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Spreadsheets and Accounting – Is it Time to Move On?

 


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Since its first introduction, the use of spreadsheet technology has become wide¬spread. It’s accessible, affordable, powerful, simple and intuitive to use. But more than 25 years have now passed, should we move on?

Understanding the popularity behind spreadsheets in accounting
There is no doubt that spreadsheets can be extremely useful tools and require very little knowledge in order to quickly develop complex models, from monthly management reports through to annual budgets. The endurance of their popularity is staggering, but it is quite understandable when you think that many accountants and financial professionals would prefer to stay within their com¬fort zone whilst ignoring all the inefficiencies of spread¬sheets.

As the demands and scale of businesses have changed, the humble spreadsheet has struggled to keep up and there is more and more debate over whether its limitations are actually slowing down the growth of an organisation. So what is exactly wrong with spreadsheets?

Certainly one of the biggest problems with spreadsheets is their ac¬curacy. Studies have revealed that 90% of all spreadsheets with 150 rows had errors. This is of course human error, and the likelihood of spotting these mistakes gets smaller and smaller with every change that’s made to the file.

So how can you reduce the reliance on spreadsheets?
I think we all agree that there’s a place for spreadsheets, they’re still a great tool for a number of tasks. But the lack of security and the likelihood of human error means that substitutes must be explored. The answer? Use a modern piece of accounting software, one that integrates with other systems and is available to non-financial staff, keeping all finance data in one place. Here are some more examples of why spreadsheets can be unreliable, and how devolved accounting techniques can solve these problems.

There’s no formula for control
What happens when workbooks are distributed and worked on by a variety of users at different locations? If there is a change in formula in one document, there is no safety mechanism to ensure that this has been amended in all the others. With a devolved accounting system, the work previously done in Excel can now be carried out within the accounting software. This increases accuracy of the data stored as it’s going to be updated in real-time.

Security and the ever-used ‘cut and paste’ function
Within the spreadsheet itself there are other pitfalls to consider. Because it is simply a file, it lacks security in terms of how and by whom it is accessed and there is also the danger of it simply being deleted.

Duplicating information can also be a major headache, because you are often cutting and pasting information from one system to another without taking into account that the data may well have already changed by the time it is put back into the system.

Nowadays, it’s easy to get your accounting software inte¬grated with all your other applications, so all the data is stored centrally. No more duplicating data or re-keying in numer¬ous times. All data is always synchronised in real-time.

So, try and look beyond the rose-tinted glasses when thinking about spreadsheets. Yes, they’re intuitive and sit within our comfort zone. But try to take a few minutes to think about how much time and money could be saved through eliminating inaccuracies and duplications – there are alternatives out there!

BluQube provide a comprehensive finance & accounting solution designed to assist your organisation solve everyday financial business challenges in practical & simplified way. Our accounting software allows you to adopt an online accounting & cloud accounting system. We also offer a range of support & value-added services including outsourcing of financial tasks, bespoke software development, financial reporting & more.

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