Has your business ever had a spreadsheet health check?
Research regularly highlights the risks involved in spreadsheet use. A YouGov survey in 2015 found that one in five large businesses had suffered financial loss because of poor spreadsheets. Often this relates to errors in one-off transaction models or forecasts; other times a broken spreadsheet may form a vital, and potentially weak, link in the chain of management information.
These risks can be significantly reduced through the adoption of spreadsheet best practice. Our financial modelling team are major advocates for the development and implementation of best practice spreadsheets and modelling, publishing a best practice guideline in 2016. To support this guideline, they have developed a spreadsheet health check tool to evaluate application of best practice techniques.
A spreadsheet health check is particularly beneficial for regular users of complex spreadsheets in business, or companies that use a high volume of excel spreadsheets in their financial reporting processes, as it can help identify any potential errors and risks in the model.
What does the health check involve?
The health check tool entails:
- risk assessment diagnostic tests to evaluate a given spreadsheet against generally accepted best practice principles and risk indicators;
- a standard set of tests using a range of software add-ins and spreadsheet review tools; and
- the production of a key findings report using graphical analysis, charts and grids to highlight potential risk areas, before providing simple recommendations for remedial actions.
What are the benefits and limitations of the health check?
The health check provides an objective technical appraisal of spreadsheet risk. Benefits include:
- indicating the construction quality of a spreadsheet (highlighting complexity, structure and design issues);
- giving insight into the technical knowledge and skill of its author;
- identifying techniques and areas of risk with a given spreadsheet or model; and
- revealing the relative propensity of a spreadsheet to contain errors.
In summary, the health check gives a rigorous assessment of spreadsheet quality. While a poorly built spreadsheet is not necessarily wrong, it is more likely to be error-prone, cumbersome and/or costly to maintain and update. Our health check tool can help identify such issues and allow you to take remedial action.
It is not designed to provide an exhaustive test of a spreadsheet’s logic or integrity, although this is a separate service that we can provide.
How can I access this service?
Please fill out a contact form below, and our team will be in touch.