A spreadsheet – the solution to all your needs....NOT!

A few issues have surfaced in recent weeks with spreadsheets. Don’t get me wrong - I love spreadsheets as much as the next accountant, but sometimes it really does not fit the bill. They can also be downright "dangerous" although recipients of the information therein may be none the wiser.

We recently came across several accounts filed by the same accounting firm at Companies House. These were so obviously prepared on spreadsheet templates. All of them had fixed assets notes, many of them populated wholly with 0's, and there were other notes that had 0 figures, and many disclosures were not in fact required any longer. The references to the legislation on the balance sheet etc. were correct, so the spreadsheet had been updated at some stage. Cynically, I wonder if this was after a set had been rejected by Companies House?

There was a pension note in all of the accounts filed which stated that the pension contributions were disclosed in accordance with SSAP24. Many today have probably never even heard of SSAP24! This was withdrawn in the early 2000's....so that note has been hanging around, probably untouched, for 12-15 years or so. Do their clients know any different and that it is wrong – no they don't!

Whilst a spreadsheet template could be used for this purpose, a good knowledge of both how to use them effectively is required.

“I don’t need dedicated software – I can do everything in a spreadsheet” was another comment heard recently. Despite the fact that the cost of using dedicated software for the task in hand for 12months was approximately 2-3 hours of chargeable time, reinventing the wheel to create spreadsheets would take many hours. There were very few figures anywhere, no calculations needed; the data entry was predominantly text entry. The reporting functionality in the software allowed output by data type, and produced a task list where there were items still to be completed. Why use a spreadsheet? I fail to understand the logic of not using software I’m afraid.

 Back to accounting …. Why type all bank entries into a spreadsheet and perform the analysis there as well as the bank reconciliation then take the monthly totals and post them into a well known accounting software package? If they are to be manually entered (so old fashioned!) why not use the accounting software and the bank reconciliation facilities in the product? What about looking to see how the figures are made up? It necessitates going back to all the underlying monthly spreadsheets as there are only 12 monthly totals in the software.

Don’ t just reach for a spreadsheet for every task or think it is solution to all your needs!

Anonymous