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How should Excel be used in your business?

Last autumn Excel celebrated its 30th year in existence, giving us the ideal opportunity to reflect on what the program has done for businesses and also evaluate its functionaExcel 1lity in today’s technological world.

It is hard to see how businesses could survive without excel, however it is also easy to see that some businesses struggle to survive while using excel.

The benefits of Excel

Excel has given staff, at all levels of business, the tools and opportunity to complete seemingly impossible processes with ease. As a result of this, Excel has dominated the market and is why businesses day-to-day activities are dominated by it.

Excel is liked by so many businesses due to the fact it is one of few tools which can both process data and present the information it has generated. However, a problem which occurs by using excel in this way is that too much emphasis is put on the presentation side, rather than the process. This could be down to the nature of how information regarding business change (especially financial) needs to be reactive to the situation and therefore is often processed quickly.

Another key benefit of Excel is its ability to provide ownership to its users. Whether it’s an issue or a challenge, excel provides the user the ability to process and present the information in a personalised way.

The limitations of Excel

In finance, spreadsheets will always play an integral role, but problems do occur and the processes used do not always work as well as expected. The best way to use a spreadsheet is either as a tactical tool, or as a template for a more formal process. Excel is designed in such a way that it is very easy to create a templet; however issues arise if it is over relied upon.  

YouGov carried out a recent poll, discovering that 72% of medium and large businesses use spreadsheets for budgeting and/or forecasting, yet 17% of large businesses have financial losses directly linked to poor spreadsheets.

We believe that the problem is derived from relying too heavily on Excel to carry out important tasks, without considering its limitations. Only 41% of companies in the YouGov survey had invested in training staff in Excel in the past 6 months.

Spreadsheets do not contain control features, such as version control or tractability. This means that it is extremely easy to incorrectly input data into a workbook and for false information to be generated.

Another limitation which businesses should be aware of is that the way in which a person or team may control a spreadsheet, may be extremely varied, due to the flexibility of Excel, . This lack of control between the ways which different users use the workbooks presents a problem and is another reason why errors are found.

Using Excel going forward

It is clear how important Excel has been in the business world over the last thirty years. However, with the resent industry reports bringing to attention the potential for error with spreadsheets, we should all be considering how to eradicate the potential for error and the subsequent issues they could bring.

New technological advances have brought more consistent programs to the financial market, which do include built in back-ups and compliance support. With these new programs, businesses should look at ways in which to use both Excel and the new software to reduce the risk of errors which using Excel alone ultimately brings.

One way in which Excel is useful or when it comes to new financial programs is importing and exporting data. When importing data into new software, such as Xero, you get the benefits of both pieces of software. For example, using excel to comprise a list of data which you import into Xero means that you still get the ease of use benefits of Excel, while getting the controlled benefits of Xero, resulting in a reduce in risk.

If you would like more information about the new programs which benefit from controls, vastly reducing your businesses risk for error, please contact us using the details below.

For more information about Xero and the cloud, please click here.

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Posted in: Blog, Cloud Accounting, Innovation, SME Business, Uncategorized