When Excel spreadsheets launched in 1985, the software represented a new era in number-crunching. Accountants, investors, analysts, scientists–anyone who slaved over hand calculations–now entered the data and let the formulas go to work. Alas, nothing great lasts forever. The working world has entered a new era of data, and sadly, Excel isn’t equipped to manage modern demands.
ERR! Or, Excel isn’t error-proof
Accounting is increasingly complicated. No one wants to deliver inaccurate data. Excel spreadsheets aren’t error-proof, especially with manually-entered data. Nor is computer-generated data that businesses download and upload is exempt from mistakes. Merging multiple spreadsheets into one can throw off automated formulas, data tags, and more. The probability of error increases when adding spreadsheets that link to data on other spreadsheets. In short, the greater the quantity of data or the more complex the data, the larger the risk for serious errors that could cost companies big bucks.
Is your Excel right?
Excel works great, if you have the manpower and financial capacity to have someone constantly double- and-triple checking the data for accuracy. The reality is most small-to-mid-sized business don’t have the financial resources to hire an in-house data or financial auditor. Outsourcing auditing may be less costly, but it’s still expensive and unnecessary with today’s financial tools that can verify real-time data.
And the best Excel collaboration goes to…
Ever try collaborating on an Excel spreadsheet? It’s impossible to have two people operating on the spreadsheet at the same time. That leaves one person making the changes while the second twiddles their thumbs, waiting. Next thing you know, there’s six versions of the same document and the team is left wondering which one is the right copy. Typically the spreadsheet is created by a manager that controls the access. What happens when that individual moves on? The single-gatekeeper practice doesn’t fit well in most business models.
Dude, where’s my data?
Depending on how a company sets up their document system, locating the correct Excel file could be a bear. Once you do open the right spreadsheet, finding the information you want isn’t always easy at first glance. Users are stuck shifting through multiple tabs, trying to understand the labels, and deciding whether to sort or filter data. The financial world craves efficiency, and Excel isn’t it.
Real models wanted
The modern world wants more complex financial modeling. While Excel can run models and provide projections, there are more market variables today. People want to know right in that moment how the current market rate impacts their shares, their REITs, or their DST 1031s. It’s hard for an Excel-based system to keep pace with real-time demands.
Excel made a lasting impact on the financial world. It wasn’t too long ago that we were in the stone age of calculators and hand-plotted graphs. Now accounting and data analysis has moved beyond what Excel can do, leaving us ready to bid this once innovative office tool a fond adieu.