• Tech

    Accountants Should Dump Microsoft Excel for Database Software

    By | April 6, 2016

    Rumor has it that the AICPA is finally integrating Microsoft Excel into the CPA exam starting in 2018. I’ll admit my initial reaction is “it’s about time” since the generic spreadsheet I used was archaic. Apparently, almost 70% of the CPAs surveyed by the AICPA agreed. Go figure — we are all Excel-aholics who can’t get through the day without busting out a spreadsheet. 

    But, I have to wonder… is our love affair with Excel getting out of hand? It’s really not that great, after all. I know Excel has been declared the winner in the spreadsheet market and stood the test of time. Obviously, it is one of the most versatile applications for accounting and is the third pea in the pod along with Word and PowerPoint. As a part of the Microsoft office suite there no need to shell out any extra mula to start using it. That’s a plus. But, the same can be said for a number of other apps…

    I’m here to make a case that it may be time to ditch Excel and indulge in another, more seductive option: database software. If you’re a Windows aficionado it’s most likely Microsoft Access (again, most people already have it because it is part of the Office Suite) or die-hard Apple fans go for FileMaker.

    Unruly size

    First off, spreadsheets have the tendency to grow larger than your screen. It’s literally a pain in the neck. No wonder people invest in ostentatious 21:9 monitors. The max spreadsheet size is 1,048,576 rows by 16,384 columns! If your spreadsheet is this big… good luck. It is too big for it’s own good. Shame on you for thinking that was a good idea. Or maybe you inherited that out-of-control monstrosity, in which case, I feel sorry for you.

    When is the last time a database had this problem? Um, never.

    Unresponsive files

    As a result of an inexcusably ballooning spreadsheet, don’t tell me you haven’t experienced a slow and unresponsive file when trying to do something easy, like a find and replace. It’s infuriating. Spreadsheets like that are memory sucking behemoths!

    The good news is that database software does this all much better. Duplicate data is excluded (thanks, normalization) so it doesn’t need to sift through as much.

    Sneaky formula coding errors

    You also can’t tell me that Excel hasn’t burned you before…those sneaky formulas that are shielded from view can make or break you. One error and you are out of luck. It’s not college and you don’t get partial credit because of a “flow-through” error. Take a look at these Harvard guys who had an Excel coding error that is to blame for their entire theory falling apart and causing them to look like total schmucks.

    Databases can store queries and scripts that are, at least in my opinion, easier to double check and fix. Even this smart PhD candidate agrees with me because “mapping all the formulas to their corresponding results is incredibly difficult [in Excel]. Without any “central” structure interpreting such things or catching any mistakes becomes very difficult.”

    With three points (even if Excel does manage to get a point for versatility), I declare database software our winner! It’s time to give Access or FileMaker a try.

    Let’s hear it. Are you on #TeamExcel? Do you think a flat file is the bee’s knees and I am just whining because “Either you work Excel, or it works you?” Or, do you think Excel is ruining the world one cell at a time?

    Image: iStock/Johnny Kurtz Photography

    • N.E.R.D.

      I’m actually reading somebody suggest Microsoft Access as an alternative to Excel for accounting work. What?! Maybe for running an organization, but not for the data analysis/management that most accountants do.

      Excel is like a blank canvas for data organization. The skill of the user dictates how good the workbook is and its data integrity.

      Your arguments against Excel (size, unresponsiveness related to size, and coding errors) are all end-user issues. A strong Excel user doesn’t make these mistakes, or minimizes them to immateriality. When I see these kind of issues while doing my job, I immediately know that the workbook author is a newbie; they’ll usually patch up problems with band-aid fixes instead of addressing root issues (like size, testing formula integrity, testing input/output results, checking for readability and logical flow, etc.).

      This is a very weak argument Megan. You’re basically saying that because users lack the skill to utilize Excel effectively, we should replace it. I will give you that Excel does have its upper limits as database software and eventually should be replaced (classic example is ERP > Excel for larger organizations) . However, in accounting this limit is almost never hit at the client level (in my experience at least). I’ve never received so much data from a client that Excel could not be my most effective tool.

