Spreadsheets are a ubiquitous business tool and key feature of every finance department. But what if these documents actually impede workflows, reduce efficiency and damage productivity?
Extensive research suggests spreadsheets offer few of the advantages users expect. In practice, they create risks and liabilities that should be unacceptable in any finance department. If your enterprise uses spreadsheets to any extent, be aware of their inherent limitations and weaknesses:
- Data Errors – More than a third of spreadsheets contain at least one error. These errors could be benign or have six-figure consequences. When up to 35 percent of spreadsheets are inaccurate, it’s reasonable to expect the worst possible consequences.
- Regulatory Issues – New regulations going into effect in 2018 will create exacting standards for revenue recognition. The complexity of these rules even exceeds the most extensive spreadsheet collection’s capabilities. Errors and omissions only will accelerate, and the threat of noncompliance looms large.
- Comprehension Gaps – Spreadsheets often grow so unwieldy that only one or two people really know their meaning and functionality. That broad lack of understanding can lead to a crisis when the original creator leaves the company.
- Morale Problems – Managing spreadsheets is a time- and labor-intensive process. This is especially true when skilled, highly educated professionals have to spend a large part of their day on rote data administration.
- Client Uncertainties – Keeping clients satisfied requires timely, transparent, detailed and accurate invoicing. When this process relies on spreadsheets, it’s almost impossible to consistently and reliably deliver on client expectations.
- Lost Opportunities – All the resources spent managing, monitoring, correcting and translating spreadsheets could be better spent on other pursuits like analytics. Companies compromise their strength and agility by focusing their most valuable talents and assets on spreadsheet management.
It’s time to stop thinking of spreadsheets as a minor annoyance or necessary evil. They’re a deeper and more widespread problem than most enterprises realize. And thanks to the capabilities of modern enterprise resource planning for finance, they’re almost entirely unnecessary in today’s office.
To learn more about how you can gain better and more efficient insight into your reporting processes, contact Jeff or your trusted BKD advisor.