While software developing companies work tirelessly to build cleaner, more efficient solutions to database organization, most businesses still tend to rely on archaic spreadsheet software. But why?
The widespread availability of programs like Microsoft Excel and Apple's Numbers make them appear to be the default solution for data organization, but there are many other database software solutions, like FileMaker, that lend themselves to much more customization and specialized functions.
"Excel's great for checking scores in your bowling league, but it's a loser," Constellation Research principal analyst Barry Wilderman told CFO.com. "CFOs can use it for personal use, but that's it."
The WeiserMazars 2011 Insurance Finance Leadership Study revealed that while 87 percent of companies still rely on Excel in their planning, budgeting and other performance management processes, it's not necessarily the best tool for financial planners.
WeiserMazars warned that Excel may be a quick fix to recording the information, but can have "costly long-term deficiencies … [that] include: recurring manual efforts that balloon close cycle times, misstating financials due to multiple versions of the truth flowing across units, and allowing marginal resources to become critical ones because they own a particular model or workbook."
In conclusion, the research firm suggested that finance leaders should lessen their reliance on spreadsheets, and those who do will see "equivalent or greater gains in operational effectiveness."
Jim Burleigh, CEO of software sales forecasting and management provider Cloud9, told CFO.com, "[Excel is] not an enterprise tool. The error rates in spreadsheets are huge. Excel will dutifully average the wrong data right down the line. There's no protection around that."
Mistakes in any database can be detrimental, but flaws in financial records could literally be costly. Financial planners and investors that still use spreadsheets to track monetary data should consult a FileMaker developer that can create custom databases that make Excel seem like a big waste of time.