Digital Nomad Tips: Spreadsheets Errors Can Easily Cost Your Business a Lot of Money

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Company spreadsheet errors are really dangerous for businesses. A minor mistake can lead to huge problems - and the big problem is that this is actually seen as being a normal thing. Companies do not pay close attention to these errors, so a lot of money is lost every single month. High-profile corporate blunders, like that of Enron, now ring alarm bells and business managers actively look for ways to make financial spreadsheets more error-free, but we are still a long way from success. This is especially true for companies that rely on digital nomads for work, because working in a different location can sometimes mean delays in communication.

Digital Nomad Tips: Spreadsheets Errors Can Easily Cost Your Business a Lot of Money

Statistics show that close to 1 in 5 large businesses suffered large financial losses because of spreadsheet errors, according to data provided by F1F9, a company that provides business forecasting and financial modeling. F1F9 warns that close to 71% of large British businesses keep using spreadsheets for making key financial decisions. This can lead to financial disasters. 

It is hard to understand what consequences can appear from improperly using spreadsheets. You surely know how to do many different things, like how to remove blank rows in your spreadsheet, but when it comes to advanced financial documents and computing, things are much more complicated than business owners imagine. 

Right now, spreadsheets are being used for company accounting purposes in corporate settings, covering over 2 trillion dollars. With this in mind, it is quite worrying to see that 16% of the large British companies surveyed acknowledged the fact they found inaccurate information over 10 times per year in spreadsheets. 

According to security and risk experts, spreadsheets are fallible. However, they do underpin financial system operation. In the event that spreadsheets keep being used in these large companies, huge problems are surely going to appear. One in three large businesses are now reporting poor financial decisions because of errors that appeared in spreadsheets. To make matters even worse, financial decision makers that now use spreadsheets in larger companies do not really have training. 

What is important is to understand that while some corporations are actively trying to move away from using spreadsheets, most large firms still rely on them. Even a minor mistake can lead to an improper analysis of the data that is gathered. When combining with accounting, the owners can end up thinking that their business is in a good financial position...when the truth is that things are really bad. 

While it is the large corporations that are usually covered by statistics and reports, it should be added that even smaller companies and entrepreneurs of all kinds are at risk. In the case of startups or even medium-sized companies, a spreadsheet error can actually lead to bankruptcy. While larger corporations do have the resources needed to deal with spreadsheet errors, smaller firms do not - and their reliance on spreadsheets is potentially damaging. 

The bottom line is that business owners have to understand that using spreadsheets is not necessarily the best way to approach financial decision-making, although this is the first idea that always comes to mind. Looking for alternatives or at least having a system in place to check everything is always a good idea. 

 

More digital nomad tips: Ten Work Tips for Digital Nomads

 

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