Spreadsheets are something that we all either love or despise.
The best tool for quick calculation and usability is a spreadsheet. The problem may lie in the fact that the solution is too simple to implement as a whole.
With only one incorrect formula, your data could suddenly turn sour without you knowing it!
Due to minor errors made on spreadsheets, businesses have lost millions of pounds. Due to a spreadsheet blunder, JP Morgan Chase lost $6 billion in trading during the London Whale debacle, and Barclays incorrectly purchased 179 contracts when purchasing Lehman Brothers’ assets because the cells were hidden rather than deleted.
Spreadsheets make it simple to swiftly compile data, evaluate it, and solicit feedback from working team members.
Where does it get complicated? Companies grow, sheets get bigger and more complicated, and all of a sudden, accuracy is in doubt.
It’s crucial to understand that bankers’ over-reliance on their Excel spreadsheets and the data they contained may be responsible for several aspects of the 2008 financial meltdown.
Overall, there comes a time when finance teams need to stop utilising spreadsheets. For reliable financial modelling, you should look into alternatives to spreadsheets for the following seven reasons:
Financial models are broken as a result of spreadsheets
Due to the application’s relative simplicity, many users create their financial models in spreadsheets.
To link and duplicate sheets and values, you can use various functions and formulas. Additionally, you can automate some tasks with macros. Financial models fail as data builds up and the spreadsheet becomes sophisticated for the following reasons:
§ Incorrectly implemented operations
§ Human error and negligence
§ Inability to translate and handle large amounts of data
§ There aren’t enough multidimensional data models
§ Old and isolated data
Spreadsheets typically work when conceptual planning is being done, like when creating your budget. But the “flat” data model is woefully inadequate once you start taking into account cross-functional data aspects like cash flow and personnel projections.
Finance teams regularly analyse data and implement data checks to proactively prevent errors in order to overcome the challenges brought on by the simple spreadsheet’s lack of flexibility.
It is challenging, if not impossible, to construct a system of checks on top of existing financial models. Additionally, because of this approach, spreadsheets are frequently risky and untrustworthy.
An integrated and intelligent business platform gives you the ability to consolidate enormous volumes of multidimensional data in real-time to make sure that this doesn’t happen.
Spreadsheets were not designed to create accurate, timely, and scalable financial models, which is the ultimate goal.
Spreadsheets Cannot Grow with Your Team
When the amount of data is limited and the spreadsheet is largely controlled by a single author, spreadsheets are frequently the best option. As more team members begin to contribute to the data collection, the amount of data that is recorded on the spreadsheet grows over time.
Spreadsheets have size restrictions and are unable to provide the flexibility and granularity needed for corporate data. Managers frequently find that this makes it difficult for them to make quick choices.
Due to the fact that spreadsheets cannot manage reporting the data must be manually inserted into cells on several spreadsheets and verified before processing.
It’s important to keep in mind that growing businesses obtain their data from a variety of sources, including departments and even outside providers. When all of your dispersed data is processed, stored, and modelled in spreadsheets, consolidation and alignment soon becomes a versioning nightmare.
Maintaining reliable, real-time data is challenging
Over 90% of users believe their spreadsheets are error-free, even though more than 90% of spreadsheets contain major problems.
You can keep checking sheets, finding and fixing mistakes, and fixing the macros. The fact that manual monitoring and fine-tuning of your models is taxing does not change as a result. Even if all potential problems are resolved, it might not be possible to tell with enormous amounts of data.
Imagine going through this process each time management asks your team for advice.
Spreadsheets may be a wonderful concept for novices or start-ups with small teams, but as the start-ups grow and the teams get larger, things become more challenging.
When many editors access the same sheet, chaos results since spreadsheets effectively have a single-user architecture yet nonetheless have multi-user options. Access control becomes more complicated as a result, leading to data overwrites and errors.
You are ignoring a world of integrations
The majority of users still rely on Excel since it enables them to create financial models without having to learn how to code.
Companies today want an integrated financial planning platform that can be created using natural language competence and is transparent and simple to grasp.
You need deeper insights
Internal systems must be flexible and quick for firms to become more agile and responsive to changing needs.
Managers look to the finance teams for deeper insights that inform crucial choices for the future of the business. Delivering excellent insights with confidence is crucial for gaining you’re the trust of the managers of the company.
Before that important presentation, manually examining, updating, and editing the data is a labor-intensive and time-consuming process. Companies need to schedule a time period for searching for spreadsheet substitutes that will enable workflow integration.
An integrated platform will enable you to securely handle data as well as monitor daily operations and present multidimensional insights for decision-making by executives.
A possible answer can be found in Pigment’s Google Sheets Connector, which makes it simple to move data from your Google Sheets into your financial models and then back into your presentations.
In the end, Finance teams must take steps to guarantee that leadership receives accurate, timely, and clean data for confident decision-making.
Insecure access rights exist for spreadsheets
Let’s face it: spreadsheet may be a highly confusing process when a spreadsheet has several authors and users.
Data security must be ensured at all times, whether it pertains to private corporate information or something as basic (but crucial) as a daily expense report. Our solutions ensures that your data is secure at an enterprise level thanks to a SOC2 level and ISO27001 data security.
If you would like a discussion on how Itas Solutions Sage Intacct or our other software solutions please contact us.
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.