While many financial applications have been launched over the years touting their ability to ârid companies of error-prone spreadsheets,â it seems we are no closer to giving spreadsheets up. So why continue to shame those of us who use them?
In 2015, Excel celebrated its 30th birthday, a remarkable feat considering for the past 10-plus years we've been regularly hearing about Excel's likely demise. In fact, according to recent research from Forrester, the majority of organizations (63 percent) still build most (more than 50 percent) of their business intelligence applications based on desktop tools, such as spreadsheets. These statistics confirm what many already know, but don't want to admit: Spreadsheets are still widely used today.
Excel spreadsheets have stood the test of time because they continue to provide the flexibility that accounting departments need and accountants require. There is no waiting for IT to make changes to systems, no workarounds necessary, and no compromises. For complex calculations where data is continually changing and those that require the use of cell functions, Excel is often the (secret) go-to tool to get the job done.
Spreadsheets today are used for budgeting, forecasting, financial reporting, determining tax computations, operational analysis, and much more. It is well-known that spreadsheets alone are not perfect. By themselves, they provide little-to-no protection against data corruption, no way to validate numbers or error checking, nor do they offer the transparency accountants require today.
As many accountants have learned first-hand, just double-checking numbers will not cut it. However, when combined with spreadsheet management technology, errors can be significantly reduced, and in many instances eliminated. Unfortunately, most organizations do not utilize spreadsheet management solutions merely because they are unaware this technology exists.
As we enter the new year, my wish is for open dialogue about this wonderful tool (Excel) and, of course, the sharing of information so together we can make it even better. To get the conversation started, consider these tips when working with spreadsheets:
Identify critical spreadsheets. Understand which spreadsheets are most critical to the business, such as financial close and tax data, income and expense detail, etc. Once critical spreadsheets are identified, put processes in place to ensure they are regularly reviewed for risk.
Understand where risks may hide. With critical spreadsheets identified, the next step is to take a methodical approach to understanding where risks may hide. Hidden cells, currency calculations, and transposed numbers are some of the most common issues.
Garbage in, garbage out. Making strategic business decisions based on good, clean data is essential for accounting success. When data is incorrectly entered at the start, the consequences can be significant and costly later on. This is particularly true when dealing with compliance and financial close reporting. Substantial amounts of data are aggregated into spreadsheets and often shared among multiple people. Maintaining the accuracy of business data is essential.
Don't go at it alone. Simply pretending spreadsheet use is not happening clearly won't work. Rather than turning a blind eye, embrace Excel. Rather than using Excel in a silo, consider implementing automated risk and analysis solutions that provide the necessary control and insight into potential risk and errors that may be hiding in spreadsheets, regardless of where they reside on a network or how many exist. These solutions provide visibility into who is working on a file, how many people are working on them, when something changes, what changed, and who made those changes. The ability to monitor and track information over a period of time provides valuable insight into whether policies are being met while making it significantly easier for accountants to identify potential risks.
Sadly, most organizations do not utilize spreadsheet management solutions merely because they are unaware this technology exists. It is my hope that with an open dialogue together we can create greater awareness of spreadsheet management technology that helps improve upon the already excellent Excel spreadsheet.
About Diane Robinette
Diane Robinette is the CEO of Incisive, a spreadsheet management software company.