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10 spreadsheets you shouldn’t have in your finance teams

In Process Improvement by Tamara

Reading Time: 9 minutes

We’re all guilty of it. In fact, it doesn’t matter what department you work in, we all just love creating spreadsheets! We are going to be picking on finance teams today though. Particularly because over-reliance on spreadsheets in finance teams can lead to loss of data and data inaccuracy which in turn leads to making decisions on poor/incorrect data and spending copious amounts of time maintaining those spreadsheets.

Why do we use spreadsheets?

Firstly, tools like Excel, Google Sheets etc are very familiar to us. We’ve probably grown up using them, we know how to use them and it’s a bit of a safety blanket. One of the main reasons finance teams love spreadsheets is because they can be very powerful. They allow us to create complex formulas, detailed reports and automate a lot of the otherwise tedious calculations. However, the more complex we make them, the more fragile they become. If you’ve ever had someone press ‘delete’ on one cell of a complex report, I understand the pain you felt.

It can seem easy to begin using spreadsheets to manage your finances in a spreadsheet. However, 1 or 2 spreadsheets quickly snowballs. You’re now managing your budgets, reporting, consolidation, revenue recognition, bank reconciliation and month-end journals all in different spreadsheets. You’re growing so they’re becoming much more complex. You’re losing track of where they’re stored. Are they even backed up to the Cloud?!

If this sounds familiar, shame on you! Just kidding. We want to help you. But first, let’s see if you can relate to any of the following spreadsheets. Feel free to create a spreadsheet to keep track of what spreadsheets we call out here and make a note if you do or don’t use them. Also a joke, please don’t create another spreadsheet.

1.  Expense Claims

Keeping track of expenses in a spreadsheet can be extremely messy, particularly if you have a lot of employees claiming on a regular basis. We often see businesses with thousands of lines in a spreadsheet, not only is this hard to keep on top of but it is extremely time-consuming (and therefore costly) and so easy to make a mistake. Keeping on top of who you have and haven’t reimbursed can be tough and any delays can lead to negative feelings from your employees. If you owe them money, you want to make sure you’re giving it back to them on time.

Expense software may be more affordable than you think. Pricing for expense software can start from as low as £5 per user per month and can take just minutes to set up. Other best-of-breed software like Sage Intacct, has expense functionality built into it, or you can choose a web expense software of your choice to integrate with, which is really simple to set up.

Before you say £5 per user adds up, it might be worth you working out how much time and money is being spent on managing and maintaining both the Expense spreadsheet and the process generally, you may find you save money by spending money. WebExpenses has a great ROI calculator you can use to understand the benefits of using an expense management solution.

2. Revenue Recognition

Not for the faint-hearted, revenue recognition can be a big challenge for finance teams to manage. Managing revenue recognition in a spreadsheet adds a whole new level of difficulty. Complex, static and fragile are three words that come to mind. Managing revenue recognition in a spreadsheet requires huge levels of manual effort to not only build but to maintain it too. No matter how sophisticated the spreadsheet is, it is prone to human error which is something that is inevitable over time. Errors lead to wasted time investigating and in worst-case scenarios, it leads to reporting inaccurate information and basing decisions on it. Not only that but it’s one of the most common reasons for month-end delays and revenue leakage.

Automating your revenue management will lead to your business gaining efficiency, strengthening compliance and improving visibility.

We’re big fans of Sage Intacct’s revenue recognition functionality. Firstly, the whole process is automated. You can build your own revenue recognition templates, pro-rata recognition postings, schedule revenue recognition journals to run automatically (or review before posting) and generate forecasts and reports to view your anticipated revenue postings.

It’s not all doom and gloom for Sage 200 users! Sage 200 also has revenue recognition capabilities within Sage 200 Contract Manager. It’s just not quite at the same level as Sage Intacct (there’s a reason it’s called best-of-breed!).

3. Imports 

Some businesses may keep track of invoices, expenses or payments in a spreadsheet and then at the end of the month, import those into their finance system. Which, has to be said, is better than having to create them all manually. Others, will export files out of another system (perhaps a CRM), and import these into a finance system, again better than creating them manually. However, it’s still prone to human error, it’s extremely time-consuming and the files could be changed.

Integration between your finance system and the other business tools you use (for example, Salesforce, ExpenseIn) can completely eliminate the need for human intervention and definitely eliminates the need for any imports. Integrations like Sage Intacct & Salesforce offers complete automation with a two-way integration, whether that’s syncing customers, accounts or projects (including Salesforce custom fields), viewing Sage Intacct reports from within Salesforce screens or creating orders, contracts and invoices from within Salesforce, all of this is covered and more.

  • Learn more about the Sage Intacct and Salesforce integration here
  • Learn more about Sage Intacct’s powerful API here
  • Learn more about Codeless’ BPA platform for Sage 200 here

4. Reporting

Reporting in spreadsheets often leads to duplication. Multiple people within the same (finance) team often build similar reports for the same purpose. Spending hours preparing spreadsheets or retyping data because it’s sitting in different systems that don’t talk to each other is one of the main barriers stopping you from getting real-time financial reporting. You spend all your time exporting data to your spreadsheet, looking up complex formulas and finally producing the reports the board has asked for, only for the data to be out of date by the time you need to make decisions. On top of that, human error can lead to inaccurate information. It’s hard to make decisions based on outdated information but even worse if it’s information you’re not sure you can trust.

There is something quite satisfying about reports and dashboards with slick visuals, even more so if they’re interactive.  The power of being able to click into your dashboards and drill down to the detail takes you to another level of reporting and gives you a deeper understanding of the data.

