More than 90% of spreadsheets contain serious errors, while more than 90% of spreadsheet users are convinced that their models are error-free. As the spreadsheet is the favourite software tool of a great many accountants, this could be a recipe for disaster; but it doesn’t need to be, because specialist software tools can be used to control spreadsheet use and minimise the potential for error.
Whether you are using spreadsheets for cash flow planning or stock control, they can be difficult to manage manually. A workbook saved in a folder tagged ‘Sales forecast – March.xls’ may be all you need when it is created and the only person referencing it is the originator, but its purpose can easily become lost or obscured. As time passes, data and formula can change and the spreadsheet can become meaningless or misleading.
Manual control becomes even more challenging when spreadsheets are part of an iterative process or an enterprise-wide collaborative task such as budgeting or human resource allocation. The accountant’s favourite software application lacks the built-in fail-safes of more ‘evolved’ applications, so the manual consolidation of data from dozens, hundreds, or even thousands of xls files is not just time-consuming and complex, it’s also inherently error prone.
Fortunately, by putting a wrapper around spreadsheet-based business processes, specialist control tools can be used to retain the flexibility of the spreadsheet while offering the sort of centralised control infrastructure associated with an IT department.
Suppliers from Acuity to Lyquidity can provide automated capabilities for version control, security, data integrity, change management, and a collaborative review-and-approval process. As well as ensuring that spreadsheets are properly controlled, accessed and manipulated, some specialist software can detect accounting errors, generate reports, and root out possible frauds by identifying suspicious patterns; and these applications often boast features such as workflow management, software development tools, archiving, and analytical reporting. All of which can help make spreadsheet-based processes more efficient and less error-prone, and support compliance with legislation such as Basel II and Sarbanes–Oxley.