ICAEW CEO Alan Vallance points out in 20 Principles for Good Spreadsheet Practice that, despite rapid technological leaps in accountancy, spreadsheets “appear as important as ever.” The very existence of ICAEW’s Excel Community shows how much value Chartered Accountants continue to place in spreadsheet software.

David Benaim, Founder of data services company Xlconsulting, agrees. As a Microsoft Excel Most Valuable Professional (MVP) – in other words, an officially recognised guru who has developed thorough knowledge of the software and regularly tests out new features – he stresses that Excel is “still the tool for accountants”.

“Whenever you’re auditing or looking at someone else’s numbers, it’s important to do some sense checks and make sure that the formulae actually work,” he says. “The best way to do that is through Excel, because it enables us to use the myriad different tools available to get an output that will give us trust in the data.”

For John Tennent, EMEA Regional Director at business acumen learning specialists Corporate Edge, the software provides vital support for making a substantive investment or business decision. “At some stage, an Excel spreadsheet will come into the picture so you can complete the financial evaluation,” he says. “The number in the bottom right corner will help you determine whether you’re making a good or bad choice. Therefore, to underpin your confidence in your own decisions, you should have a savvy knowledge of how Excel produces an output, and what good looks like.”

While Excel is almost 40 years old – it launched in September 1985 – it’s not a moribund relic, says Dr Liam Bastick, Director at financial modelling specialists SumProduct and, like Benaim, an MVP. “It’s kept moving and remains relevant. I remember when it had far fewer rows and columns. Then Microsoft brought in multiple sheets and they’ve continued to introduce new features. There are now more than 540 native functions and it’s always evolving.”

Informed delegation

Tennent cites the release of Google Sheets in 2006 as a major trigger point in Excel’s evolution. “Sheets came into the marketplace quite strongly with some functions that Excel didn’t have,” he says. “That created a sort of ‘beat your neighbour’ principle that ended up accelerating Excel’s development.”

In Tennent’s assessment, newer functions such as Power Query and Power BI give users the scope to handle large datasets in ways they would simply not have been able to on older versions of the software.

“The main reason why professionals should continue to learn about Excel is because its capabilities are getting stronger all the time,” he says. “That ties in with the need for FDs to be really proactive in leading, guiding and coaching their teams towards best practice.”

Tennent notes that FDs must be able to delegate Excel tasks to team members from a position of knowledge. “In other words, ‘There’s a set of functions here that would really help to provide us with some insights on our recent performance – could you build a report using those?’ Rather than, ‘Well, I don’t know what to do – but could you sort it out?’

“If they go down the latter road and aren’t understanding the product for themselves, they risk losing their governance and oversight of how their teams are using the software.”

Symbiotic relationship

Benaim says that many people he speaks to about Excel assume that competence on the product is a ‘one-time trick’; if you learned how to use it in the 1990s, you would be able to make the most of it now.

“Nothing could be further from the truth,” he stresses. “Excel develops so rapidly that tools considered staples by experienced users have been superseded. For example, XLOOKUP beats out VLOOKUP, SWITCH usually beats out nested IF functions and GROUPBY replaces PivotTables for many use cases. Imagine if people only used their mobile phones with features from the 1990s.”

Excel is an essential component of the language that accountants use to secure funding for business projects and growth, says Bastick. In his view, the software enables accountants to quantify the benefits of a particular course of action and guarantee transparency to both internal and external stakeholders. In that sense, he suggests, it’s a symbiotic relationship.

“No matter how Excel evolves, you still need people who are qualified to interpret what it can do,” he says. “I can write some Python code into Excel asking something along the lines of, ‘Can you put together a discounted cash flow for me?’ But the accountant still needs to check that the underlying assumptions are correct. So, the combination of the software’s widening functionality and the accountant’s skillset is what’s really compelling here.”

Bastick’s nod to the Python programming language – which Microsoft made available in Excel last September – hints at how the software’s newest functions are in step with major areas of the tech world’s broader development. That includes artificial intelligence (AI). “AI isn’t going anywhere,” Bastick says. “We have a ChatGPT Copilot in Excel now and accountants must understand what it’s good and not so good at, so they can help CEOs, line managers and group FDs make critical decisions.”

Bastick adds that Excel is bringing Power Query, Python, AI, referential knowledge and other, sophisticated capabilities. “You don’t need to know how those things actually work. But you do need to scrutinise their outputs and be able to interpret them. You must dedicate all the skills and qualifications you use in other areas of accountancy to understanding what the new functions do and stay on top of them.”

Further reading

• For unrivalled, expert guidance on a wide range of different Excel topics, visit the ICAEW Excel Community’s Resources page.