As the hammer is for the carpenter, as the stethoscope is for the doctor, as the scissor is for the barber, so too is the spreadsheet indelibly associated with the accounting profession. For decades, accountants have relied on spreadsheets to the point where it's difficult to imagine any sort of client engagement without at least one.
Yet that same familiarity has bred contempt. It is not at all difficult to find a litany of complaints about the extensive use of spreadsheets in the accounting profession. They can be read in articles, heard at conferences and seen in one's own everyday experience with the tool.
Despite all this, however, the spreadsheet endures. While a number of alternatives have been developed over the last few years, none has been able to match its sheer ubiquity in accounting offices. The spreadsheet is not dying, despite the panoply of pronouncements otherwise. In fact, according to Randy Johnston, executive vice president of K2 Enterprises, it is stronger than ever.
"The bottom line is spreadsheets are used by more people for more things than ever before, and I don't see that slowing down in any shape or fashion. If you look at the big competitors like Excel, use and adoption is up. If you look at something not quite as sophisticated like Google Sheets, it's doing fine. If you look at additional competitors like SheetRocks or Zoho Sheets and so forth, there's just continued adoption for lots of reasons," he said.
This isn't to say that people are just making things up when they complain about spreadsheets. Johnston said they have real problems, such as not scaling particularly well, requiring a lot of manual entry, being prone to human error, and sometimes being utterly incomprehensible to anyone but the person who created them.
"You think of this inefficiency, this error-proneness, the calculations being incorrect, and if the model gets bigger it gets harder to maintain," he said. "Spreadsheets can become much like historical spaghetti code in programs. You almost can't follow them … . It's a love-hate relationship almost everywhere. Everyone loves their spreadsheets to the point where they would never let them go, you can't take that away, but on the other hand it's, 'Please give me an easier way.'"
L. Gary Boomer, the founder, visionary and strategist at Boomer Consulting, said there is strong demand for something that will address the deficiencies in spreadsheets, and accountants would be well advised to explore them if they plan to scale up their practices in any way. One of the things preventing people from exploring these alternatives more fully, he believes, is the fact that people tend to stick with what they know, even if what they know isn't the best thing for their situation. Learning something new can be more of a challenge, but he said that accountants would benefit from meeting this challenge.
"We use the spreadsheet to manipulate data, but there are programs that are superior to the spreadsheet for certain applications. There's that old saying that, 'This is what I know so that is what I use,' and that's no knock against the spreadsheet. It's just that you can go back in several different professions and look at they tools they used, and some of those tools are still around, but they're just not as prevalent with the leading companies," he said.
Limited by complexity
Donny Shimamoto, founder and managing director of IntrapriseTechKnowlogies, agreed the spreadsheet isn't dying anytime soon, if ever, because it has so much flexibility and functionality as well as ubiquitous access and ease of learning. In general, he said, when someone is trying to move from spreadsheets into what might be called a "better" solution, it is usually because there is:
- A large volume of data;
- A highly complex data or analysis model;
- A need for better control and ease over what can be accessed and changed;
- A demand for better data linkages without the risk of maintaining multiple spreadsheets; or,
- A desire for better version control.
"For example, for a very simple business you could keep their books on a spreadsheet with the financial statements compiled via a pivot table," said Shimamoto. "But you need to have the accounting knowledge whether to put things in the debit or credit column, and there aren't any built-in spreadsheet controls to ensure that debits and credits balance. Everything must be done manually. Thus most organizations, regardless of size, will utilize some kind of accounting software."
The limits of spreadsheets become even more pronounced the more complex a company's needs are. He noted that many organizations do budgeting and forecasting in Excel, which is fine if there are only one or two people working on this. But once the budget has to be distributed to a department manager for input, and then reconsolidated from a department-by-department level to a general budget, and then analyzed through corporate performance management software for "what-if" scenario modeling with multiple versions of the budget for different business conditions, spreadsheets may not be the best tool for the job.
Inherently, spreadsheets are "two-dimensional," he noted, being made up of just rows and columns. When doing more complex analyses, a professional will often be working with a multi-dimensional data model that can include a chart of accounts, time, product category, location/region/geographic information, product attributes and more.
"This type of analysis can be done in a spreadsheet, but this keeps your analysis fairly flat and you are limited in the volume of the data you're working with," said Shimamoto. "You probably need a database behind the spreadsheet to store large volumes of data; you probably want to use some statistical analysis software to look at the multi-dimensionality; you may want to use artificial intelligence to help identify trends that you can't easily see; you may want to use a data visualization tool to help create more engaging 2D or 3D graphics with drill through and easier filtering capabilities."
Adapting and evolving
Jamie Fowler, chief transformation officer at Top 10 Firm Grant Thornton, noted that spreadsheet software developers have been hearing the same complaints for many years, leading to increased functionality over time. In essence, spreadsheets are changing to overcome the limitations people often complain about. In this respect, according to Fowler, the spreadsheet isn't dying, it's adapting. She pointed to what Microsoft has been doing as but one example.
"Even Microsoft has supercharged its own products, so beyond Excel that there are now things like Power Apps and that takes the spreadsheet to another level in the way data is displayed and the way that data is crunched. We could also look at examples of other types of spreadsheets that take the ordinary spreadsheet to what I'd call a 3D view in terms of taking the data in. Not just sorting by two variables but maybe even more all at the same time, which gives a lot more wisdom to the accountant as they're completing their jobs," she said.
Grant Thornton, she said, is excited about spreadsheet enhancements to the point where exploring these options is a major component of the firm's FullStax group, which focuses on learning new technologies, including these new types of "supercharged" spreadsheets. Mariano De Socarraz-Novoa, product manager within Grant Thornton's enterprise transformation team, said that learning how to use these enhanced spreadsheets has done much for addressing their oft-cited flaws.
"Being able to connect and supercharge our Excel spreadsheets is easier than ever using these no-code techs. With a lot of these operations you'd be doing formulas in Excel and linking sheets together and making these super-complicated spreadsheets. You can do that very fast in these platforms with the click of a button [due to] a lot of these integrations with [Microsoft] 365," he said.
The benefit has been that users can cut down on the time they spend writing formulas into spreadsheets, instead of just dragging and dropping information into a platform they can then output a fully formed spreadsheet on its own, he noted.
It's these enhancements that demonstrate how the spreadsheet is evolving to meet new market demands.
"These supercharged technologies allow for not as many mistakes to be made [like] the old, broken formulas and all those problems that can really create havoc for accountants," said Fowler. "It's a different world."
