Your Spreadsheet Is Not the Problem. Your Spreadsheet Dependency Is.

I am an accountant by background, so let me say this clearly at the start: I like spreadsheets.

In fact, my working life started in the 1980s, last century, before spreadsheets were as familiar as they are today. I began with paper, calculators, and manual calculations. Then came VisiCalc. Then Lotus 1-2-3. Then Excel. And now, of course, Google Sheets.

So when I talk about spreadsheets, I am not talking about some abstract tool that finance teams happen to use. I am talking about something that has shaped the way accountants, analysts, managers, and business leaders have worked for decades.

Spreadsheets have helped us model ideas, test assumptions, reconcile numbers, build forecasts, challenge plans, and understand what is really happening inside a business.

So this is not an argument against spreadsheets.

Quite the opposite.

Spreadsheets are one of the most useful business tools ever created.

The problem starts when the spreadsheet stops being a tool and quietly becomes the system.

That is when a useful spreadsheet becomes a hidden dependency.

And hidden dependency is where the real risk begins.

In many organisations, spreadsheets sit quietly behind critical business processes. They support the month-end close. They hold reconciliations. They track approvals. They explain exceptions. They bridge gaps between systems. They create management reports. They maintain forecasts. They hold logic that only one or two people fully understand.

On the surface, everything still appears to work.

The month closes. Reports are issued. Managers receive their numbers. Customers are invoiced. Suppliers are paid. Board packs are prepared. Decisions are made.

But underneath that apparent normality, too much can depend on manual effort, copied formulas, version control, email attachments, personal memory, and people who know which file is the right one.

That is not a spreadsheet problem.

That is an operating risk.

The difficulty is that spreadsheet dependency usually grows gradually. It rarely begins with a bad decision.

A team needs a report that the system cannot easily produce, so someone exports the data and builds it manually.

A workflow does not quite match the approval process, so a spreadsheet is created to track it.

A reconciliation is needed between two systems, so finance builds a file.

A manager wants a slightly different view, so another tab is added.

The business changes, the system does not keep up, and the finance team adapts.

At first, this is practical. Often, it is necessary.

Finance people are problem solvers. They find a way. They close the gap. They get the numbers out. They protect the business from delay.

That deserves respect.

But over time, the workaround can become the workflow. The temporary file becomes permanent. The person who built it becomes indispensable. The formula logic becomes harder to challenge. The process keeps running because people have become very good at compensating for its weaknesses.

That is where leaders need to pay attention.

Here are seven hidden costs that spreadsheet dependency can create.

1. Time gets trapped in manual preparation

When important processes depend too heavily on spreadsheets, skilled people spend too much time preparing data that should already be available.

They export.

They copy.

They paste.

They clean.

They reconcile.

They check.

They adjust.

They explain.

Some of this work may always be necessary. But when it becomes the regular operating model, the organisation has a problem. The issue is not just the time spent. It is the opportunity cost of what finance people are not doing while they are maintaining manual workarounds.

2. Confidence weakens when numbers need too much explanation

There is a big difference between explaining what a number means and explaining why two numbers do not match.

One creates insight.

The other reveals doubt.

When leaders constantly need reassurance that the latest file was used, the formula was correct, the data was complete, or the report matches another report, confidence weakens.

The organisation may still get to the right answer eventually, but eventually is not good enough when decisions need to be made quickly.

3. Control becomes harder to evidence

Spreadsheets can be controlled, but they are often not controlled well enough for the role they end up playing.

If a spreadsheet is supporting a critical process, leaders should be asking:

Who owns it?

Who can edit it?

Who reviews it?

Who approves changes?

Where is the audit trail?

How do we know the logic is still correct?

How do we know the latest version is being used?

If the answers are unclear, the spreadsheet may be carrying more responsibility than the control environment can support.

4. Version confusion creates avoidable doubt

Anyone who has worked in finance knows this problem.

There is the original file.

Then the updated file.

Then the final file.

Then the final final file.

Then the version that was sent to the management team.

Then the version with one adjustment.

Then the version someone saved locally because they were travelling.

Then the version that nobody should use, but someone inevitably does.

