Many accounting professionals struggle with the daily frustrations of managing complex financial data in Excel. These issues are more than just nuisances; they lead to severe errors, missed opportunities for collaboration, and, ultimately, a stressful work environment that can drive even the most seasoned accountants toward burnout.

Consider the stress of discovering a significant error just as a financial report is due or the inefficiencies of juggling numerous spreadsheet versions among team members. Such daily struggles consume your time and lead to poor client experiences and potential compliance issues.

Yet, some accounting firms refuse to purchase cloud accounting software in order to save money. But are they really saving money when you factor in all of the added costs that can occur with sticking to an ageing, breaking system?

Unfortunately, the answer is no. 

When you consider all the hidden costs of Excel in accounting, your firm can lose valuable resources – including your staff, who are worth more than what you’ll save.

The Hidden Costs of Excel in Accounting

While versatile and something that all accountants have used before, Excel presents several challenges for modern accounting firms, creating an unproductive and stressful work environment. 

Error-Prone Data Handling

Excel’s format, while flexible, is inherently susceptible to human error. According to industry studies, 90% of spreadsheets with more than 150 rows have at least one major mistake that can compromise business decisions and financial reporting.

Errors can arise from simple oversights such as miskeying numbers, incorrect formula references, or dragging formulas across columns without proper adjustment.

For instance, Fidelity, a financial services corporation, was forced to cancel a year-end dividend distribution of $4.32 per share because of an Excel accounting error. The tax accountant made a mistake while transcribing the net capital loss of $1.3 billion to a spreadsheet, turning the loss into a gain and causing the dividend estimate to be off by $2.6 billion.

So, it’s not a matter of if your firm will make a costly mistake using Excel. It’s a matter of when. 

The constant vigilance and attention to detail required to avoid mistakes in data entry are mentally exhausting, as they demand sustained focus and frequent double-checking.

The stress is compounded when errors lead to financial discrepancies that must be tracked down and rectified, often under tight deadlines. This can be further exacerbated if you have multiple versions of the same work saved and you do not know in which version the error occurred. This increases workload, anxiety, and frustration, making accountants stuck in a seemingly endless cycle of corrections and verifications. 

In addressing these challenges, excel accounting alternative Silverfin transforms the traditional approach to managing financial data. 

Russell Frayne, Director of Transformation at Gravita, highlights the efficiency of such tools: “Instead of reviewing the data manually, we ran it through Silverfin Assistant. The tool ran around 100 checks and spotted three or four opportunities that were ‘nice to know,’ but also four spot-on errors,” explains Frayne. “It would have taken an accountant, say, 30 minutes or more to dive into the file and find those anomalies.” 

This example underscores how leveraging automated tools saves time and reduces the risk of human errors. It frees accountants from the exhaustive cycle of manual corrections and protects your firm from costly mistakes and potential reputational harm.

Read more: Reputation at Risk: Why Delaying Your Firm’s Accounting Cloud Migration is a Reputational Timebomb

Lack of Real-Time Collaboration

Excel’s design does not inherently support real-time collaboration – remember it was designed with a desktop-only application in mind. It’s a significant drawback in interconnected work environments where multiple team members need their own copy of the spreadsheet to make changes. Then, those updates need to be manually merged into a master spreadsheet.

This sequential approach slows down the workflow (creating bottlenecks and increasing frustration) and prevents the kind of dynamic interaction that modern projects often require. As businesses increasingly rely on timely data to make decisions, Excel’s inability to provide real-time updates and simultaneous access increases time spent waiting for information, or updates could be used more productively, leading to inefficiencies that sap energy and motivation.

As accountants, you know how frustrating it is to start a set of accountants and then have to put it down while you wait for someone else to make changes or add data into Excel. It’s a waste of your time, disrupts your workflow and makes billing for your hours at month’s end a nightmare.

This issue is exacerbated when team members and clients are in different locations. The lack of instant collaboration can compromise critical decision-making and lead to delays, which can be particularly stressful during periods of financial reporting or year-end audits. 

