At the end of every month, quarter and year, finance teams across the globe spend thousands of hours reconciling spreadsheets manually to close out company books in Excel. If this includes your company, don’t worry, you’re not alone.
In fact, according to the Robert Half and Financial Executives Research Foundation benchmarking study from 2016, 52% of U.S. companies that responded to the survey still reconcile accounts manually. The number is steadily dropping, but there are still a significant number of companies that commit resources monthly to reconciliation instead of utilizing them on more value-added tasks.
The amount of time required is only one of the dangers of manually validating spreadsheets. In fact, there are a number of others that are far more concerning than wasting resource time.
The Danger of Time and Skills
It isn’t just that using complex manual spreadsheets is a waste of time for your highly skilled CFO or finance team. In fact, a big issue is that it requires these highly skilled company resources to do the work. These resources are not only an expensive means of validating the data, but they are also hard to come by.
In that same Robert Half report, financial executives reported that the market for talent was tight. The result? The largest companies saw increases in overall compensation for these resources.
Each hour, then, was more expensive, making manual validation an increasing expense. The report also found that it took an average of 8 days every month to close the books, which involves much of the accounting team. Annually, that number jumps to 25 days.
Testing and Complexity
As financials become more complex, so do the spreadsheets and data import processes required to get the data where it needs to be. But more complexity means more programming and more testing to validate data.
Establishing import formatting and creating formulas and functions to support user input requires time. Spreadsheets are also not known for their flexibility. When business processes change, spreadsheets don’t easily change with them.
Manual entry, complicated formulas, and changes and updates require testing and re-testing of data. A simple error can snowball into substantial problems, resulting in the biggest manual reconciliation danger of them all.
The Biggest Danger of All
What’s the biggest danger? Human error. Entering a number incorrectly, accidentally deleting a cell, or inputting a flawed formula can all result in incorrect numbers. The results can be far worse than the time spent reconciling data.
Human error can mean misreporting of month end or year-end numbers. And that can mean a damaged corporate reputation and even fines for misreporting.
Validating data is critically important, and checking and re-checking numbers manually takes time and concentration from skilled resources. If not done, a company’s reputation could suffer.
Manual spreadsheet validation can be costly and dangerous to your company. Organizations of every size rely on Centage Corporation’s Maestro Suite which includes Budget Maestro™ to help them keep track of and manage their cash flow. Budget Maestro improves the efficiency and effectiveness of business budgeting and planning, financial forecasting, financial consolidation and reporting processes. For more information, take a tour of Budget Maestro, contact Centage, or call 800-366-5111 now.