Corporate Spreadsheets Financial Management

Question: Describe about the Corporate Spreadsheets for Financial Management. Answer: In todays world, spreadsheets are used for not only simple calculations but also storing large amounts of data and processing them. Most of the business use spreadsheet and it has become an integrated part of the business world. Spreadsheets have made data crunching easier and help in building various financial and forecasting models for the company to predict their future sales and demand. But in spite of the advantages of the spreadsheet, most of the companies are facing problems due to the fact that most of the spreadsheets contain errors. (Burn, 2015) It has been found that most of the corporate spreadsheets contain errors and most of them are undetected and are hidden behind the thousands of formulae used in a complex excel. The major reason for such high amount of errors is due to bad practices followed while using excel and the user either enters the data incorrectly or careless uses a formula. The impact of such small mistakes can be huge for the companies at times. Recently JP Morgan had registered a loss of 250 million in the year 2013 because of a small spreadsheet error which went unrecognized. Many more instances have occurred in the past which has proved that spreadsheets are fallible and can cause huge losses. (Olshan, 2013) The spreadsheets are important part of business world and it is not possible to do away with them. However, the companies can be more careful while using the spreadsheets to avoid errors. The users must take the responsibility while using the spreadsheet and enter data with more caution. Also there must be a proof read mechanism in place which can help in detecting errors in spreadsheet if any. Thus companies should be more careful while using results obtained from spreadsheets in planning and forecasting. References Burn,R. (2015). Companies could lose billions because of crappy spreadsheets. Retrieved on September 16 2016 from https://www.businessinsider.com/stupid-spreadsheet-mistakes-could-lead-to-corporate-disaster-2015-4?IR=T Olshan,J. (2013). 88% of spreadsheets have errors. Retrieved on September 16 2016 from https://www.marketwatch.com/story/88-of-spreadsheets-have-errors-2013-04-17