I spend a fair amount of my time (in fact rather too much of it) designing financial models and forecasts for my clients. I use bespoke modelling software and I maintain a strict control over who gets access to it – especially among the “C Suite” – In my experience it’s the Directors and senior managers who will endlessly tinker with things (is that the sound of an evaporating client base I can hear in the distance?).

I mentioned to a prospective client only yesterday that I regard excel spreadsheets as one of the most dangerous weapons on the planet. Without wishing to belittle the devastating suffering caused by those who trade in arms – or indeed those who choose to help making them – it’s probably a good time of year to have a look at some of the horrors that a badly controlled spreadsheet can cause.

You’ll see from the link that there are some world class organisations referenced in the publication. If they are capable of messing up on such a scale it might be a good idea to accept that you could too.

I am constantly suspicious of advisors who tell me they have modelled a company’s P&L, balance sheet and cash flow using excel spreadsheets, often collecting data via hotlinks from a multitude of users in the organisation. It may be an exercise in cleverness, but it’s nothing more than dangerous hubris. I would bet that the integrity has been compromised somewhere.

Did you know there was such a body as the European Spreadsheet Risks Interest Group? you do now. www.eusprig.org – they have some interesting tales to tell on their website, so have a look.

But for sheer entertainment, have a look at this link to a publication produced by the modelling organisation F1F9. It might make you chuckle – but you should think about how you control spreadsheets within your own organisation. You may need to copy and paste the link into your browser.

http://info.f1f9.com/dirty-dozen-12-financial-modelling-horror-stories-ebook

Happy Halloween to spreadsheet enthusiasts everywhere.