The Debate About Excel
Originally published January 2, 2018 on AccountingToday.com.
By Stuart Miller, CFO, Workiva (NYSE:WK)
Debate has raged about the efficacy of Excel since Microsoft launched it in 1985.
The Wall Street Journal ignited a firestorm of discussion with its November 29 article that questioned whether Excel has adapted to the demands of modern-day finance and accounting.
As CFO of a NYSE-listed company, I am personally liable for the numbers we report, so I understand the anxieties at the center of this debate.
Excel loyalists are passionate and steadfast. Others are quick to embrace newer software technology for better collaboration in a single version, with improved data accuracy and transparency.
Large enterprises often employ hundreds of people to manage and maintain rolling versions of documents, including Excel spreadsheets. Disconnected, ad hoc spreadsheets contain numbers of uncertain provenance, yet they drive the substance of presentations to boards and investors. So it’s not surprising that a recent survey of nearly 1,000 CFOs and senior finance professionals by FSN, a U.K.-based news and research organization, found that 40 percent of boardrooms do not have a complete view of their business.
Despite the fact that new, purpose-built software is available, the FSN survey revealed that many companies still compile, report and analyze their ever-expanding volume of business data with legacy processes and disconnected technologies that are often manual, repetitive and error-prone.
The FSN survey findings were consistent with what we see in the industry:
According to the survey, 71 percent of organizations depend on spreadsheets for collecting data across the majority of their business units even though there are better ways to manage their data. Part of the problem lies in the inability of some ERP and CPM legacy systems to change as the business changes. In addition, many accounting and finance teams rely heavily on their IT departments for system changes. Asking IT to script a new report is an unacceptable delay for time-sensitive analysis, particularly when younger analysts want to do it themselves.
The survey reported that only 29 percent of senior finance executives think they can change their system without causing major delays in their reports. It’s no surprise that 69 percent of survey respondents resort to getting by with what FSN calls a “spiral of spreadsheets.”
Excel has its place, but it doesn’t meet all of the needs of modern finance and accounting teams. Relying only on traditional spreadsheets can make it harder for companies to be accountable and agile to remain competitive. In addition, lack of control over critical business data can create the type of chaos that no company can afford.
Financial leaders who still rely heavily on traditional spreadsheets and other non-collaborative tools will continue to suffer from the concerns highlighted by the FSN survey. While adopting new software can be uncomfortable, more and more companies are finding the transition to cloud technology to be seamless and the benefits enormous for improving accuracy and accountability, which ultimately decreases anxiety and risk.
For the latest information and news, visit The Workiva Newsroom.