Should accountants be moving away from using spreadsheets?

September 1st 2022 | Posted by Phil Scott

Excel spreadsheets have long been a traditional tool used by accountants for financial reporting and business planning purposes.

This means that accounting professionals are familiar with using spreadsheets and find them a simple tool work with.

So, does this mean that spreadsheets are the most effective solution in accounting firms right now and as we move forward into the future? The truth is that spreadsheets are always likely to be used in accounting when analysing data, making calculations, and presenting data to a tight timeframe. However, they have limitations and adopting the use of software is advantageous for firms.

The limitations of spreadsheets

One of the biggest limitations of spreadsheets is that they are not fallible. It’s easy for mistakes, or malicious activities, to result in the distortion of data. This can lead to countless hours of costly activity as accounting professionals attempt to uncover and correct discrepancies.

Spreadsheets also do not normally include real-time data. This means they are only as current as the last time data was downloaded and input. In the current competitive environment this is not an ideal situation for accounting firms to be in as it makes it more difficult to react to potential risks or opportunities.

Finally, it’s difficult to track the data that is contained in spreadsheets. There is a lack of visibility concerning who amends data and is responsible for any errors. This can be damaging from a security point of view.

Given the limitations of spreadsheets, it’s easy to understand why forward-thinking accounting firms are introducing software that provides alternative solutions.

The benefits of moving away from spreadsheets

When it comes to holding and managing large quantities of data, moving to a database system such as an ERP system, affords better protection. It also enables accounting professionals to produce analysis that provides insightful and current business intelligence.

This includes the ability of accounting professionals to provide financial scenarios and plans based on real-time information. Moving to this type of agile accounting software makes it easier to provide clients with insights based on data that is accurate to the current time.

Adopting changes in a planned manner

It’s likely that there will always be a place for spreadsheets in accounting firms in certain situations. However, it’s clear that moving to more smart systems makes sense when creating accurate real-time scenarios and plans. Taking this route also makes sense from the position of reducing error and preventing fraud.

So, many top accounting firms are making the move away from spreadsheets in some areas. They are doing so in a planned manner in order to protect the continuity of their service. This includes managing any reluctance to change displayed by professionals who are used to employing their spreadsheet expertise.

Therefore, the change to new software solutions has to be managed like any significant change management process. This includes achieving the buy-in of stakeholders, planning every step of the process, and establishing a process to measure the success of the implementation.

Completing the change process in this planned and steady manner enables the firm to ensure the success of the implementation.

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