Tools such as Excel and PowerPoint have been shown useful when working on accounting, marketing, and different aspects of operational management. But what about when it comes to your legal entities? As professionals, we rely heavily on Excel spreadsheets to collect and analyze large data sets and PowerPoint to build out makeshift org charts and ownership structures. While these tools are readily available on most of our computers, the question must be asked, are Excel and PowerPoint reliable and practical enough for our most critical company information?
When it comes to entity management, many do not realize the risks they are running when choosing to use these platforms as their primary source for building org charts, storing important data, and sharing entity information. While these tools can be helpful, they tend to cause more problems than they resolve.
It is common to find PowerPoint as an easy tool to create your ownership structures or keep up with entity details in Excel, but what happens once it is time to share this information? Are you having to share a copy and rely on good faith that colleagues or partners will accurately enter new data or make updates without human error? Are you then reporting on these inaccurate numbers or presenting to your board? It is a downward slope when it comes to working on sheets amongst departments and colleagues. Almost 90% of all spreadsheets have errors. Even the most carefully developed and tested spreadsheets have errors in 1 percent of all formula cells.
A good example of this would be TransAlta, a power generator, who lost $24 million due to a cut and paste error in a spreadsheet.
While working out of spreadsheets seems to be the easiest route to take, it often does not suffice in being the most efficient way – especially when it comes to someone’s “fat thumbs.”
On the other hand, PowerPoint gives users the ability to try to organize entity details such as share holds and illustrates ownership structures, but not necessarily in the most organized format. By building organizational charts within PowerPoint, you are opening an opportunity for valuable information to be miscommunicated.
What do we recommend? Get out of Excel and PowerPoint.
Find a solution that can help alleviate many of the pain points you deal with daily while leaving risk out of your company. We understand the challenges that come with managing multiple legal entities, and complex ownership structures can be complicated. While it’s easy to rely on software you have readily available, there is a better way. Removing the risk of losing data, working off inaccurate data sets, or wasting operational expenses can be done with the right solution. We know because we built it.
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References: https://blogs.oracle.com/smb/10-of-the-costliest-spreadsheet-boo-boos-in-history
