Being bad at Excel is bad for business 

DocsCorp President and Co-Founder, Dean Sappey 

Accountancy practice management software has come a long way. Today, features like automated billing and reconciliations are easily integrated into the day-to-day practice workflow of Wolters Kluwer Tax & Accounting UK customers.

Our employees work side by side with our customers to create and manage these solutions – driven by a deep understanding of their needs and addressing the rapid changes in their environment.

However, it’s often hard to look beyond improving performance in day-to-day operations. Amid Brexit, the COVID-19 pandemic and other disruptions, accountancy practices and their clients are dealing with an unpredictable economic landscape. Future business planning can appear daunting.

However, technology can support accountancy practices (and their clients) in making informed business decisions, and planning for the future. In the first part of our Accountancy Practice Management for Future-Fit Growth series, we’ll explore how they can use technology to define and easily track Key Performance Indicators (KPIs). Doing so gives practices closer control of performance tracking, and deeper insights that will inform strategic growth plans.

Saving Time

For several decades, business technology platforms have enabled practices to track performance metrics that they have customised. This highlights areas that qualify for improvement and underpins strategic planning.

Contemporary technology, such as CCH KPI Monitoring, makes setting up KPIs faster and easier for accountancy practices than ever before. This is vital today. The current business landscape demands that firms assess and amend KPIs more frequently, based on fresh market variables. KPIs such as client retention rate and business time-to-recovery have become increasingly prominent performance indicators in the past year. If clunky technology makes KPI management difficult, practices have less time and insight to plan future growth.

Reducing Risk
CCH KPI Monitoring makes it far easier to track KPIs and report on them. This is fundamental in minimising risk. For example, if a KPI is set to track and escalate debt filtered by overdue dates, the ability to easily set alerts and automatically generate reports is critical to practice performance management.

Some practices are manually running monthly reports to measure KPIs. Others are running real-time reporting engines, a key feature of CCH KPI Monitoring. This latter solution allows practices to review essential data at any time – covering both performance management and compliance requirements. They can do so remotely or on-premise.

This means that firms can assess issues before they become problems, and thus act proactively. Real-time reporting is a true asset in building a future-fit practice.

The Proof is in the Practice
A number of Wolters Kluwer customers have been using CCH KPI Monitoring for several years now. Our customers look to us when they need to be right. Ryecroft Glenton has successfully integrated CCH KPI Monitoring with its own system. This consolidates information from several sources, including CCH Central and CCH Practice Management.

“We can use the year end date to trigger a sequence of reminders. Have we asked for the books? Have they been received? If a request to a client has been outstanding for a certain period, the partner will receive an alert via email. For limited companies, we can monitor the corporation tax and Companies House filing deadlines – as well as the different deadlines for pension schemes”

– Ian Smith, partner at Ryecroft Glenton

Corporate events agency who benefited from greener graphics initiative

“Apogee are not just aprinting company, theyconsult with us and go onto deliver a full end to endservice from concept toinstallation. They go aboveand beyond and we lookforward to continuing ourjourney with them”

Corporate events agency who benefited from greener graphics initiative

“Apogee are not just aprinting company, theyconsult with us and go onto deliver a full end to endservice from concept toinstallation. They go aboveand beyond and we lookforward to continuing ourjourney with them”

Corporate events agency who benefited from greener graphics initiative

“Apogee are not just aprinting company, theyconsult with us and go onto deliver a full end to endservice from concept toinstallation. They go aboveand beyond and we lookforward to continuing ourjourney with them”

Corporate events agency who benefited from greener graphics initiative

“Apogee are not just aprinting company, theyconsult with us and go onto deliver a full end to endservice from concept toinstallation. They go aboveand beyond and we lookforward to continuing ourjourney with them”

Excel’s long-held status as the program of choice for accountants comes down to the fact that it is considerably easy to use, modify, and adapt to a variety of businesses processes and functions. Because so many businesses use Excel spreadsheets to make crucial businesses decisions, the results they produce are incredibly integral to success in the financial industry. This is why errors in Excel can be particularly disastrous. 

Back in 2015, The Telegraph published an article titled, “Stupid errors in spreadsheets could lead to Britain’s next corporate disaster”. It cited statistics like 71% of large British businesses always use spreadsheets for key financial decisions but 33% reported poor decision-making because of spreadsheet problems. This paradox – in that so many businesses rely on a completely fallible programme, are fully aware of its risks, and still do nothing to mitigate against them – still exists today with Excel being used for everything from a high schooler’s homework project to the trading and betting of billions of dollars on the financial market. 

Financial regulators have begun to address the inherent risks Excel poses to the banking and insurance sectors. Both the Basel Committee on Banking Supervision (BCBS) and the Financial Services Authority (FSA) in the UK emphasised the importance of managing risks around incorrect, false or even fraudulent data when relying on spreadsheets. 