      Maybe you’re arguing about databases larger than the day to day work in accounting. IDK.

      • Mike

        I think the point is that we can work more efficiently out of a database than out of a spreadsheet.

        • N.E.R.D.

          Yeah. I don’t think so in the day to day of accounting work. Excel is a fine database tool up to a high upper limit, especially if you have a skilled author.

          I think she’s arguing for a higher level of data management than most accountants will run into in their careers, ever.

        • iamthelolrus

          Which is nonsense.

    • dumpus

      The battle comes down to what you plan on doing with your data.

      Excel is the best application in the world for broad single-serving data analysis, period. It’s quick to set up data, it’s quick to analyze data, and it’s scalable based on the skills of the end user; the level of analysis that an operator can achieve is limited to a function of skill and time available.

      Access is best suited for long-run data management, where new data merges with older data on an ongoing basis. Access is the best for reporting on that data. Access isn’t great for analysis, though. Access also has a higher barrier of entry when it comes to skills/training, and also takes more time to set up than Excel in most circumstances.

      Blanket statements about which is better often ignore the root problem that each application is designed to address. Is there functional overlap? Yes. Is either one a replacement for the other? Absolutely not. Can they both be used to complement each other? Yes.

      I’m trying to think of daily/weekly/monthly accounting tasks I execute using Excel today that I could offload to Access while increasing accuracy and decreasing time spent, and I’m coming up with blanks quite honestly.

    • Jeff S

      I don’t think dumping Excel for Access is the right answer. The author has a point that Excel can get unruly, that’s why no self respecting company would maintain their GL in Excel, they go buy accounting software. Oracle, Great Plains, etc are all just databases at their core, and most of them can be configured to generate reports and perform analysis that some people may do in Excel because they don’t know how to take full advantage of everything their accounting software has to offer. You don’t need Access, just learn to use your existing accounting software more effectively.

    • Big4Veteran

      Excel is the greatest and most powerful computer application ever invented in human history. There is a significant amount of evidence to support my true assertion. I’m a fucking Excel expert, and I only know how to do probably 5% of what Excel is capable of.

      The author of this article (on an ACCOUNTING website of all places!!) is committing heresy, and I think should be burned at the stake if Colin is unwilling to immediately reprimand her.

      • AaronBalake

        I’ve missed you

    • Megan – no one uses Access in the workplace. If you don’t know why, you shouldn’t be writing these articles. And yes, I’m serious.

      • Megan Lewczyk

        While I beg to differ that “no one uses Access” (I used it all the time while auditing controls and bumping lists together to find exceptions), I hope you realize that Access is just one example. Large companies would obviously need a more robust ERP system (e.g., Oracle, SAP, or JDE) which are, wait for it… turbo-charged databases.

        • N.E.R.D.

          “Large companies would obviously need a more robust ERP system (e.g., Oracle, SAP, or JDE) which are, wait for it… turbo-charged databases.”

          To come full circle: How does this help your grunt auditors and tax people (basically anybody below senior manager)?

          For real. I don’t see the value, especially over a flexible program like Excel.

        • Big4Veteran

          I have both pots and frying pans in my kitchen. They are both highly useful and essential tools, but they are used for different things. There are only a handful of things I could use a pot for that would normally be done with a frying pan, and vice versa.

          TL:DR This whole conversation and the article to which it relates is stupid.

          • Tax Nerd

            I’ve always said that Excel vs Axcess was like a car versus a plane. Sure, one covers more ground quickly, but if you don’t know what the hell you’re doing with it, you can crash and burn spectacularly.

            The other is smaller, yes, but also more nimble and easier for many more people to use with less training, and thus can be shared. I can share spreadsheets with clients, and not worry that too much is going to get severely damaged.

        • Well I’m staggered. I’m not an external auditor but if I was going to ‘bump’ lists together, depending on the volume, I would be inclined to use Excel and the concentate function to identify exceptions. In the Internal Audit Teams I have worked for, depending on the volume of transactions, ACL is used to the crunch the data.

