This report provides an insight on the critical evaluation of how Spreadsheets play a significant role in the accounting field, its uses and how a time they can be disadvantageous as well.
Table Of Contents:
· Use of Spreadsheet as an accounting tool
· Dis – advantages of spreadsheet
Spreadsheets play a crucial part in the everyday business operations for both huge and small privately owned businesses. It is a simple accounting tool that is free and user-friendly. (Smith, n.d.)
A spreadsheet is an intuitive PC application for associations that assists in analyzing and storing data. (“Spreadsheet”, n.d.)
Use of Spreadsheet as an accounting tool:
Microsoft Office Excel was intended to help bookkeeping capacities, for example, planning and executing budgeting, explanations and making of monetary records. It accompanies fundamental spreadsheet usefulness and many capacities for performing complex numerical counts. (Doe, n.d)They provide an extensive variety of regular errands, including execution estimation and business planning. For small business investing in an accounting software and maintaining the same will cost them a lot however with the use of spreadsheet their lives are made simple as they aid the business in analyzing the cash flow of the business therefore letting them know the progress of the business. Spreadsheets are known for the range of functions they provide to do different calculations. One simple example can be the use of the lookup function that aids retrieving particular information. They also help with the storage of data. (Barlow, 2016)
Disadvantage of Spreadsheet:
One of the major disadvantages of using spreadsheet is having human errors, as it is impossible to get rid of it. Secondly it is easy to manipulate the data. They do not support large business and finally the end users cannot use spreadsheets to analyse the data, as it is hard for them to understand. (Team, 2012)
Another major disadvantage of using excel for accounting is that not many have the skills of using excel while on the other hand there are high chances of replication of data and due to there is increased errors and incorrect data’s being produced.
The capacity of spreadsheet projects to trade information with different applications improves the benefits of spreadsheets and diminishes the hindrances. Coordination with realistic and word handling bundles enhances the creation of reports and charts, making the figures in the spreadsheet less demanding to clarify. Incorporation with database frameworks lessens the disservices of information accumulating, information excess and arrangement overhead for the capacity of the crude information in the spreadsheet. (Cooper, n.d) On the basis of the above analysis it can be concluded that spreadsheets do play a vital role as an accounting tool for small and medium scale business.