Some firms have moved Excel into the cloud, but it still lacks much of the functionality cloud-native accounting platforms provide. Modern cloud accounting software has collaboration at its heart and provides functionality with built-in features that integrate all communication into one environment. 

Martin Bugg, Digital Partner at Larking Gowen, explains how moving away from legacy software to Silverfin improved real-time collaboration: “Before Silverfin, submitting a set of accounts could take 15-30 minutes. Through Silverfin, it takes five to ten minutes to submit it and have everything filed correctly. The ability to message someone through the software with your review point and action it in a more real-time manner is a great benefit.”

This direct feedback underscores the improvement in efficiency and stress reduction when moving from traditional spreadsheet management to a more integrated, real-time solution.

Read More: Technology Used in Accounting Firms: 5 Ways AI is Transforming the Industry

Inefficient Time Management

The manual processes required for data management in Excel are notoriously time-consuming and inefficient, particularly as data complexity increases. 

Accountants often find themselves embroiled in the tedious tasks of entering, updating, and verifying data in sprawling spreadsheets, as well as aggregating data from various sources. This manual intervention consumes a disproportionate amount of time and diverts attention away from higher-value activities such as advisory services and strategic planning. 

Additionally, the time spent troubleshooting and correcting spreadsheet errors adds another layer of inefficiency. These delays can cascade through the department, affecting everything from routine bookkeeping to critical financial analyses, ultimately leading to prolonged financial closing cycles and delayed insights into business performance.

For example, if there is one set of default workpapers that everyone in the firm uses, and there is a mistake in the Excel formula, the error would run across hundreds of accounts and create a debacle trying to fix the issue.

To address these inefficiencies, cloud accounting software like Silverfin allows your team to focus more on strategic activities and less on data wrangling. Hollie Moore, Manager at BKL, highlights the impact: “A set of accounts that previously took around 25 hours in 2021 only took 12.5 hours in 2022! This substantial time-saving is solely attributable to the use of Silverfin schedules.”

Further emphasising efficiency, Mark Thurston, Director at Gascoynes, shares his experience: “If you’re doing work for a client on a quarterly or a monthly basis, the ability to roll that data forward when you come into a new period versus a very manual process with Excel is done at the click of a button, accurately.”

Lastly, Thurston again noted the benefits of live data integration: “Live data links are a real time saver for any firm. They remove the need to constantly import and export trial balances or push adjustments. Having the data connect and having it standardised is really important.”

Read more: The AI Advantage: Why AI and Accountancy Goes Hand in Hand

How to “Excel” in Accounting Without Spreadsheets

Switching to a cloud-based financial reporting and compliance platform​ like Silverfin can transform how your firm handles financial data. It directly addresses Excel’s limitations and reduces the risk of burnout among your staff. 

It scales with your business. With everything in the cloud, you can focus on client acquisition without worrying about handling the increase in data or planning a migration.

Silverfin automates many repetitive tasks done manually in Excel, drastically reducing the likelihood of human error and the time spent on these activities. By also automating routine processes, Silverfin frees up accountants to focus on higher-level analysis, enhancing job satisfaction and engagement.

Furthermore, Silverfin offers enhanced security features, ensuring that sensitive financial data is protected against breaches and losses—a security level hard to achieve with standalone Excel files.

Request a demo with Silverfin today and take the first step towards a more efficient and less stressful accounting environment.

Frequently Asked Questions

What are the most common errors when using Excel for accounting?

The most common errors when using Excel for accounting include incorrect data entry, formula errors, broken links, and misalignment of rows or columns that lead to inaccurate calculations. These errors can result in financial discrepancies and flawed reporting.

Why is Excel considered inefficient for managing large datasets?

Excel is inefficient for managing large datasets because it can become slow, unresponsive, and prone to crashing. This inefficiency makes it difficult for firms to process data quickly and can hinder the scalability of business operations as data volume grows.

Can reliance on Excel increase compliance risks in accounting?

Yes, Excel lacks built-in compliance features, making it challenging to ensure financial reports adhere to the latest regulations. Manual checks are necessary to avoid compliance issues, which are time-consuming and prone to errors.