Gaining insight with real-time information is a topic we’re really passionate about –  are you ready for the shift to real-time reporting?

5. Month end journals

74% of mid-sized organisations take over a week and between two and five staff members to coordinate their month-end close.

Closing the books is one of the most time consuming and stressful processes for most financial teams. This is made even more difficult if the process includes spreadsheets. Compiling multiple spreadsheets full of formulas and look-ups in order to create a consolidated view of company finances is a time-consuming process, prone to human error. It often involves many systems being reconciled and consolidated, this can be a messy and complex operation that adds more time and pressure to the finance team. Manually entering accruals and revenue recognition journals, reconciling the bank, and catching up on invoicing are all labour-intensive and time-consuming activities, it’s no wonder it often takes a week and between 2 and 5 staff members.

What if I told you, you could close the books 79% quicker than you currently are?

6. Fixed Assets

It may or may not shock you to hear that some businesses spend hours and in some cases days entering fixed asset data into spreadsheets. Not only that but then they are manually calculating and tracking depreciation and manually entering journal entries into their finance system. Slog is an understatement. Not only is this time-consuming and soul-destroying but let’s not forget about our little friend, ‘human-error’.  To spend so much time on the above to then realise (or not) that there are errors, trying to find them, trying to fix them – this all takes up so much valuable time.

Unified fixed asset management and a core financial solution can save you hours (or even days) every month – learn more about how Sage Intacct can automate your fixed asset management.

Sage 200 and Sage 50 both also have in-built fixed asset capabilities and is one of the most underutilized areas of the products. We offer Sage 50 training and Sage 200 training to help you make sure you’re making the most of your systems, get in touch to learn more about the courses we offer.

7. Checklists

So not only do people use spreadsheets for finance processes, but they also use them to keep track of how they do those processes. Mind blown. Whilst this feels like a simple use of spreadsheets, what you miss out on is true auditability. There’s no way of knowing who completed a task, or when. If someone goes rogue and makes changes, you can’t see who and what they did. When it’s time to be audited, this can be a nightmare. On top of this, if you also manage projects in spreadsheets, that’s yet another place things can fall through the cracks.

Sage Intacct offers checklist functionality built into the system. For example, with month-end, you can get a recurring monthly checklist to run you through the process. This includes assigning tasks to individuals, setting due dates and status’. All of which has full auditability and traceability and can be brought into views and dashboards – you can learn more about Sage Intacct here.

Sage 200 also offers the ability to create and track tasks, it’s not as thorough as Sage Intacct but businesses often find it suitable to their needs.

Don’t forget, you can also look at external tools for managing checklists, ClickUp is one we use internally and love!

8. Extra supplier or customer information

Storing supplier or customer information in spreadsheets is more common than you’d think, particularly when custom fields are involved. We often work with clients who use spreadsheets as their ‘master’ customer or supplier database and only have the basic information in their finance system. When we ask them why typically the answer is, ‘there is no field for X’ in our system. The constant back and forth between systems to get a full ‘picture’ of their customer and supplier is time-draining. Not only that, but you’re looking at duplicate data entry which again is another time-consuming task.

Powerful finance solutions such as Sage Intacct offer the ability to have custom fields against most entity types (customer, supplier, project, contract, etc). This eliminates the need for duplicate data entry and stops you from needing to flick between multiple systems to see all the information you need against a customer or supplier. Click here to learn more about Sage Intacct.

Alternatively, Sage 50 offers 3 custom fields, Sage 200 Standard offers 5 custom fields and Sage 200 Professional offers 20 custom fields as part of their packages.

9. Purchase approvals

Managing purchase approvals in spreadsheets is just asking for trouble. Spreadsheets can be edited and changed without any auditability or traceability. Worse still… people PRINT OUT spreadsheets to get manual signatures and then scan them into the system. This is incredibly manual, bad for the environment, is a slow process and leads to piles and piles of documents flying around the office.

10. Bank reconciliations

Downloading bank statements, printing out said bank statements and then manually checking and reconciling those bank statements against the finance system is typically a process a business would do if they’re managing bank reconciliation in spreadsheets. This is highly inefficient and it can take a full-time job to keep on top of a process like this. A strong finance solution will allow you to connect your bank feeds into the system and offer built-in bank reconciliation functionality, completely slashing the time it would take you to manually manage this process.

  • Sage 200 Professional has bank reconciliation functionality built-in, you can read more about it in our FAQ blog here.
  • Sage 200 Standard offers advanced bank reconciliation, you can learn more about the product here.
  • Sage Intacct offers automated bank reconciliations with its powerful cash management capabilities, you can learn more about it here.

Conclusion

Spreadsheets are great until they’re not. For growing businesses, it will stunt your growth. It lacks automation, collaboration and control and in the long run is just not sustainable. As I mentioned at the start of this blog, it might be worth looking at how much time and money it costs you to build, maintain and run those spreadsheets. You might find that investing in a solid finance solution that is built to scale with your business, helps you save time and money with automation and enables your team to focus on more important tasks is actually a worthy investment.

At the start of this blog, I asked you to stop creating spreadsheets. However, I have one more for you to make. We’ve (ironically) created a spreadsheet template that will help you audit/review your current spreadsheet usage. It asks you to document each and every spreadsheet your finance team uses, where they’re located, how often they’re used and how much time is spent on them. It’s a really good way for you to get an understanding of how much your finance team are relying on spreadsheets and how much it’s costing you.

Fill out the form below to download the template.