8 Challenges When Using Excel For Accounting
Accountants are among the professionals that use Excel most frequently. They often use accounting software such as Oracle, Sage or NetSuite as the primary tool, but Excel still remains convenient addition. Spreadsheets can accommodate extracts from those systems and allow developing a bespoke accounting system in Excel. On the other hand, being a multipurpose programme not designed exclusively for accountants, it may pose a handful of challenges.
Accountants - what's your greatest challenge when using Excel?
To help you overcome your excel challenges as an accountant, we asked accountants and business leaders this question for their best tips. From flexibility problems to complexity issues, there are several challenges that you or other accountants may face while using excel.
Here are eight unique challenges when using Excel:
● Too Much Flexibility
● Large Datasets Cause Excel Crashes
● Increased Risk for Error
● Surplus of Features
● Difficulty Following Tutorials
● Lack of Collaboration
● System Integration Complexity
● Time-Consuming Data Entry
Too Much Flexibility
Despite being an advantage, the flexibility with Excel for accounting is really a double-edged sword. I find the flexibility allows me to make tweaks that marginally improve the system. The marginal tweaking feels productive but is actually a time-waster in the grand scheme of things.
Dan Dima-ala, Freedom Locker
Large Datasets Cause Excel Crashes
One of the greatest challenges when it comes to using Excel is data load. For larger entities with large data sets, Excel may not be sufficient. It is very easy to crash your Excel when there’s too much data, formulas, and the like. Instead, many companies may opt to use data analytics tools like Tableau and Alteryx.
Rronniba Pemberton, Markitors
Increased Risk for Error
As an accountant, my biggest challenge when using Excel is the likelihood of errors being present in a spreadsheet. These errors could be logical or stem from mistakes made during data or formula entry. This challenge is exacerbated by the fact that it is often difficult to catch these errors beforehand, especially when there are multiple people entering data and formulas into the Excel sheet. If this erroneous data is used to make decisions, the results can be disastrous.
Carol Tompkins, AccountsPortal
Surplus of Features
I think that the greatest challenge that accountants find is staying up to date with all the different tools and features of Excel. They are bringing out new features constantly and very rarely take any away, so there are sometimes multiple ways to achieve the same result. It can be quite confusing to decide which tool, formula or feature to use. As an accountant, having good Excel skills is one of the best things you can do for your career, in my opinion. So, staying up to date with all the modern Excel tools and features as they are released is certainly worth the effort!
Danielle Stein Fairhust, Plum Solutions
Difficulty Following Tutorials
If you have a newer version of Excel, you can make use of sophisticated pivot tables that help you both simplify and analyze highly complex data manipulations. I have watched tutorials on using them for trend detection and data comparison. But I still find the Wizard that helps you choose the data while using Excel fairly difficult to follow.
Bryce Welker, CPA Exam Guy
Lack of Collaboration
Excel is a great tool to use as an accountant and helps me stay organized throughout my day-to-day. The greatest challenge I face when using Excel is the fact that it isn't very open to collaboration. I can share a file and edit a file alongside a coworker, but it's not open to "real-time" collaborations and editing. In many ways, this is not an issue and helps secure the data I'm working with. But occasionally, I find myself needing to work on a project simultaneously with a coworker, and I'm unable to so. I believe it would be a great feature for Excel to add the ability for a more collaborative workspace, especially with the increase of remote work.
Jacob Dayan, Community Tax
System Integration Complexity
The main challenge with using Excel for accounting is creating a comprehensive view of all your finances. Excel can do a decent job of tracking cash flow as long as you include a running account balance that is regularly reconciled. You can also use Excel to track bills payable and invoices receivable, but it's complicated to integrate all three systems (cash, A/P, and A/R) to create a complete picture of your business activity.
Tim Yoder, Fit Small Business
Time-Consuming Data Entry
The use of excel in accounting increases the risk of errors such as unbalanced entries and incorrect additions. These errors are due to formulae that, when set up in excel, can be overwritten accidentally. Excel also increases the time spent creating reports and entering transactions. The more complex the organization’s transactions, the greater the likelihood Excel cannot manage accurate entries and prepare multi-dimensional reports. Overall, Excel increases the risks of inefficiencies and risks of fraud and errors.
Kirsha Campbell, The Cash Lab