          The main reasons why Access isn’t used in the majority of Finance Departments as it is a difficult application to ‘network’, i.e. have multiple user access to the database. The other big reason is ‘have a go’ IT or Finance will attempt to code a program in Access and somewhere down the line the code becomes corrupted resulting in a corresponding loss of data. Once this happens, Financial Controllers, Heads of Finance, etc, usually go hopping mad and send anyone in easy reach to the Tower. And lastly, most IT Departments refuse to support it.

          NB: As an aside, I really hate giving away trade secrets in public!

        • Another exKPMGer

          I didn’t think the purpose of your articles was to discuss accounting ERP systems. Yes, everything from Oracle to the 30 year old software my current company uses is built off of relational databases. As @disqus_FVswXKtuKl:disqus notes below, relational databases are great for long term data management and retention. They allow you to query historical results and gather the data you need to do your job. Where they fall short of Excel is in their ad hoc usage. It takes much more time to set up and link a relational database, and then figure out how to draw the connections from it that you want. Conversely, when you have a quick need it’s much, much simpler to dump your data into Excel, write a couple formulas, use a couple sorts and highlights, and bam, you’ve figured out what your problem was. 9 times out of 10 when I’m using Excel for a quick ad hoc style request, I delete the end result because it wouldn’t be useful a second time, or even if it would be, it took <5 minutes to create, which I wouldn't mind doing again in the future if need be. That's why Access and other tools are called database MANAGEMENT tools. They're in for the long haul, not the short ride. And most accountants spend their life on one short ride after another.

          • LikeABoss

            This is the correct and complete answer.

            Accountants (tax/audit/analysts) analyze outputs on a periodic basis and report on them. We need to understand and be able to use our ERP systems, but converting ERP outputs into other databases to perform analysis seems like additional steps.

          • dumpus

            meh, i would have sworn more. +1 nonetheless.

      • Chevy

        I use Access at my job. I open the Navigation Pane, open the data table, then copy/paste the entire table into Excel.
        From there, I filter/pivot to analyze my data. Excel is very useful.

      • itauditsecurity

        Monkey,
        I welcome the chance to argue with you on yet another location. Yours and mine just aren’t enough….

        I use Access and so do others. Sometimes, it’s just handy and exactly what you need. Our department uses it for non-critical stuff.

        Last week I received a file with 1 million rows. The IT guy couldn’t get it into Excel, so they dumped it in Access. It was easy to import. Of course, I would have preferred a CSV, but it was easy for IT, easy for me, and I’m not complaining.

        I agree that you shouldn’t use Access for critical stuff. But don’t say it isn’t used; it is. And for more critical stuff than you could imagine.a

        Cheers.

        • Sadly, your reply just typifies why the world and his dog hates anyone in IT and IT Auditors. Just because someone, somewhere used Access once doesn’t make it mainstream. The majority of the contributors here (who work in Finance or Audit) dislike Access, the majority of firms I’ve worked for dislike Access, the bods in IT don’t like Access. This is telling me that no-one bar you and a handful of others use Access. I rest my case.

          • itauditsecurity

            Monkey,
            Whenever you make blanket statements like ‘no one uses Access” and “everyone hates…IT and IT auditors”, you set yourself up for failure and appear as the one on the mountain who can see and judge all.

            Others disagree with you. Some even like IT auditors and IT. Someone once said the world was flat, but that didn’t make it true.

            Access hangs on because it works in some cases and it comes installed on many work computers along with MS Office. Not the best tool for the reasons you noted, but it works. Again, I wouldn’t use it for finance or critical apps, and when we find that we raise an issue.

            I don’t disagree that many in your profession dislike Access. But I took issue with your assertion that no one uses it.

            • You are being pedantic. And nothing winds me up more than pedantic Auditors! And the view from the top of the mountain looks good from here!

    • Chevy

      Those 21:9 monitors are ssssiiiiicccckkkk

    • Reasonable Assurance

      Excel > *

      • Mose Schrute

        Excel controls us all!!! All hail Excel!!!

        • Big4Veteran

          If you don’t love Excel, then you are not an accountant. You may do things on a daily basis that resemble things that accountants do…but you are not an accountant.

        • AaronBalake

          I don’t like you, and I like your comments even less

    • Mint

      Pivot tables.

