Home  >  Why eMerge™  >  Risks of using a spreadsheet
Although using spreadsheets often saves time up-front, because people are familiar with the program and therefore do not need to be trained, using spreadsheets for financial consolidation is incredibly time-consuming in the long run and fraught with risks..
Spreadsheets are highly person dependent
The person who designs the spreadsheet is the owner of the spreadsheet. With multiple years of work being done on a spreadsheet, changes keep creeping in and the spreadsheet can get really complex – where it can go to a point that it cannot be used by anyone except the owner. At this point it becomes totally person dependent. For whatever reason, if that person is not available at the time of consolidation, the work can come to a total standstill. Also – a major problem is that normally there is no formal review process in a spreadsheet on the correctness of the process followed for arriving at the results.

If the person who has developed this spreadsheet leaves the organization, it is almost a certainty that it has to be re-developed (as it is almost impossible to hand over all the complexities involved in maintaining the spreadsheet)

Spreadsheets don’t facilitate collaboration
Spreadsheets cannot be developed collaboratively nor can they be used collaboratively. There are collaborative spreadsheets available free (in open source), but they cannot handle the complexity that the established spreadsheets can. As a result, the entire burden of work is landed upon the owner of the spreadsheet

Multiple versions of spreadsheets can lead to confusion
It is almost inevitable that you make multiple copies of large spreadsheets – either at the time of development or to check different scenarios. As a result, you end up with multiple spreadsheets containing small variations of the same data.

This problem occurs because spreadsheets aren't bound to a single source. Even if the original data is downloaded from the same place, say an ERP system, collecting it at different times can result in mismatched spreadsheets. Additions or deletions made to some versions but not others can also create differences.

Spreadsheets are time consuming
Since the spreadsheet cannot be handled collaboratively, if multiple people have to use it, the whole process becomes linear – which makes the whole thing very time consuming. All this, when the time between the quarter end and the board meeting is shrinking!

Errors can go unnoticed
As we all know, thoroughly checking spreadsheets for errors is a chore that no one wants to do, so errors slip past unnoticed. There have been studies that show that errors persist even when professional auditors have gone through them to spot errors -- errors in data, errors in formulas, broken links and so forth. Finally, we reach a point where we don’t know if there are any errors and don’t notice them (or don’t care about them) till it finally comes back and bites you really hard.

There is no access control
It is not possible to allow someone to see only some part of the spreadsheet or give access to some part of it and restrict access to some. So, if the sheet has to go through multiple hands, everyone gets access to everything and there is a grave danger of some errors (inadvertently or intentionally) creeping in

Lastly, there is no audit for changes
There is no audit available of only the changes done. For example, if an auditor wants to check only the new accounts introduced since the last quarter or the changes in mapping done since last quarter - that is not possible. Also, if there is any cut paste error introduced, such a change can go totally unnoticed
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