Are you still creating financial statements in Excel?  Well, you’re not alone.  While Excel is one of the most utilized spreadsheet application in the business world it is being used for tasks it was not originally designed for.  

Excel’s greatest strength is it’s simplicity in creating and editing spreadsheets.  However this is also its biggest drawback.  In the current age of stringent audits and guidelines where a CFO, Accountant, and even a Bookkeeper are required to certify that final financials are accurate, using Excel can become risky if one assumes that the Excel numbers have not been changed, formulas not altered, or that linked spreadsheets are providing correct information.

In a recent survey on Data-management.com over half of the respondents say they spend a great deal of time correcting spreadsheet errors.  There was a strong belief among the participants that fixing inaccurate spreadsheets was part of their job duties.

"So many companies, right up to the Fortune 500, do their final analysis and consolidation in Excel spreadsheets," says Tony Munns, the member of Brown Smith Wallace, who runs the risk management practice for the St. Louis-based firm.  "Anyone can deliberately or accidentally change a field and it won't necessarily be found."   In a recent telephone survey to companies undergoing an audit, merely one half of the participants had replied that the auditors are expressing a negative response when told that the company’s financials were done using a spreadsheet. 

One of the focuses of the Sarbanes Oxley Act (SOX) was to have organizations create effective external controls.  One way to reach this goal is by eliminating poorly designed and uncontrolled spreadsheets.   As one auditor had stated, A push button Financial Statement is more reliable than a manual Excel spreadsheet.

Consider the following scenarios and compare them to your situation.

For example let’s suppose that an organization is using a series of linking spreadsheets to create financial output.  The worksheet designer has since left the organization and when problems arise temporary patches are put into place that addresses the issue in the short-term. Eventually the system will need to be redesigned and additional safeguards put into place.   

Another factor is human error in both design and implementation. When timing is a critical factor numbers that appear accurate may be taken at face value and not checked for discrepancies. This can lead to disastrous results. 

Incorrect information is also part of the equation.   An Excel spreadsheet can only process the data that it is given and provide output based on that information.  The mantra “Garbage In, Garbage Out” continues to ring true.  

ACC Accounting Solutions offers a variety of solutions that are cost effective and will improve the efficiency of your accounting staff.  ACC’s solutions included a series of steps to mitigate the risk associated with publishing financial report.  The programs are designed to review the existing spreadsheets that are currently used today, work with the specific staff members that have training needs, and then by using either a hand holding or a review process approach depending on the staff’s skill sets.  Most projects are a combination of a few days on site and a few days online.   

Using Microsoft FRx software we have assisted companies in being less dependent on Excel and becoming more efficient in creating and distributing accurate financial reports for their organization.  Please share your thoughts Info@4acc.com

- Fred Schlossman