Are you prepared for more growth and profitability? Part 4

Let’s continue our discussion on conversations to have with your Controller. This week we will take a peek at your use of Excel.

Q4 – Are we still using Excel and if so, Why?

No, don’t panic I’m not going to say there is no use for Excel but I do think there is cause for concern if it’s relied upon too much and for the wrong reasons. I don’t think Excel will ever go away completely nor do I think it should. My concern is with the reliance on Excel as the backbone of your accounting system. Excel should be viewed more as just one tool in your toolbox. Some concerns regarding the over-reliance stem from its breakability, security issues, and it’s lack of shareability.

With that being said there are definitely good uses for Excel which we will look at now.

It’s great for isolated tasks. 

Preparing prepaid schedules, deferred revenue calculations, supporting schedules and Balance Sheet Reconciliation reports are great tasks to use Excel for. What you need to keep in mind is that the basis for these activities needs to be data coming from your primary accounting system.

Excel as an ad hoc reporting tool. 

Outside analysis and modeling are another great use for Excel. Just keep in mind when using this data that the true reality of your business needs to be in your financial system and not in these ad hoc reports.

Used for ancillary reporting. 

Your financials should always come from your accounting system however some reporting using Excel is acceptable. Flash reports, reconciliation reports and forward-looking reports such as forecasts are acceptable uses for Excel.

If you are relying on Excel for much of your day to day reporting it may be time to ask the question, Why? And is there another way? Sometimes we are just afraid of change. Sometimes we can’t get past the cost of upgrading the reporting our systems have, we don’t see the return. Fear of change or paying for set up costs may result in loss of integrity of your data. So my question to you is, What will it cost you if your data becomes unreliable?

Key Takeaway: Excel can be a valuable tool if it’s used for these specific and limited purposes.

Next week is our last and final question for this series. We will dive into the idea of integrating financial data with operating metrics and how this has changed the role of the Controller given the more robust financial systems available to