Home ASC 606 Part Four: Excel is Not Intended for Sharing

Part Four: Excel is Not Intended for Sharing


Posted by KristenLawson on Jun 25, 2018 4:00:00 PM

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Beginning in January, we posted a blog outlining five important reasons why excel spreadsheets were not to be trusted for implementation of the ASC 606 guidelines. Since then, we have extended that blog post into a series devoted to the topic of Excel, focusing each post to one of the five reasons. This month’s rally: “Excel is Not Intended for Sharing”.


First, let me remind you what was said in January:

“Spreadsheets weren’t really designed with revenue management in mind. Revenue managers spend significant time working with senior members of their team to ensure the company effectively complies with the new revenue recognition standard. Within enterprise level businesses, a staff accountant could be assisting in the completion of the month-end close process in conjunction with the Senior Manager of Technical Revenue Accounting, the Manager of Revenue Accounting, the Manager of Revenue Assurance, the General Ledger accounting team, members of the Billing Operations team, etc.
Revenue reporting should be a collaborative activity with a range of individuals and systems, but Excel doesn’t allow for real-time editing between multiple users without a Microsoft Cloud subscription, and again, the audit log is difficult to decipher without significant legwork. Version control may also be a guessing game for enterprise level companies with multiple offices or departments all relying on the same spreadsheet, especially when the alternative may be saving these larger-than-life files in a shared working space – something we have all learned to loath.”


Now on to the good stuff:

Have you ever gotten one of those “#REF!” errors in your Excel and had a mini panic attack? Well you’ll be unsurprised to find out that my job responsibilities include mocking up revenue management systems in spreadsheets for presentation and conversion into our automated software for our prospects and clients. I set up use case scenarios in extremely detailed Excel spreadsheets to help people understand the calculations in our software.

Every time I get a “REF!” or “#N/A” error, I cringe. I’ve tried my best to limit the number of cells that require human touch. However, if I make one too many moves in the spreadsheet that I hadn’t anticipated earlier on in my set ups, entire sheets may be rendered “N/A” or contain incorrect formula references when I add one simple item. I have to check and recheck every tab in my Excel sheet before I send it to anyone. And most recipients now receive locked Excels so they can’t accidentally change the sheet.

It’s tedious to say the least. But the goal is to share these spreadsheets with my coworkers for implementations and testing, as well as with prospects, and I don’t want to worry that a minor change will have a domino effect on the rest of the spreadsheet. Therefore, I take on the task of managing the spreadsheets to ensure its integrity alone. However, it must be shared eventually, and that’s when I am most worried. I will spend copious amounts of time with clients and colleagues, explaining the system and the inherent data limitations, but will often have spreadsheets returned with enough errors that I just start over. It’s unavoidable.

I simply can’t imagine managing revenue in spreadsheets with more than two team members. No wonder it takes you so long to close the books – you’re triple checking your spreadsheets for “#REF!”s after your colleague went through the spreadsheet, rather than performing closing processes.  How many versions of the same spreadsheet do you have on your computer that you have to manage? I bet your colleague has three more. So, I implore you to make a change; automate the process and streamline your efforts. Excel is not the answer.

Take the anxiety of revenue management. Invest in a solution that is meant for sharing. Making the necessary changes to your internal systems mitigates security risks associated with managing human and technological resources. You should be focused on managing the revenue – not the spreadsheet.

Topics: Revenue RecognitionRevenue ManagementRevenue SoftwareEliminate SpreadsheetsASC 606Rev RecIFRS15,GAAPBlog

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Kristen is a CPA in Massachusetts and graduated with a Masters in Accounting from Wake Forest University. She currently works as a Sales Engineer with Softrax, focused on streamlining revenue recognition processes for businesses in all industries, large and small. She came to Softrax from the Big 4, where she worked as a consultant in the tax accounting, strategy and operations, and technology departments.