Getting spreadsheets to add value as well as numbers

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SpreadsheetsSpreadsheets can be used in almost any part of a business. While accountants feature highly among users, Excel’s ease of use at a basic level means that most people can create a spreadsheet.  Having said that Excel is very powerful and a little knowledge can be a dangerous thing.

A contact of mine Steve Randall recently shared an excellent article on spreadsheet controls on LinkedIn. Steve’s company, Vonya Global, is based in the States and provides outsourced internal audit services. The article said that ‘various studies estimate the potential for significant errors to be as much as (or more than) 80% of all spreadsheets in use’.

There is a link below to the article, which very much struck a chord in the light of my work with small/medium sized businesses. I find that spreadsheet effectiveness is also often an issue for SMEs and here are some questions to help you decide whether your spreadsheets are adding value as well as numbers.

Are users really getting what they want from the spreadsheet?

Do users have to play around with the spreadsheet or extract information to get to what they really need? eg: if you are looking for a report of the fastest growing product lines – is that what you are getting or do you have to sift out information that you don’t need?

If the spreadsheet produces management information – are you getting everything you really need or are you ‘making do’?

Is the information presented user friendly? Or are you faced with an unnecessary mass of numbers?

Is there unnecessary manual intervention?

What does it take to use the spreadsheet?  Is Excel’s potential being put to good use?  Is there unnecessary manual data entry or ad hoc data manipulation? Manual entry increases the likelihood of errors and takes time.

Excel not only adds numbers –it can be a great way of sifting through text and summarising things.

How reliable is the source information?

It’s an old adage, ‘garbage in garbage out’. Source information, should be complete as well as accurate.  As well as thinking about the accuracy of the data, it is important to make sure that it is complete.  Are checks built in to validate the spreadsheet?

How robust is the spreadsheet?

The Vonya Global article contains various tips which should help prevent errors occurring or things inadvertently being overwritten.

Who prepared the spreadsheet?

Does Excel feature highly in the person’s job spec? If the preparer lacks spreadsheet experience then it is much more likely that there will be scope for improvement.

A lack of Excel knowledge can also lead to time being wasted.  An extreme, real life, example is someone cutting and pasting information to put it in alphabetical order when Excel’s sort function could have been used in seconds!

Wrapping up

Excel is an extremely powerful tool and if used in the right way can contribute to better decision making and a more profitable and resilient business. On the other hand the opposite can be the case if spreadsheets are not treated with due respect!

If you feel that you could be getting more value from the spreadsheets in your business then do feel free to get in touch.

 

 

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