Question

Write a business report (about 600 words) critically evaluating spreadsheets as a tool for accounting. Use Internet resources. Include a section on the advantages and disadvantages of spreadsheets. Refer to the Internet for advice on Business Report structures.

Answer 1

A spreadsheet is an interactive computer application for organization, analysis and storage of data in tabular form. Spreadsheets are developed as computerized simulations of paper accounting worksheets.The program operates on data entered in cells of a table.

Each cell may contain either numeric or text data, or the results of formulas that automatically calculate and display a value based on the contents of other cells. A spreadsheet may also refer to one such electronic document.Excel is a powerful tool for collecting and manipulating data. In the accounting world, spreadsheets are an everyday tool used to analyze financial data, review exports of inventory, or search for trends of accounts payable invoices.Whether you are a CPA, doing accounting for your business, managing your personal finances, or just keeping track of simple data, the more you know about using Excel, the easier your tasks will seem.

While small business owners and those new to accounting can find it difficult to track payments, spreadsheets offer a simple solution. Spreadsheets are commonly used to analyse money that has been spent and income that has been received. They allow you to split the amount of money you have spent and received by time period and source. For example, you can separate out different types of expenditure such as rent or insurance, and track exactly how much can been spent on these in each month, by using a simple table. In any accounting role, you can benefit from incorporating spreadsheets into everyday tasks. Let’s take a look at how they can support you.

Another benefit of using spreadsheets is that you can link worksheets together. This is useful for things like cash flow, where you need to link the actual balance in the bank at the end of last month to the opening balance for this month. To do this, just press = in the cell that you want to link from, and put the cursor in the cell you want to link to. This works well for budgets too, especially if you have completed a production budget in one worksheet, and this needs to link to the master budget. Then, if the production budget changes, it automatically updates the master budget.

When working with lots of financial data, you’ll want to make it as easy to navigate as possible. Thankfully, most spreadsheet software offers a variety of tools to help you make your spreadsheets visually appealing and easy to understand. For example, you can use Ctrl + B when a cell is selected to make all of the text in that cell bold, which is useful for quickly helping titles and labels to stand out. You might also choose to colour code cells, and then sort your data by colour.

Benefits of Spreadsheets

The facilities of spreadsheets make calculations easier to understand by displaying stages of the development of a sum, with the ability to write notes explaining each line. The grid encasing the cells in the spreadsheet can either be visible or hidden in print outs, enabling reports to be formatted from the display of the spreadsheet. Templates containing the formulas for regularly used spreadsheets increase productivity by removing the need for highly educated operators. Spreadsheets can also interact with databases to populate reference fields, automating almost the entire creation phase of the spreadsheet.

Disadvantages of Spreadsheets

The capabilities of spreadsheets are deskilling. Workers no longer need to have specialist skills, and must compete with cheaper unskilled labor. Individual spreadsheets installed on each of the PCs in an office also enable individuals to hoard data and make their own forecasts without cooperating with colleagues. This phenomenon leads to duplication of both data and effort throughout the organization. The structure of the spreadsheet increases storage requirements over the needs of raw data.