“Get rid of spreadsheets,” said no finance manager ever. But, “Can this information be dispensed another way?” is a question that crosses every finance manager’s mind at some point in their day.
The reasons for spreadsheet confusion are almost as vast as the number of finance managers in the top 100 companies in the United States. They range from unreliability to impeding planning, to difficulty managing, to financial loss.
An analysis of nearly 10,000 spreadsheets from Enron’s failed existence found 24% of them contained errors.
Aside from that, in 2015, 1 in 5 large businesses across the UK suffered financial losses due to very poor spreadsheets.
Yet, 70% of companies still use spreadsheets to manage data, plan processes, and make long-term decisions while 48% claim that those same spreadsheets that contain so much data are extremely difficult to manage.
In short, spreadsheets create many challenges and can be the source of major financial disaster. To that end, finance managers say these 7 reasons are why they hate spreadsheets:
#1 Templates get ignored.
Process is planned but when templates get sent across to multiple budget-holders for completion, the rules are not followed.
#2 Formula errors are rife.
Figures may look accurate on the surface but a little digging can uncover formulae that’s incorrect, not copied correctly, or inaccurate calculations.
#3 Spreadsheets that only make sense to the owner.
Spreadsheet customization works in most cases only for the person who does the customization, leaving everyone else to try to understand what was meant.
#4 Poor document management.
Editing, renaming, saving, and deleting are easy when it comes to spreadsheets but when multiple people are doing the same thing to the same document, it can be the source of confusion.
#5 Key person dependency.
When only one person knows how the spreadsheet works, everyone else is at a loss when that person is out of the office, on vacation, or on sick leave,
#6 Budget-holder resistance.
Budget-holders don’t always care for the planning and forecasting process leading them to submit late or low-quality information.
#7 Finance gets the blame.
Of course, since business hinges largely on the flow of money, errors and delays typically get blamed on the people in finance.
Spreadsheets are popular, challenging, and difficult but try editing them out of your business and you may see nothing short of a protest.