The danger in using excel for financial data and how to avoid it

Excel is an outstanding tool. For years it has helped financial controllers, data analysts, and reporters keep track of projects…but is excel a flawed program in the age of tech control?

We make mistakes…

As much as we may not want to admit it, humans are prone to making errors. 

We miss crucial points, overlook important details, and fatigue can cause us to be skim over details we would otherwise usually consider. 

When it comes to dealing with large and complex construction projects, this can quite literally be the difference between turning a profit and going bankrupt. 

Scenario:

Joe is a Financial Controller for a construction company that builds 200 homes a year. He has been accidentally skimming over a single line-item expense for colorbond roofing in his monthly reporting budget. He was causing a small but significant discrepancy between what’s in the bank and the budget. This oversight results in his business missing budget by $137,500 over the course of the year.

and this was just one mistake…

How good are you at programming in excel?

Excel is a complex program – that’s one of its benefits, but also one of its downfalls. Not everyone has an equal level of programming expertise in the business. 

Now, while new technology also requires its own skillset, the learning curve required to adopt, implement, and optimise technology is far smaller than that of excel. 

Accounting software specifically suited to your industry is an asset to an organisation trying to merge roles. It reduces the reliance on ultra specialised individuals and can place a heavier reliance on technology, which requires less human intervention and less knowledge of how it works.

Get the whole picture more visually.

When you’re looking to draw conclusions in excel, it requires an enormous amount of cross-referencing between spreadsheets and then making assumptions based on that data.

With the vast majority of software options out there, data is collated and turned into visualisable graphs and insights, which means that you can instantly make decisions out of data. 

Not only is this a smarter way to operate, but it’s also much more accurate. It is almost eliminating human error.

Move away from static data.

Business is moving quicker and quicker. We can’t rely on data that isn’t as up to date as possible. 

Traditionally, businesses will use data from previous quarters spreadsheets to inform decisions in the next quarter. 

This strategy can prove risky as sometimes issues (or even opportunities) may not be identified in time to capitalise or action them. 

Get dynamic, start visualising your data and understand how you can gain better insights, information, and predictability by using technology. 

Need help?

Speak to Thrive about how we can help you use technology better and move away from those dreaded spreadsheets and get away from the dangers of excel accounting. Give us a call on 1300 868 474 or email one of our software experts on info@thrivetech.com.au.