lose the spreadsheet addiction
TRANSCRIPT
Lose the Spreadsheet AddictionBest Practices for Successful Accounting Automation
eBook
2 Lose the Spreadsheet Addiction | Ebook
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3Lose the Spreadsheet Addiction | eBook
Table of Contents
Spreadsheets: The Good, the Bad, and the Ugly• ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 4
The Usual Suspects: Identifying Processes to Automate • •••••••••••••••••••••••••••••••••••••••••••• 6
Overcoming Inertia to Transform Your Processes• •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 8
How to Automate: Key Technology Trends in Finance• ••••••••••••••••••••••••••••••••••••••••••••••••••• 9
The Final Rundown + Additional Resources ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 11
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Spreadsheets: The Good, the Bad, and the UglySpreadsheet apps like Microsoft Excel and Google Sheets are ubiquitous in business, especially for accounting. Everyone knows how to use them because they offer so much power with a low barrier to entry. For those who’ve been in the accounting profession for a long time, they may have lingering memories of older tools that were difficult to customize and couldn’t be used for every possible situation. Set against these trends, it’s easy to see why many finance professionals practically live and die by spreadsheets.
However, spreadsheets can be a massive liability when used improperly. Their comfortable, familiar nature becomes a trap when they’re conscripted to perform business-critical processes. Anyone who’s used a spreadsheet can attest to the fact that large datasets are slow and buggy, and they’re often inherited without any kind of documentation to explain their logic. The biggest pitfalls involve manual data entry: it’s an unnecessary time sink that requires gradual growth in headcount, and a transcription error in a single cell can snowball into serious financial ramifications for your business. Here are some real-world examples of when a single error brought catastrophic results:
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• Fidelity Investments’ miscalculated its dividend estimate for its Magellan fund by $2.6 billion because an accountant forgot to type in a minus sign for net capital losses in a spreadsheet. 1
• TransAlta lost $24 million from buying hedging contracts at higher prices than they should have, all thanks to a copy-paste error in Excel. 2
• Barclays Capital purchased 179 unwanted contracts from the bankrupt Lehman Bros when a spreadsheet was emailed out and the associate on the other end incorrectly formatted hidden cells containing assets that weren’t supposed to be part of the deal. 3
At best, relying too heavily on spreadsheets is a hindrance to productivity. Oftentimes, the consequences are more dire with inflated operating costs, delayed cash flow, and obstructing the ability to scale processes. That’s why it’s imperative to lose the spreadsheet addiction - and modernize your accounting processes with automation.
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The Usual Suspects: Identifying Processes to AutomateWhen spreadsheets are so deeply entrenched in your accounting processes, it’s understandable that it may be difficult to figure out where to start. Before you can formulate a plan, you’ll first need to identify which accounting processes are the best candidates for automation. The good news is that oftentimes, the most critical processes reliant on spreadsheets also tend to be low-hanging fruit.
Low-hanging fruit for accounting automation share three key characteristics: they’re repetitive, manual, and involve multiple stakeholders. We asked some accountants and financial systems
What is integration?
Integration is the process of connecting two or more disparate applications together. Spreadsheets are often unconnected to any of your other applications, so you’ll often have to manually key data in and transport that data via importing and exporting csv files. For that reason, integration is a key foundation for automating accounting processes that rely on spreadsheets. To learn more about how to integrate, hang tight: we’ll explain it later in the section “How to Automate: Key Technology Trends in Finance”.
admins to give us some specific examples of the processes they targeted first:
Procure-to-payExample: Before modernizing their financial systems, one finance team used Excel on the payments side. For their Friday check run, they would load their checks into Excel and review what was going in. Loading the positive pay file to the bank was also done manually through generating a CSV file and importing it into Excel to send to the bank.
That team now uses an integration solution to load checks automatically into NetSuite. When a check is approved in NetSuite, the process is streamlined because NetSuite is also the system that will actually pay the check. Taking the spreadsheets out of this initial step improved audit control for this team. Integration also enables the automation of electronic payments functionality by using NetSuite to send the positive pay file to the bank after approval.
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Order-to-cashExample: Price quoting tools often don’t reside in the same system as customer invoice and billing tools. While spreadsheets are often used as a rudimentary quoting tool and a data transport mechanism, the lack of visibility hinders the ability to optimize ACV. In this particular instance, the sales team wanted to start using a proper quoting tool hosted in Salesforce, but needed to get codified parameters for those quotes from financial systems. Integrating Salesforce with their ERP bridged that gap and enabled further automation in the billing cycle. Once you have the capability to pull data from different systems, you can go ahead and actually automate the creation of the invoice record after performing the necessary calculations.
Revenue recognitionExample: An accounting team utilized multiple spreadsheets to enter data from Salesforce into Quickbooks. However, this regularly caused manual billing issues and rendered the team unable to properly recognize revenue and deferred revenue schedules. While transitioning from Quickbooks to NetSuite helped solve their general inability to recognize revenue, the entire process needed to be streamlined in order to scale with the rapidly increasing growth in transaction volume. Integrating Salesforce directly with NetSuite sidelined the hassle of entering data back and forth into multiple spreadsheets.
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Overcoming Inertia to Transform Your ProcessesAutomating spreadsheet processes sounds like a great idea on paper, but it’s all for nothing if you can’t get your team on board to make permanent changes. No matter how much spreadsheets are holding your team back, you can expect pushback for daring to suggest straying from such comfortable, familiar tools.
