use a spreadsheet.
In a nutshell: A spreadsheet is for data analysis. A database is for data storage. We frequently see customers using spreadsheets as their database to manage lists of permanent data like customers, products, vendors, pricing, projects, etc. In our 14+ years developing applications we have not come cross any circumstance that warrants storing permanent data in a spreadsheet. First of all, what do we mean by permanent data? Permanent data is information that is core to a business in order to function. For example, a business gets and loses customers from time-to-time but it must have at least one customer. So customer data would be considered permanent. Spreadsheet Limitations- A spreadsheet is great at number crunching, performing what-if analysis, and performing financial functions on business data. Spreadsheets are great tools for this because each cell in a spreadsheet can contain text, numbers, percentages, etc. And it is that freedom that makes a spreadsheet a poor option for storing permanent data as that data requires fields to be a fixed format (i.e. text, numeric).
- Businesses often get data from a variety of sources, such as price lists from manufacturers. Often times you will copy the data from one spreadsheet into your "master" spreadsheet. Unless you take particular care you can also copy the source spreadsheet's formatting into your "master" spreadsheet which can create havoc if your spreadsheet has VLOOKUP or HLOOKUP functions.
- Spreadsheets also have limitations to the number of rows it can store. Until Excel 2007, Excel could only store 65,536 rows. While this may seem like a lot depending on your records, it's nevertheless a fixed limitation.
- The larger a spreadsheet gets (the more rows and columns of data) the slower it will perform, especially if you have lots of calculations.
- Performing a lookup (finding records) can also slow down the more records you have because a spreadsheet does not support column indexes.
- If you have business data stored in multiple spreadsheets (i.e a spreadsheet for customers, another for vendors) it is difficult to report on that data. This also occurs even if you use multiple worksheets in a given workbook.
- Spreadsheets on a desktop computer are designed to have only one person accessing it one time. Online spreadsheets, such as Google Docs, provide multi-user functionality but it does not provide record locking. Two people can change the same data at the same time without regard to data integrity.
- Data integrity in spreadsheets is an issue, especially related to people using the sort function. For example, you sort your contacts by last name but not any other columns. You're data integrity is immediately compromised, possibly permanently depending on when you realize the error.
- When you open a spreadsheet, you're opening all the records at once. In other words if you have 20 worksheets and each have 1,000 rows you're opening up 20,000 rows. That can get very memory intensive and cause slow performance, especially if the spreadsheet has lookups and calculations.
So what is a better option for storing your business data?Databases are designed to store large amounts of data. They collect, manipulate, filter, and report on this data. Read our Database Management section to learn more. We see people confusing markup and margin when calculating a sell price. The terms markup and margin today are used interchangeably to mean gross margin but this is a misunderstanding and can have a big impact on your bottom line. Let's define each term: **Markup Percentage**- percentage difference between an item's actual cost and the selling price.**Gross Margin Percentage**- percentage difference between the selling price and the profit.
## How to Calculate a Sell Price Using Markup PercentageA markup percentage is an item's cost times a markup percentage plus the original item's cost. In a formula that is: Markup % = (Cost x Percentage) + Cost If an item's cost is $100.00 and you want a 25% markup, the selling price would be $125.00. Using the formula it would read: ($100.00 x 0.25) + $100.00 Another way of performing this calculate is to take your desired markup percentage as a whole number and add a "1." in front of it. If you want a 25% markup then your number would become 1.25. Multiply your item's cost x 1.25 and you'll get the markup price. The formula would be: Cost x 1.25. If your item's cost is $100.00 the formula would be: $100.00 x 1.25 = $125.00. ## How to Calculate a Sell Price Using Gross Margin PercentageGross margin is the difference between selling price and cost. This difference can be expressed as a percentage of selling price. In a formula it is: Gross Margin % = Cost / (1 - Percentage) If an item's cost is $100.00 and you want a 25% gross margin, the selling price would be $133.33. Using the formula it would read: $100.00 / (1 - .25) ## So What To Use: Markup vs Margin?Using markup to set selling prices overstates the profitability percentage of the transaction. Calculating selling price in gross margin terms you can compare the profitability of the transaction to the economics of a financial statement. By targeting a gross margin percentage vs the markup percentage you can add an additional 2 to 3 percent profit to your bottom line.
Sales people often think in terms of markup percentage. CFO's, operations, accountants, and other financial professionals think in terms of margin percentage. Train your sales people to use gross margin percentage and your bottom line will be better off. |
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