{"id":72967,"date":"2023-09-13T17:19:17","date_gmt":"2023-09-13T09:19:17","guid":{"rendered":"https:\/\/psglobalconsulting.com\/blog\/the-rise-and-fall-of-spreadsheets"},"modified":"2024-12-31T16:38:02","modified_gmt":"2024-12-31T08:38:02","slug":"the-rise-and-fall-of-spreadsheets","status":"publish","type":"post","link":"https:\/\/psglobalconsulting.com\/my\/blog\/the-rise-and-fall-of-spreadsheets","title":{"rendered":"The Rise and Fall of Spreadsheets"},"content":{"rendered":"\n

The spreadsheet as we know it today was invented in 1978 and gained popularity through Microsoft\u2019s Excel software. Spreadsheets helped finance and account professionals collect and organise data. It helped them do the math; all they had to do was key in the formulas.<\/p>\n\n\n\n

However, in recent years, the spreadsheet has been a subject of ridicule due to its inability to manage increasingly complex data sets in the digital business world. Spreadsheets have also become a byword for mistakes as they require copious amounts of time being manually managed by humans.<\/p>\n\n\n\n

MarketWatch has gone as far as attributing spreadsheets to the \u201cproliferation of bad math<\/a>\u201d, while a Fellow at the Adam Smith Institute in London has labelled it \u201cthe most dangerous software on the planet\u201d<\/a>.<\/p>\n\n\n\n

Yet, amidst all these, the spreadsheet remains a mainstay in most businesses. Even as transaction volumes multiply daily and spreadsheets get increasingly erratic, companies\u2019 loyalty towards them shows no signs of abating.<\/p>\n\n\n\n

In this article we examine the problems businesses face if they continue to persist with spreadsheets, and how modern-day cloud accounting solutions like BlackLine can help businesses with end-to-end automation of their finance and accounting processes.<\/p>\n\n\n\n

Pain Points of using Excel: The Pros and Cons<\/h2>\n\n\n\n

Since the introduction of the Microsoft Excel spreadsheet in 1985, there has been unparalleled growth in the solution\u2019s popularity. With millions of users worldwide, one might assume that Excel\u2019s enduring presence in accounting departments signifies its inherent usefulness. However, this assumption doesn\u2019t mean it holds true.<\/p>\n\n\n\n

It is undeniable that spreadsheets like Excel have impressive computational capabilities and serve as a tool for performing and displaying the results of complex calculations. The fundamental issue is that spreadsheets were originally created as visible calculators, not databases. Nevertheless, spreadsheets have been acting as an ad hoc database for data storage and retrieval for many organisations in many industries.<\/p>\n\n\n\n

The shortcomings of spreadsheets become evident in the gap between appearance and reality. Its inherent limitations, obscured formulas, and distinct cells continuously jeopardise data integrity. Shockingly, a 2008 University of Hawaii study found that 88% of scrutinised spreadsheets contained errors, with a later study reporting 63% inaccuracies<\/a>. What compounds the issue is the unwavering confidence of highly experienced users, underscoring the spreadsheet\u2019s concealed pitfalls.<\/p>\n\n\n\n

Here are some examples of mistakes caused by errors in spreadsheets:<\/p>\n\n\n\n

Theft:<\/h3>\n\n\n\n

A cashier at Clallam County took money from the treasurer’s office, disguised in hidden rows in her spreadsheet. The employee was estimated to be involved in over US$793,595<\/a> in \u201cquestionable transactions\u201d over the years.<\/p>\n\n\n\n

Underestimation of Tax:<\/h3>\n\n\n\n

A seasoned employee’s utilisation of an incorrect spreadsheet resulted in Kern County’s failure to account for taxable property valued at US$1.26 billion<\/a>. This mistake entailed an erroneous calculation of a tax bill.<\/p>\n\n\n\n

Errors in the calculation:<\/h3>\n\n\n\n

In 2011, Knox County Trustee Office auditors discovered a US$6 Million-dollar accounting mistake<\/a> due to an account that was not correctly linked into an Excel spreadsheet.<\/p>\n\n\n\n

Fines: <\/h3>\n\n\n\n

Arizona Portland Cement Corporation was fined US$350,000 by the Environmental Protection Agency only to find out that there was never a physical violation and the entire thing was sparked by a maths error<\/a>.<\/p>\n\n\n\n

Budget:<\/h3>\n\n\n\n

A mistake in a debt service line item led to a perceived budget shortfall for the town of Framingham. A staff attributed the mistake to having to used \u201cmonstrous spreadsheets\u201d, resulting in the town thinking it had US$1.5 million more in budget<\/a>, and eventually having to use US$600,000 in unexpected state aid to compensate for the shortfall. <\/p>\n\n\n\n

Why Choose BlackLine<\/h2>\n\n\n\n

Replacing Excel spreadsheets with a finance control and automation platform<\/a> like BlackLine will help organisations reduce manual work and enable accountants to complete tasks that take hours or days within minutes. This shift will not only help organisations save time but also help reduce errors, enhance standardisation, boost visibility, enforce stronger controls and also streamline audits.<\/p>\n\n\n\n

Final Thoughts<\/h2>\n\n\n\n

Finance automation is a transformative solution that provides executives with the transparency and visibility essential for making informed and strategic business decisions. By ensuring accuracy and reducing the margin for error, it effectively mitigates risks associated with financial operations. This technology not only optimises financial processes but also liberates accountants from time-consuming manual tasks, allowing them to redirect their efforts towards strategy development and in-depth analysis.<\/p>\n\n\n\n

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