For that reason, moving business-critical processes out of spreadsheets requires fundamental cultural changes. How do you overcome deeply entrenched habits to transform your processes? To help ease the transition and sell your team on the merits of change, consider the following tactics:
• When seeking approval to develop an accounting automation strategy, present solutions that solve multiple pain points at once backed by projected ROI. It can be difficult to get buy-in if you’re trying to sell senior stakeholders on a specialized solution to a single problem, especially if the budget is tight. You’ll have much more success if you set out to automate multiple end-to-end processes, armed with some solid numbers.
• If you find yourself having limited time between closes to work on automation, enlist your controller or CFO for help during the next few closes. Temporarily backfilling your role for the next couple of closes is a short-term investment that will help you concentrate on identifying the low hanging fruit and develop a solid accounting automation plan that will benefit everyone.
• Involve your team when developing a solution. Sit down with them to understand how existing processes work on a day-to-day basis so you can understand their pain points and the impact that any changes will have. Involving your team and taking their feedback into consideration will work a great deal towards maximizing adoption of new, streamlined processes.
Once you’ve overcome the initial barriers to adoption, you’ll find it much easier to make your team recognize the value of change. Your team won’t miss the days of manually keying in data or tracking it down; senior stakeholders will realize the cost reduction and be more amenable to future
automation projects; and everyone will appreciate the time saved and reduction in errors.
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How to Automate: Key Technology Trends in FinanceMany seasoned accounting professionals entered finance at a time when inflexible, rudimentary on-premise software ruled the landscape. In those times, it made perfect sense to live in spreadsheets when there were no better alternatives.
Thankfully, we no longer live in that world. Within the past 10 years, fintech has made significant advances that make it increasingly untenable to retain legacy processes. Unlike spreadsheets, these newer accounting automation solutions are designed to be collaborative, protect your work with failsafes, and continually add new features. Here are the key innovations behind these advancements:
Cloud computing & web servicesWith the explosion of cloud services, there is much more variety to pick and choose from than ever before. For every accounting process that you’d want to automate, there’s a specialized software solution out there that you can run on the cloud. One such example is Avalara, a platform that automates tax compliance for businesses.
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AI & machine learningThe rise of AI and machine learning has enabled many accounting automation solutions to accommodate the personal needs of their users. For instance, Gappify automates vendor onboarding and accruals with rules-based accounting bots. These bots aren’t just performing preset actions; they’re sophisticated enough to help AR teams with any vendor payment inquiries they might have.
How much IT support is needed to automate accounting processes?
You’ll need to coordinate with your sysadmins and other IT personnel to ensure that any new technology is implemented properly in your business systems. However, as you research automation solutions, make sure to select tools that won’t incur a high cost of ownership. Not all cloud solutions are created equal, so you’ll want to select tools that you can easily maintain yourself as opposed to requiring technical expertise.
Despite being far more sophisticated than spreadsheets, Celigo’s solutions don’t actually require that much more technical support. We’ve intentionally designed our products to help you automate without needing a developer or substantial technical investment.
iPaaSAn iPaaS (integration platform as a service) solves multiple pain points resulting from the overreliance on spreadsheets, particularly those associated with manual timesinks and auditing IPE. Celigo’s integrator.io integrates with any application to help you sync data and automate accounting processes at scale.You may be surprised to learn that all of the examples given in “The Usual Suspects: Identifying Processes to Automate” are real-world instances of integrator.io streamlining critical accounting processes.
Of course, operational transformation doesn’t happen overnight. A good iPaaS should be flexible enough to change as you work through the different phases of your automation plan. For example, Celigo can integrate directly with spreadsheets as you work to transition critical processes out of them. Celigo's CloudExtend for Excel allows you to update scores of records in seconds, eliminate the hassle of exporting CSV files manually, and even manage NetSuite records from Excel.
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The Final Rundown + Additional ResourcesAlthough it will initially take a substantial amount of time and effort to automate your accounting processes, liberating your finance team from the limitations of spreadsheets will only benefit you in the long run. We spoke at length about cut costs and the reduced propensity for errors, but the benefits can extend beyond that. If you use an iPaaS like integrator.io to integrate with your accounting systems, you might find that syncing data across teams helps improve cross collaboration and breaks down the silos that accounting specialists have traditionally been stuck in. Additionally, your team will likely appreciate working on more valuable projects rather than wasting hours repetitively entering numbers.
To help inspire you as you develop an accounting automation strategy, we’ve gathered stories from seasoned finance professionals who successfully used integration to sideline spreadsheets and transform their operations. Happy automating!
Lose the Spreadsheet Addiction - On-Demand Webinar: Watch seasoned financial systems professionals share their personal experiences with accounting automation in this on-demand webinar. Features Jotham Ty (founder and CEO of Gappify), Chris Olson (Director of Financial Systems for Avalara), and Deb Morgan (Celigo’s Sr. Solutions Consultant).
Frontline Education Automates Cash Applications (and Boosts Job Satisfaction): Frontline Education is an edtech SaaS company that couldn’t keep up with peak subscription renewal periods using spreadsheets. Learn how they dealt with a high volume of cash applications without adding headcount - and helped their staff accountants become more engaged with their work.
Spectrio Matches Over 90% of Deposits Automatically: Spectrio is a tech-enabled marketing firm that manually processed over 3,000 check payments per month, committing a full-time employee to just that process. They also had to wait until close of business to view cash flow and payment statuses. Read on about the dramatic change automation brought on their operations.
Staria Oyj Explains Why They Chose Celigo for Their Customers: Staria Oyj is a financial services company that sought a best practice solution to help their customers integrate with payroll systems, bank systems, expense management systems, and more. In this video, hear them explain why Celigo was chosen as the best practice solution for their selective customers.