Errors and inconsistencies in Excel can have consequences that cascade down to stakeholders and investors and impact an organisation’s worth. Though Excel will play a slightly different role in each company, there are four issues that are causing many a sleepless night for CFOs across Britain. 

Dueling spreadsheets: Why your numbers are slightly off 
Dueling spreadsheets is the term ascribed to the phenomenon of having two or more versions of a spreadsheet with inconsistent data. When spreadsheets aren’t associated to a single source – which is most of the time – the data collected can vary. Even if data is downloaded from the same place, like a client database, collecting it at different times will produce mismatched spreadsheets. Any additions or deletions within versions will also result in variances. 

Inconsistent or incorrect data will affect reporting, as each spreadsheet version will produce a different result. Any decisions based on these results will not be based on the best possible business intelligence. Moreover, employee time is wasted trying to determine which version, if any, is correct. 

To keep financial data as accurate and controlled as possible, establish a single, protected financial data source. This will help wean business intelligence off spreadsheets, and put more emphasis on dedicated financial management software. Organisations can use enterprise resource planning (ERP) tools that integrate with data to create a consolidated data source – saving time normally spent extracting data and putting it into a spreadsheet. 

Drain on resources: Why Excel is a time vacuum
A Ventana Research survey published in 2013 indicated that 54% of companies that identified themselves as substantial spreadsheet users take seven or more days to perform the monthly task of closing the books. 

Though Excel may initially take less time for staff to adopt than other, less familiar programmes they spend comparatively more time on finance processes in the long run. Often, users spend most of this time trying to find and correct errors within spreadsheets that are used by or shared within a department. Rarely do they spend time doing complex work in Excel. 

Organisations can claim back some of this lost time by exploring other options for closing the books besides spreadsheets. More efficient software could streamline the process, where spreadsheets may only bog users down in repetitive processes. 

Financial leaders could use a subsection of a team to trial more than one software solution. Consider the pros and cons of each to find the best fit for your needs, and then deploy the winner office-wide. Switching to an ERP that has a user interface like that of Excel will help to keep training time down. 

Human error: Why you can never relax
Human error is as unavoidable in Excel as it is in everyday life. Combing through tiny cells of data and complicated lines of formula is a tedious task that can often result in the reviewer missing something because they are simply trying to get it over and done with. Most of these missed errors won’t have a life-changing impact, though some can be immensely damaging. 

In 2012, J.P. Morgan suffered $6.2 billion in trading losses all because of errors in the spreadsheets used for their analysis (they were copying and pasting data from one spreadsheet to another). They are a good example of why a relaxed attitude towards errors can be risky. 

Organisations can’t do much about human error – it will happen from time to time. They can, however, use professional auditors to scour spreadsheets or bring them in to train staff on the best way to search for and fix errors. Departments can implement a check system to run spreadsheets through at least one other person besides the creator. It is also wise to perform these checks regularly so that a run-on error doesn’t impact a large amount of data.

Metadata leaks: Why you need clean documents 
In 2013, the London Borough Council accidentally published the metadata related to 2,375 residents online in response to a freedom of information request. It took two weeks for an external administrator to remove the metadata, and the incident saw the Council fined £70,000. 

I also saw one case at a UK law firm where a lawyer mistakenly thought he was only copying selected cells into a proposal document, but had been embedding the entire spreadsheet. Any recipient could simply double-click on the copied content to bring up the lawyer’s entire client list and a historical rate card showing what they were all being charged. 

Leaking sensitive information – whether intentional or not – can result in severe financial penalties as well as irreparable damage to client relations and an organisation’s professional reputation. 

Use a metadata cleaning tool to ensure you’re not sending anything outside of your organisation that could come back to bite you. Choose one that integrates with your email to ensure that files are cleaned prior to being sent outside the company. A metadata scrubber will also prompt users to remove hidden cells and sheets, redacted data, and information like who created the spreadsheet. 

In summary, a complete phasing-out of Excel in the financial industry is not on the cards but also not the solution. There are ways businesses can avoid the most widespread issues associated with Excel – dueling spreadsheets, wasted time, a lax attitude towards errors, and metadata leaks. Staff training and the right data management applications are essential to keeping information accurate and consistent across the business. Better information means better business intelligence, which means a better bottom line. So, maybe it’s time you took that advanced Excel course.

Jul 2017

Making Tax Digital Dominated Accountex 

Thomson Reuters hosted a series of seminars at Accountex – the UK’s biggest accountancy exhibition and conference – on the practicalities of working with HMRC’s Making Tax Digital (MTD) regulations and provided real-life insight into the MTD pilot.