At the end of last year Google added a host of new features to its popular Google Sheets spreadsheet app (part of its cloud productivity suite Google Apps). Are they enough to entice accounting professionals to switch from Microsoft Excel?
First, it’s important to note that Excel is still far more powerful than Google Sheets. Originally a fairly basic product, Google Sheets is narrowing the gap with Excel by including such features as offline editing capabilities, improved function editing and updated conditional formatting. In addition, Google Sheets’ strength has always resided within its collaboration capabilities, which have been improved with the addition of filter views and optional power features called add-ons.
At time of writing, Google Sheets has only 32 add-on features and of those only Vertex42 Template Gallery is somewhat relevant for accountants. It’s not a very useful selection but add-ons are not terribly difficult to write (programming skills are needed). In time entrepreneurial accountants will replicate the useful tools scattered across spreadsheets and servers.
An accounting firm using Google Docs can also distribute their selection of add-ons through a private tab which reduces the number of spreadsheets in circulation.
To be clear, Excel is a robust product with functionality that has been built over many years. However, users tend to engage only a very small portion of Excel’s capabilities on a daily basis. Simple line additions, pivot tables and budgeting are perhaps the most common – tasks which Google Sheets is perfectly capable of handling.
Excel’s ability to perform complex financial modeling and advanced statistical analysis may be out of grasp for Google Sheets, but at this level of financial analysis best practice in modeling becomes important and accountants can use specialised software, such as Quantrix and IBM SPSS. Robust modelling is subject to the runaway effect where complex models become hard to check and understand.
Sequence versus Collaboration
Will accountants and bookkeepers start to shift programs? Not immediately. The issue is less about features and more to do with the way an accounting firm works.
Arguably, the Excel model better fits the way most accounting firms delegate the work. Most accountants work sequentially in their individual roles. There is constant communication between clients, accountants, managers and directors, but only one accountant works on a clearly defined task, which is then reviewed and signed off.
This model is quite different from the real-time collaboration approach advocated by Google Sheets. Imagine an accounting firm where managers are able to see the work in progress as it is being completed and instead of reviewing the work they would be guiding its actual performance (a version of this model can also be seen in Xero where accountant/client relationships are evolving thanks to real-time collaboration). Both models have their benefits and limitations. The uptake of Google Sheets, all things being equal, will be closely correlated with how the performance of work is structured in the accounting firms.
Overall the recent update to Google Sheets is a welcome one, but competition is not centered around functionality as much as around a deeper question of evolving way we do work.
Image credit: GoogleSystem