Today’s accounting solutions make their best attempt at financial reporting. These report writers are often not easy to modify and difficult to learn. Some are excellent and serve the company well, but that is the exception. Most accountants find these systems frustrating as they do not provide the specific financial information required to guide a company in the current economic conditions. As stated by a well-respected technology executive, “accounting systems today are like driving a car using only the rearview mirror.”
As accountants, we know what we want and we know Excel. Rather than attempt to modify report writers and waste time and resources, many accountants turn to Excel to provide a fairly quick report writing platform. Some accountants turn to Excel out of frustration in dealing with an information technology group that does not understand accounting. The standard financial reports are not adequate enough to provide the information needed.
Many years ago I was asked by a very frustrated Great Plains executive “when will accountants stop using spreadsheets?” I replied rather quickly “never, they will have to rip my spreadsheet from my dying hands!” So far it appears this statement was very prophetic.
The most compelling argument for spreadsheets or Excel is the ability to use historical data to forecast or predict what is coming next. Second is the flexibility of reporting or calculation. We can calculate almost anything we can imagine. True, some calculations are a bit more complex than sums, but we can almost always get there with the data features in Excel.
For example, it is now easily possible to sort and summarize based on cell color and find the average, minimum, maximum of the same range. Try that in your report writer.
Data can be brought into Excel via cut and paste, data import, or data links. In my opinion, all spreadsheet users should be forced to go back and use the Lotus 1-2-3 Data Parse routine. By doing so, you would gain a great appreciation for what you have in your hands now with Excel 2010. Yes, Excel 2010 has added some very welcome features that should help accountants with their reporting tasks. However, the most significant new features of Excel were added in Excel 2007.
One thing is certain, you need to move from Excel 2003 and go through the learning curve to learn Excel 2007 & 2010. The productivity of these new versions of Excel is worth all the cost and learning curve frustrations you will experience. For example, the ability to group and report data through Excel Tables is stunning. Learn about Excel Tables and do not confuse them with Excel Data Tables or PivotTables - they are neither.
Yes, Excel 5.0 released in 1993 did contain many reporting and calculation features such as Custom Views, Subtotals, Regression Analysis, PivotTables, but when combined with the new Excel Tables, Power Pivot, and SumIFS function, you have very powerful reporting tools for accounting. Never has anyone invented a more powerful tool for the accounting profession than the electronic spreadsheet – never!
Now it is up to you to take the next step and learn about the features mentioned above and more. Excel can be a great aid to financial reporting but you need to understand how the tools work together. I wish you all happy computing and balanced financials.