Regulatory Risks: 5 reasons to stop using spreadsheets
The regulatory dangers of spreadsheets and shared drives.
The humble spreadsheet has proven to be a Swiss Army knife for businesses small and large. From finance and accounting to sales activity and account management, spreadsheets have become the backbone of many a company. As well as their obvious ability to handle financial calculations, spreadsheets are used for a wide range of tasks including inventory management, in presentations, to record activity, and even to store information as a simple database.
The sheer ubiquity of Microsoft’s SharePoint and Excel have made them the engine room for businesses from every industry, whilst Google’s early application of collaboration tools to allow multiple users to work together on documents simultaneously allowed Google Sheets to gain ground. From a regulatory standpoint though this system may not be enough, and the question should increasingly be asked what the differences between the one size fits all approach of spreadsheets on shared drives, and specialist software accessing a range of databases.
Specialist software is taking over
It is Google’s desire to take advantage of future trends that should make their recent acquisition of AppSheet pique the interest of any business that feels that they are bumping up against the limitations of spreadsheets and shared drives. AppSheet provides a platform for companies that would like to build mobile apps in a no-code environment. This type of service is well suited to companies that would like to move beyond spreadsheets to purpose built software but that lack the required development resource.
Whilst it is early days, the trend towards easy to use purpose-built software is well underway. The proliferation of simple to use applications has already spread across accounting, payroll, banking, stocktaking, and too many other areas to list here. Within the regulatory space, purpose-built software has some clear advantages over spreadsheets.
5 reasons to stop using spreadsheets
- Accuracy – Studies have placed the number of spreadsheets that contain errors may be as high as 90%. Whatever the exact numbers, manually typing into spreadsheets is unlikely to keep regulators convinced that you have the right level of operation cadence in place. These errors can compound over time, increasing the cost and effort required for maintenance.
- Collaboration – It might seem subtle, but even with the advances made by online solutions, collaboration on spreadsheets or other documents remain flawed. There is still no way of controlling the order the collaboration might need to occur. Review and approval remain outside of the document and is often a manual process.
- Integration – Most regulatory processes are a mix of data collection, expert input, analysis, and reporting via regulatory forms. Using shared drives to record data in spreadsheets, word documents, and presentations, is confusing at best. The extra challenge of needing to have a point in time record across these documents makes them wholly unsuitable for regulatory purposes.
- Workflow – Adherence to many regulations is a process rather than an activity. Often one person’s requirements are dependent on someone else having already completed their tasks. Recent regulations within financial markets have required input from Senior Managers, Compliance, HR, and individual stakeholders. Without a proper workflow tool, management of this process is left to co-ordination via email, which does not provide the right level of regulatory completeness.
- Flexibility – Whilst flexibility might usually be considered to be a benefit, when it comes to meeting regulatory requirements this is not the case. Ask ten people to use a spreadsheet to record some information, and you’ll get ten different replies. Whilst using templates can help, these are still open to interpretation. If you really want to manage inputs and outputs, Excel is just too flexible.
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