Whether you’re about to start CPA exam preparation or have recently passed all the exams, before embarking on your accounting career you should brush up on your spreadsheet skills. In an era of sophisticated proprietary accounting software, many companies still rely upon spreadsheets.
According to a study of 262 financial executives conducted by the Financial Executives Research Foundation and Robert Half, 64 percent of US companies use spreadsheets to perform their finance functions. The figure is 74 percent for companies with annual revenue of less than $100 million.
Tracking financial information on spreadsheets is the most popular accounting system for small companies. Microsoft’s Excel program remains the most dominant spreadsheet platform. Even if a bookkeeping service has separate accounting records for a small company, these are often cash basis. Using your knowledge from CPA exam study to create accrual basis statements demands obtaining data from spreadsheets. That’s where you find details about such elements as sales and payables.
Heavy use of spreadsheets is usually the situation for startup companies. As they grow, sticking with this format is just easier than switching to accounting software. At some point, that arrangement is no longer feasible. Companies need financial data in standardized formats when obtaining outside capital, requesting large credit lines with suppliers, or bidding on government contracts. In some cases, a growing firm simply spends too much time and manpower on financial reporting when it lacks automated accounting systems.
When manual spreadsheets are no longer sufficient, a CPA is called upon for assistance. The challenge is creating financial reports according to formats found in CPA review material. That task is much easier to tackle when you are an Excel wizard.
Your initial challenge with financial data on spreadsheets is assuring accuracy. The company may not want you to conduct an audit, but at least the main values on various sheets should match. When a mismatch arises, you must locate the correct figure and then adjust the spreadsheets. You end up performing double duty by deploying knowledge from a CPA course along with Excel skills.
After the correct numbers are ascertained, the next step is data transfer from spreadsheets to accounting software. Depending upon the platform selected by the company, this stage encounters various levels of difficulty. Systems that are more difficult to implement cause some pain for the companies. Your function during this transition away from Excel is assuring that financial statements comply with standards from CPA study. Upon completion, the new system should achieve the goal of easing the company’s finance function for delivering accurate accounting reports.
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