Excel Is Your Enemy
You accounting department has two goals when delivering information to you: it must be insightful and/or it must help you make a good decision. Everything else is noise and is a distraction to your running your company.
Like every client I have, you are probably tracking a lot of financial and operational data in excel. Cash flow forecasts, job costing information, sales tracking, labor hours and on and on.
I have a client that was tracking cost allocations in excel. The workbook was very poorly created which means there was a lot of data entry and formulas had to be changed every month. The result was allocations for the last 5 years were wrong. The company leadership was making decisions on bad data – which translates to bad decisions.
In 2008, University of Hawaii professor Raymond Panko published a report based on field audits that had been performed. The bottom line – 88% of the excel spreadsheets had errors. Why does this happen? Mostly it is the design of excel. It is very easy to build a spreadsheet. Most people doing this work are self-taught and do not get to a proficiency level that eliminates the errors.
What should you do?
Someone in your organization needs highly developed excel skills. They need to know advanced functions and they need to understand excel best practices.
When hiring someone in your accounting department, have them take an excel proficiency test. Everyone says they are good in excel. Very few people really are. Google “excel proficiency tests” and find a test that seems reasonable.
Make advanced excel training a part of your accounting staff’s job description. The labor hours saved in data entry and the good decisions you will make as a result of good data will more than cover the cost of the training.
Talk to your IT department. Have them connect the company’s primary software data to excel. This is safe and all but eliminates data entry. It also keeps excel reports close to real time.
If you have a good IT department, look at some of the new data visualization tools like Tableau.
Call me if you would like help fixing your excel world.