When we look at the history, MS Excel was released by Microsoft way back in 1985 and it is fair to say that Excel has transformed the world of accounting and business in that time. But since then the world has changed dramatically and according to the Wall Street Journal, a lot of large companies are phasing out Microsoft Excel nowadays¹. CFOs of such companies like Adobe or ABM Industries complain that their employees take too much time to work with Excel accounting spreadsheets.
Because the aim of any business is to obtain the maximum possible benefit for its owners. There are many factors that may hinder a company's ability to grow: poor marketing, static product line or low-grade quality of product. But sometimes companies underestimate seemingly simple everyday things that actually work against their employees. One such is the use of the MS Excel spreadsheet in customer interaction instead of a CRM (Customer-Relationship-Management) ecosystem. There is quite a lot of information on this subject and even a lot of jokes on the internet, but this article has compiled list of mai weak points of Excel for corporate finance processes:
1. Excel is time-consuming
Due to the current digitalization, most companies are dealing with the new reality, where they have to learn to do the right time management to save as much time as possible because time is the only resource no one can afford to waste.
Excel is one of the most time-consuming aspects of business that employees are facing every day. “Excel is slow” is a common complaint for more and more employees. Excel is not used to tackling large data sets and if we can go back to the roots of Excel history, we can mention the fact that Excel’s framework was not made for big data processing. So it’s not just that Excel is very slow, but it just becomes error-prone with big data sets.
2. Excel is error-prone
Even the largest companies with a lot of workers and careful workflow are not immune to infrequent permutations of numbers, calculation errors, and typing mistakes. It is already proved that almost 90% of all Excel spreadsheets contain errors³. Because of the badly thought-out use of Excel software, many companies struggle with a range of issues, for example in 2020 Public Health England was having a dramatic problem, which was caused by excel mistake. This led to the news that 16 thousand coronavirus cases went unreported in England, just because of the excel error.
3. Excel is not a database
What really distinguishes the MS Excel from the CRM (Customer-Relationship-Management) ecosystem software is the data security. Excel accounting gives a wrong sense of security with its password protection. Because if there is no audit trail in Excel, fraud is very hard to prevent. The numbers are easily changed and if verification is not done independently, there is no way to catch the mistake. And the real danger is that Excel spreadsheets do not supply any audit trail or any other proper security. This can lead to inaccurate or false information in documents, which in turn brings the company to huge risks and the danger of fraud.
4. Excel is less profitable for expense management processes
Just imagine how much time you can waste chasing employees for the needed information or non-exhaustive compliance checks, encouraging the whole business to comply with company expenses policies, and then transposing all that information into an accounts package using Excel Spreadsheets. This is one of the biggest disadvantages of spreadsheets, which leads companies, especially business accounting and finance departments to very inefficient results. Excel still does not boast many of the features that most AI-based systems have: automated workflows and compliance processes. Enough is just to scan and submit your expenses and then the software will automatically validate data, check VAT, and synchronize your ERP according to your specific accounting rules. In this case, Excel is way less profitable for corporate expense management.
Companies are moving to the better alternative tools
Optimising the management by using digital software can lead to significant financial gains for the company. One of the objectives is reducing the risks of fraud, errors and saving time. But the benefits of going digital are greater than just increased efficiency. Digital software makes it more efficient to manage your business and accounting, especially with its automation and paperless solution. Its many advantages include:
- Drastically reduced risk of errors and attempted fraud
- Time savings and increased efficiency at every level of processing
- A more dynamic way of monitoring and managing expenditure
- Faster payment of reimbursements
Nowadays companies' transition to digital and paperless solutions has been spurred even further by the health crisis. The pandemic has paralyzed companies that have now been forced to have employees work remotely. Today it's impossible to imagine a company operating without ecosystem software. But isn't Excel in this case too old for the big data era?
Achieving efficiency with digital alternative tools
The rapid digital adoption driven by COVID-19 made many companies move to better alternative tools to achieve better productivity in this special time. Jenji provides an efficient way to manage expense reimbursement, with no need for obscure Excel spreadsheets. Jenji App helps companies automate a time-consuming process, gain better control over individual employee expenditures and avoid errors. The software also provides reliable tracking with full visibility on every expense (e.g., instant notifications when an associate enters receipts using his or her smartphone), faster reporting and better compliance with company policies.
Following advantages of expense management software not only recover the Excel weak points but also can accelerate the organization’s finance management capabilities to keep pace.
For more details on Jenji, don’t hesitate to contact the Jenji team at sales@jenji.io. We will be glad to assist you in setting up your project.
Sources:
(1)https://www.wsj.com/articles/stop-using-excel-finance-chiefs-tell-staffs-1511346601
(2)https://www.forbes.com/sites/salesforce/2014/09/13/sorry-spreadsheet-errors/?sh=6f32c0356ab2
(3)https://www.bbc.com/news/technology-54423988
(4)https://www.upslide.net/en/csa-and-upslide-study-how-the-finance-industry-uses-the-microsoft-office-suite/
