by Robyn da Silva, Account Director, Gresham Computing
In a recent poll we conducted with global corporates, over half the respondents confessed to still using spreadsheets to manage their general ledger or accounts receivable processes. When we asked them how long, on average, it takes to allocate and reconcile money received in their back office, more than a third said it takes three days or more, with 16% taking up to a week. When you’re dealing with high volumes of transactions this has a real impact on working capital. So why are corporates hesitant to move on from reliance on spreadsheets, and how can they get from A to B more quickly?
While a wave of new technologies are reshaping the order-to-cash cycle, the drawbacks of reliance on spreadsheets isn’t new. More than ten years ago a paper from PwC, The Use of Spreadsheets - Considerations from Section 404 of the Sarbanes-Oxley Act, highlighted the fact that interlinked spreadsheets, created by end-users, are often prepared with minimal or no planning and documentation, and are rarely subject to the same rigorous level of controls as commercially-developed applications.
However, many are still committed to spreadsheets as the primary tool for managing their cash positions. The issue spans much of the finance and accounting spectrum, making it a huge issue for corporates – in this set-up, one typo could lead to a multimillion pound mistake. C&C, the Irish group that owns Magners Cider, found this out when a human spreadsheet error resulted in shares falling by 15% back in 2009 – after admitting its revenues in previous months had fallen 5%, rather than having risen 3% as initially reported. When technology infrastructure poses a risk to the company’s bottom line, it’s time to seriously reconsider the existing approach.