ALL HAIL THE SPREADSHEET!!

Russ Gambrel, Senior Consultant Fahrenheit Finance – July 2013

If you are an accounting professional over the age of forty, take a moment this week to ponder the sad farewell of LOTUS 1-2-3.    As announced in May -with little fanfare and even less media coverage- IBM will discontinue the marketing of their SMARTSUITE software this month.   In doing so, the Computer Age toolbox bids adieu to one of its most seasoned and beloved (if not tragically obsolete) tools.   So long LOTUS 1-2-3, we hardly knew ya.

Actually, if not brought to my attention whilst researching this article, I would still be utterly unaware that LOTUS even existed past about 1995.  Turns out it has maintained a large enough cult of users to justify its continued production.  Or at least it did until now.

And while VisiCalc can always lay claim to being the world’s first spreadsheet program, its lack of a graphical interface precluded sweeping acceptance.   It was LOTUS that brought spreadsheet electricity to the masses.

I was a green summer intern in the late 1980s when I was first introduced to the awesome power of LOTUS 1-2-3.    Over the course of those three months, the accounting nerd in me reached a state of nirvana.   I saw the future.   I saw the dawn of a new world where hand-written roll-forwards were, thankfully, forsaken for good.

30 years on, Excel has become the new standard but spreadsheets as a vital business tool are seemingly here to stay.  They drove the proliferation of the PC and they still represent the largest platform for business data analysis by a wide margin.

Despite this, no matter where I go, I am always astonished by the massive inefficiency and misuse of this tool.   Make no mistake, the current version of Microsoft Excel is an absolute Ferrari.  Unfortunately, the vast majority of teams, departments and even companies I’ve encountered are driving it around like a YUGO.  (and while I’m stuck on the car analogies, is it interesting only to me that there was once an exotic sports car called the Lotus Excel?  Coincidence? I think not!)

The misuses are many but a few of the most common mistakes I see are:

1. Tab Overload – illogically shoving all your data onto a single tab can be infuriating to decipher.   Take the time to ‘bucket’ your data into logical sets and make tabs for each.  If possible, link the sets to a summary tab.
2. The X & Y Axis of Evil – data should flow on every tab from top to bottom.  There should NEVER be more than one X&Y axis on a single tab.  I see this mistake a lot.   Two sets of data should NOT sit side by side.  Each set should have its own tab.
3. Bad Design Theory – if you inherited a spreadsheet you hate completing every month, the last guy was probably clueless about good layout.   Take the time to update and correct.   Patchwork spreadsheets grow into untenable monsters after a few years.
4. Empty Row Syndrome – don’t laugh.  Seems simple but someone accidentally CUTS when he/she should’ve hit COPY and now your filter is no longer capturing all your data.  An incredibly common mistake that leads to bad reporting.
5. Cell cul-de-sac – recognizing that not all data sets are created equal, I still contend that the vast majority of a spreadsheet’s cells should contain formulas or links to pivot tables and/or VLOOKUPs…not dead ends.   Information should flow to a logical summary.   Once you introduce the raw data, a spreadsheet should do all the heavy lifting.   This requires good design.

This represents just a small handful of issues.   I shutter to think of the millions of man-hours lost to bad spreadsheet design and I wonder the cost to American business.   Come to think of it, that sounds like a great idea for a spreadsheet…

Russ joined Fahrenheit in 2012 as a senior business consultant and project manager bringing over 17 years of experience in project leadership, SEC reporting, auditing, accounting, IT systems and internal control design.  Russ is a former controller and university instructor, has served in finance and accounting roles internationally, and has extensive consulting experience in designing and implementing internal control environments, including S-Ox. Russ is a graduate of Baylor University with a BBA in Accounting and is currently completing a Management in Information Systems degree at the University of Maryland.