    • Or you could just buy real accounting software that doesn’t require outside manipulation of data on a regular basis.

      • dumpus

        Ain’t nobody got time for that.

        Or money, for that matter. Implementation + licensing + hardware/infrastructure for even a modest organization can run upwards of $1,000,000, not even including running charges, for an end-to-end system. My organization makes out like a bandit by having me play excel monkey 40 hours a week instead of implementing a truly consolidated enterprise system.

        • Adam Hill

          100% agreed. Outside of the 40 hours/week that is……… you must have rounded up

      • I haven’t come across an accounting system yet that doesn’t require a subsidiary system, be it Excel or something else to produce financial MI. As dumpus notes, everyone thinks system imps are easy; they are not. There’s the spec, acres of testing, defects, modifications, let alone the armies of Project Staff and Management Consultants charging exorbitant fees.

    • KM

      Why does it seem like the articles from the newer contributor are always trying to sell me something?

      • Telling you what you already know may be more appropriate.

    • As for dodgy formula, there is software/applications on the market which allow formula to be verified and anomalies to be detected, e.g. hidden tabs. It all depends how much control FD’s wish to exercise over their spreadsheets and these can run into thousands. In some instances though, the management team doesn’t like having too much oversight as they want wriggle room.

    • JessterCPA

      Isn’t this why tools such as ACL and IDEA exist?

      • Indeed. I suspect that rather than setting up ACL or IDEA, importing data and setting these programs in motion, Access is used a short cut because the user is more proficient with this application.

        • JessterCPA

          That’s fair. But there is training.

          I have been trained on both ACL and IDEA, I think each was a day or day-and-a-half. I also don’t think the software itself is that expensive, heck even the small firm I work at now is willing to discuss these options this summer.

          • Excel is 100 times more intuitive and easily manipulated than ACL. I’ve used both and would 100 times use excel over ACL any day of the week.

            • Mose Schrute

              I JUST TORE MY ACL…

      • McValue Meal Audit

        I’m a big fan of IDEA.

    • Your mother

      I’ve come to realize I hate all of your articles.

    • EMArnold6

      I don’t view it as Excel vs databases (but use MS SqlServer or Oracle instead of Access).

      Deliver results to Excel or stats packs in a comprehensive table that meets your analysis needs. This means no vlookups, hookups and and index matches. Join and aggregate at the database layer, because it’s more efficient and less mistake prone if you wrote a good query (plus it is easier to debug a query than a formula chain vb combo sheet).

      Then pivot slice and pretty up the data all you want in Excel. If you make a readout, I would suggest automating in SSRS or a reportomg interface, but if you are modeling what-if scenarios, Excel is a great playground for analysis.

      I’ve built incredibly complex Excel sheets, with the lookups, matches and macros but they become unwieldly. Learning to code makes you appreciate simplicity over complexity. I love Excel, but I view it as a tool for initial exploration and prototyping. Once something is mocked up and proven to be accurate I would throw it to a developer if working at a large company or build an SSRS report myself at a small company.

      Automation let’s you spend less time gathering the data, and more time interpreting it and making the recommendations that drive your business’s profitability.

      Expand your toolset. There are lots of resources such as coursera, codeacademy, udacity, and stack overflow that allow you to learn sql. You can experiment for free with MySql and SqlLite. If you want to do next level statistical analysis without paying for a license, learn R.

    • Dear Megan,

      Stop writing inane crap. Thank you.

      Yours truly,

      Quixote

      • Mose Schrute

        Dear Quixote,

        Please continue being awesome!!!!!

        Best,

        AaronBalake

        • AaronBalake

          You are not AaronBalake.

    • cronos2546

      This whole post could be replaced with one sentence: Don’t use Excel as a database software.

      The more important rebuttal to your point would be the inverse: Don’t use database software as Excel.

      The effort of any number of software companies to build massive, unwieldy reporting tools to replicate what some smuck with a BS in finance and marketing from Applachia state could do in an afternoon is the source of any number of problems.

      Your attitude (some people misuse Excel) is what leads to these unnecessary issues.