Excel Spreadsheets – Do They Still Have a Place in The Finance Department?
From Excel to excellence for the month-end close reconciliation process.
As a financial accounting professional, it is almost certain you will have been using Microsoft Excel spreadsheets during the month end close process. It is also extremely likely you will have experienced problems with them too!
Over the last thirty-odd years, spreadsheets have become a mainstay in finance departments, used for all sorts of tasks, from reconciliation to reporting and everything in between. Despite their popularity with finance staff, they still pose a massive margin for error. The expected error rate when reconciling with spreadsheets is 0.8-1.8% and though this may seem small, for a company with a $1m turnover this represents a risk of $80,000-$180,000.
What’s more, the damage done can also affect public perception and trust in your brand, leading to less tangible but just as dangerous losses.
Is it possible to move away from spreadsheets?
For smaller businesses, the number of accounts needing to be reconciled is relatively small, so it makes sense for smaller businesses to continue using a combination of spreadsheets and QuickBooks. In turn, the team that manages the financial close process will also be relatively small, perhaps just one or two finance staff, so there is also less room for data handling errors.
However, as the number of accounts to reconcile grows and the team managing your monthly close process is expanded, errors can easily worm their way in to the reconciliation process. Once a business has grown, it makes sense to move away from Excel spreadsheets and QuickBooks, particularly for tasks like reconciling. At its capacity, the finance department of a large organisation can generate up to five hundred spreadsheets a month – so it’s easy to see how errors and duplications can creep in.
Will the finance department ever rid themselves of Excel spreadsheets completely?
It seems unlikely that Excel spreadsheets will disappear from the finance department completely; admittedly, they are still a really useful tool for auditing, even for very large businesses (of 1,000+ headcounts) and they will probably remain the go-to program of choice for creating graphs and charts.
However, businesses that are managing to grow and are serious about both productivity and regulatory compliance will likely move their reconciliation and monthly close process to specialist programs, as opposed to makeshift spreadsheets. Especially as the need for advanced reporting and intuitive financial analysis expands beyond the capabilities of Excel.
Businesses who are serious about both productivity and regulatory compliance should look to specialist reconciliation software packages from Adramatch