Ah, the dreaded spreadsheet. The legacy technology is pinpointed by many treasury and accounting experts as an outdated, inefficient way of managing corporate finances, yet research consistently reveals widespread use of the tedious, manual data-input tool.
Only weeks ago, research from corporate accounting service provider Exact revealed that more than one-fifth of small business accountants continue to use spreadsheets themselves to manage their own finances. Just yesterday, procurement technology firm Zycus unleashed its own findings that the spreadsheet is alive and well among chief procurement officers that need to manage spending.
A new whitepaper by bobsguide exploring the rise of treasury management systems (TMS) took a direct look into whether the spreadsheet will ever go away in business accounting.
“Although technology is progressing at a fast pace, some corporate treasurers are still using Excel spreadsheets,” the bobsguide report said. Under this premise, the paper analyzes whether the spreadsheet can survive today’s era of Big Data, especially in the context of the so-called "fat finger" data entry mistake. The spreadsheet, analysts said, is notoriously prone to human error, as a simple slip of the finger on the keyboard can lead to mistakes in financial reports. But as businesses continue to embrace Big Data, will the spreadsheet still be a viable option to store, sort and analyze all of this information?
Why Spreadsheets Endure
According to his report for bobsguide, industry expert Neil Ainger said convenience and affordability are two key reasons why businesses continue to return to the spreadsheet time and time again.
In an interview for the report, Nicholas Franck, who serves as group treasury projects and products director for cosmetics firm Oriflame, said he still uses spreadsheets to create tables and graphics to analyze financial data and to input data from an array of sources into a single document.
“These requirements are too small to put significant investment in a more robust data integration tool, in terms of money and staff time,” he said. “Spreadsheets are therefore ideal.”
Franck added that even though his corporation uses a treasury management system, the spreadsheet is still necessary, especially for reporting, budgeting and forecasting.
Other executives agree. Corporate treasury service provider Bellin’s managing director, Martin Bellin, for example, told Ainger that “finance without Excel is unthinkable.” Similarly, corporate FinServ firm SunGard AvantGard’s senior vice president of treasury solutions, Paul Bramwell, said, “It is very unlikely that Excel will ever fall out of usage.”
“Even when TMSs are put in place, rendering complex calculation spreadsheets unnecessary, it still provides a flexible reporting and slice-and-dice analysis tool,” he added.
"If You Can’t Beat Them, Join Them"
So what is a treasury management system developer to do once they have accepted that the Excel spreadsheet is here to stay? According to Ainger’s report, the realization has led many TMS companies to try to work with the spreadsheet, not against it. “After all,” Ainger wrote, “if you can’t beat them, join them.”
However, he added, this must be done in a strategic way, considering that spreadsheets — while popular — are still incredibly prone to errors.
“Technology firms across the sector have largely given up trying to get treasurers to scrap Excel and instead now incorporate it into their solutions as a calculating engine or such like,” said Aite Group Senior Analyst Enrico Camerinelli. “It’s a useful tool, particularly for an older professional that may already have many complicated models on the platform.”
But, Camerinelli added, “it should only ever be an add-on tool in a controlled environment.”
At present, a seamless integration with spreadsheets is not necessarily the norm for today’s TMSs. Franck at Oriflame, for example, reported that his treasury management system only integrates with an older version of Excel files, making it difficult to switch between the two.
Plus, experts interviewed by Ainger largely agreed that just because the spreadsheet remains in the corporate treasury department doesn’t mean companies are choosing one over the other. Bellin, for example, said spreadsheets are to treasury as physical books are to bookkeeping — outdated and inefficient. Further, he added, more stringent regulations on financial reporting mean spreadsheets can no longer meet the demand for accuracy and data tracking.
“Excel never helps to improve processes, security, compliance and communication,” Bellin said, “so it should only be used in parallel.”
According to Ainger’s report in bobsguide, the spreadsheet is probably here to stay. Luckily, developers and innovators are beginning to create solutions for business treasurers and accountants that allow them to gain the accuracy of Big Data analytics and storage while still offering the familiarity of the spreadsheet — suggesting treasury can have its cake and eat it, too.
[bctt tweet="The spreadsheet is probably here to stay"]
“You don’t need to see the disappearance of Excel to prove innovation,” Aite Group’s Camerinelli said. “It’s not an either/or situation.”