Efficient Practices With Excel Templates

by David Toohey of The Accountants Circle
This is something I'm still often surprised at. As an accountant advising a client, wouldn't you often recommend introducing or improving processes, minimising costs, introducing quality control and all those other simple yet wonderful bits of advice that can be rattled off for most businesses?

Why is it so many of us don't consider this advice ourselves? This is why I am a little surprised. We clearly understand that operating a more profitable business includes improving efficiency and reducing costs yet we are spending... let me rephrase that - wasting - wasting lots of time on Excel spreadsheets and formula in a highly inefficient manner.

There are a few options to consider, all of these can reduce your costs and enable your spreadsheets to be used much more efficiently than they probably are now.

Starting with specific solutions, these can be outsourced to specialists such as Glen Feechan, to address your needs in a formal planned manner and developing a spreadsheet that will reduce your future time needed on the task, minimising or removing errors, and improving the output and information made available.

The next option can be training to develop such methods yourself, and can prove quite advantageous. When you look at the ongoing time wasted and possible errors the costs of these can be quickly and greatly reduced by learning and understanding the principles behind efficient spreadsheet practices.

The third obvious option is the use of existing templates. This is something I'll discuss in a little more depth as it's the area I'm involved in. Many accountants use existing Excel templates. A lot of templates are freely available and usually with a little tweaking and extra development yourself, are up to small jobs you require.

Again the issue we are discussing here is efficient practises with templates, so if you do grab a template the efficiency can be reduced by your changes if you're not making the spreadsheet do the work for you.

One thing we consider with Excel templates and their efficiency is the 'rules' applied to reduce errors. From the very beginning, formula should minimise errors where possible. Include rounding, allow for picking up empty cells... whatever it is the formula deals with should be considered and covered. Variables should also be removed from within formula. Anything that means formula needs to be changed, is usually best included as a separate input.

Those are some of the simple ways for your spreadsheets to starting working more efficiently for you. Most and possibly all processes you do routinely in your spreadsheet work can be automated. Excel's real power is rarely used by most, but most of us are using Excel and continuing to use it poorly.

So when might a general template be the option for you?

Almost always, a template will suffice for performing standard calculations and producing schedules such as for loans, hire purchases, tax calculations and so on. There are also some templates available, such as our Financial Management Reporting System or Budget and Projection System that are also flexible enough to use for most small-medium sized client needs.

Take for example our Financial Management Reporting System, used by several accountancy practices for producing consistent and professional client management accounts. For those needing management accounts presented in a specific manner or including departmental reporting, a general template such as this may not be the solution for you so a tailored solution or training yourself or your team in creating efficient and effective templates for your needs are possibly the better options to consider.

Though if your needs are more general and the management accounts you produce regularly are like those of most small-medium sized businesses, then an efficient and flexible template such as this could well be an option to consider and let's face it, a more profitable way of producing reports.

This goes for any work you do in Excel, not just the management accounts. The ways you can save time, time that can be better spent with clients, growing your business and providing your services are much the same with most templates.

Now taking a look at how this template reduces your time spent. Regular tasks such as switching to another period become a simply click, then select the month/quarter and the rest is done. Also switching the format from monthly reports to quarterly reports (eg. for monthly reports throughout the year, and a quarterly set for the year at the end) is just a click too. This is done just be investing time once only into how Excel deals with the input figures, a simple trial balance and then automates the changes depending on your chosen settings. All you need to do is provide the information of the actual changes, and with minimal effort.

And having flexible templates? We've done it with this one by separating the management accounts reporting from the trial balance. By distinguishing differences you can set the reports to show how you like, regardless of the chart of accounts as the two are kept separate. By keeping in mind how an Excel template is to be used and the different ways you might like it to work, you can develop it to make changes quickly.

All of this does take time, but when looking at the repetitive work we do and adding up the time that's really wasted in manually adjusting templates, formula, dates and more on a regular basis - it's really not long before the time being saved far outweighs the time invested in efficient templates.

This is a core aspect of how we operate at The Accountants Circle. We develop flexible templates for the needs of practice to ensure more profitable delivery of consistent and accurate services. Most practices have similar template needs, as much the same services are provided from practice to practice. With small membership contributions combined, we have a development team to provide and adapt templates to work efficiently for your general accounting and bookkeeping needs. Another option to help you work more efficiently, and more profitably.

David Toohey is a part of The Accountants Circle's team, supporting UK accountants and bookkeepers. David can also be reached at david.toohey@accountantscircle.co.uk.