We all have a love or hate relationship with Microsoft’s Excel or Google’s Sheets spreadsheets.
A spreadsheet is the ideal tool for quick calculations and usability. The issue can be that the overall implementation of the solution is too straightforward.
Your data could suddenly corrupt or get a dreaded error without your knowledge if one formula is off!
Businesses have suffered millions of pounds worth of losses as a result of small spreadsheet errors. JP Morgan Chase lost $6 billion in trading during the London Whale fiasco as a result of a spreadsheet error, and Barclays mistakenly bought 179 contracts when buying Lehman Brothers’ assets because the cells were hidden rather than erased.
Spreadsheets make it simple to quickly gather data, analyse it, and get input from members of your team.
Where does it get challenging? As businesses expand and sheets become larger and more complex, accuracy is suddenly questioned.
It’s critical to realise that the 2008 financial catastrophe may have been caused in part by bankers’ excessive reliance on the information contained in their Excel spreadsheets.
Financial teams must eventually abandon the use of spreadsheets. For the following reasons, you should consider spreadsheet alternatives for reliable financial modelling:
1. Spreadsheets cause financial models to break.
Spreadsheets are commonly used by users to develop their financial models due to the application’s relative ease.
You can use a variety of functions and formulas to duplicate and link sheets and values. Additionally, you can use macros to automate various activities. As data accumulates and the spreadsheet becomes more complex, financial models fail for the following reasons:
- Inadequately carried out operations
- Human error and carelessness
- Inability to interpret and manage a lot of data
- Too few multidimensional data models exist.
- Outdated and unrelated data
Spreadsheets frequently prove useful for conceptual planning tasks like budget creation. But once you start considering cross-functional data elements like cash flow and personnel estimates, the “flat” data model is insufficient.
Finance teams regularly review data and use data checks to proactively prevent errors in order to get over the limitations of the simple spreadsheet.
Building a system of checks on top of existing financial models is difficult, if not impossible. Additionally, this method makes spreadsheets frequently hazardous and unreliable.
To prevent this, you can aggregate massive volumes of data in real-time using an integrated and intelligent business platform.
The end goal, which is to produce accurate, fast, and scalable financial models, was not intended for spreadsheets.
2. Spreadsheets Can’t Change as Your Team Does.
Spreadsheets are frequently the best solution when the amount of data is constrained, and the spreadsheet is mostly controlled by a single user. The spreadsheet’s database expands over time as additional team members start to contribute to the data collection.
Due to their size limitations, spreadsheets cannot offer the flexibility and granularity required for corporate data. This frequently makes it difficult for managers to make timely decisions.
Data must be manually entered into cells on many spreadsheets and validated before processing because spreadsheets cannot manage reporting.
It’s crucial to remember that developing companies get their data from a range of sources, such as departments and even outside vendors. Consolidation and alignment quickly turn into a versioning nightmare when all of your scattered data is handled, saved, and modelled in spreadsheets.
3. Maintaining trustworthy, real-time data is difficult.
Even though more than 90% of spreadsheets include significant errors, more than 90% of users still think their spreadsheets are error-free.
You can keep reviewing the sheets, looking for errors, correcting them, and fixing the macros. This does not change the reality that manual monitoring and fine-tuning of your models is difficult. With vast amounts of data, it might not be able to discern whether or not all potential issues have been fixed.
Imagine having to go through this each time management requests a status update from your staff.
For beginners or start-ups with small teams, spreadsheets may be a great idea, but as the start-ups and the teams expand, things get more difficult.
Since spreadsheets effectively have a single-user architecture but still have multi-user choices, mayhem happens when multiple editors access the same sheet. As a result, access control becomes more difficult, resulting in data overwrites and mistakes.
4. A universe of integrations is being ignored by you.
Since Excel allows users to develop financial models without having to learn how to code, the bulk of users continue to rely on it.
Companies now seek an integrated financial planning platform that is transparent, easy to understand, and can be developed utilising natural language skills.
5. You need deeper understanding.
In order for businesses to be more adaptable and responsive to changing needs, internal processes must be quick and flexible.
Managers rely on the finance teams to provide greater insights that help them make critical decisions for the company’s future. Gaining the confidence of the company’s managers requires that you deliver great insights.
Manually reviewing, updating, and amending the data prior to that crucial presentation is a time-consuming and laborious procedure. Companies must set up time to look for spreadsheet alternatives that provide workflow integration.
With an integrated platform such as Sage’s Intacct, you can monitor everyday operations, give multi-dimensional insights for executive decision-making, and handle data securely.
Pigment’s Google Sheets Connector, which makes it simple to transfer data from your Google Sheets into your financial models and then back into your presentations, may hold the key to an answer but is not as good as a dedicated accounting platform.
Finally, Finance teams need to take action to ensure that the leadership receives accurate, timely, and clean data for assured decision-making.
6. Spreadsheet access rights are insecure.
Let’s face it: using a spreadsheet with multiple authors and users may be a really perplexing task.
Whether it involves confidential corporate information or something as simple (but essential) as a daily spending report, data security must always be guaranteed. Our systems’ SOC2 level and ISO27001 data security guarantees your data is secure at an enterprise level.
Please get in touch with us if you’re interested in learning more about Sage Intacct or any of our other software solutions from Itas Solutions.
We are a Sage multi-award-winning partner here at Itas. We began in 1995 with just one client and currently provide service to over 200 clients around the country. They are aware that we are always willing to lend a hand when necessary. Itas, a company trusted by our clients for more than 20 years, has grown through customer and IT professional recommendations who adore the knowledgeable yet individualised service we provide.
Who we are.
Itas is a multi-award-winning Sage partner. Having started in 1995 with just one customer, we now support over 200 clients nationwide. They know we are always there to provide a helping hand, whenever they need us. Trusted by our customers for over 20 years, Itas has been built on referrals from customers and IT professionals that love the expert yet personal service that we offer.
If you would like a discussion on how Sage Intacct can help you move away from spreadsheets, please contact us via email at [email protected].