This is not just irritating. It creates avoidable doubt. And when leaders are not sure whether they are looking at the right version of the truth, the quality of the conversation suffers.

5. Key-person dependency increases

One of the clearest warning signs is when people say:

“Ask Sarah. She understands that file.”

Or:

“Don’t change that formula. James built it.”

Or:

“We need to wait until Maria is back because she knows how the reconciliation works.”

That may sound normal, but it is a risk.

When a process depends on one person’s memory, judgement, file structure, formula logic, or workaround, the organisation is more fragile than it appears.

Good people should be valued. They should not become single points of failure.

6. Finance becomes a repair function instead of an insight function

Finance teams should help the business understand performance, risk, trends, options, and decisions.

But when spreadsheet dependency becomes excessive, finance gets pulled into repair work.

Fixing data.

Chasing numbers.

Reconciling inconsistencies.

Explaining timing differences.

Manually preparing reports.

Finding errors.

Checking what should already be reliable.

That is not where finance creates its highest value.

The future finance team cannot simply be the team that knows where all the files are. It needs to be the team that helps the business see clearly, decide faster, manage risk better, and act with confidence.

7. Leadership conversations shift from meaning to accuracy

This may be the highest cost of all.

Instead of asking, “What does this number mean?” leaders end up asking, “Is this the right number?”

Those are very different conversations.

One moves the business forward.

The other keeps the business stuck in verification mode.

Of course, accuracy matters. It matters enormously. But when too much leadership time is spent trying to establish whether the numbers can be trusted, there is less time left to discuss what should be done.

That is a poor use of leadership attention.

This matters even more now because finance is changing.

Finance teams are no longer expected only to record what happened. They are expected to help the business understand what is happening, what might happen next, and what should be done about it.

That requires reliable data.

It requires cleaner workflows.

It requires integrated systems.

It requires faster reporting.

It requires better visibility.

It requires appropriate automation.

It requires finance people to spend less time assembling the truth and more time interpreting it.

AI will make this even more important.

AI will undoubtedly change the way we use spreadsheets, reporting, forecasting, analytics, and financial data. It will help people analyse, summarise, model, and perhaps even build spreadsheet logic faster.

But AI does not remove the need for clean data, clear ownership, reliable processes, and proper controls.

If anything, it raises the stakes.

If an organisation already has messy processes, unclear ownership, weak data discipline, and too many hidden spreadsheet dependencies, AI may not create clarity. It may simply help people create confusion faster.

That is a story for another letter, but it is already part of the same leadership challenge.

The question for CEOs and finance leaders is therefore not whether the organisation should still use spreadsheets.

Of course it should.

The better question is this:

Where have we become dependent on spreadsheets when the business now needs stronger structure, control, automation, integration, or visibility?

That question changes the conversation.

Some spreadsheets are harmless. Some are helpful. Some are essential working tools. But some are warning signs.

A spreadsheet that helps someone model a scenario is useful.

A spreadsheet that supports analysis is useful.

A spreadsheet that helps leaders explore a decision is useful.

But a spreadsheet that acts as the only reliable source of truth for a critical process is fragile.

A spreadsheet that replaces proper workflow is fragile.

A spreadsheet that only one person understands is fragile.

A spreadsheet that carries approval, reconciliation, reporting, and control logic without proper visibility is fragile.

The issue is not the file itself. The issue is the dependency around it.

Technology plays an important role here, but technology is not the whole answer.

Cloud platforms, financial management systems, workflow tools, reporting platforms, analytics, and automation are not valuable simply because they are modern. They are valuable when they remove unnecessary dependency, reduce rework, strengthen control, improve visibility, and free people to do more valuable work.

Implemented well, they help finance teams move from manual rescue to structured reliability.

Implemented poorly, they simply create new workarounds in a more expensive environment.

That is why this is also a leadership issue.

Leaders need to understand where the organisation relies too heavily on hidden effort. They need to ask which processes depend on a single person, a single file, a single manual reconciliation, a single workaround, or an unofficial version of the truth.

They need to ask whether their finance teams are spending their best energy on insight or repair.

They need to ask whether the business has accepted avoidable friction simply because people have become good at coping with it.

Coping is not the same as improving.

And heroics are not the same as resilience.

A business is not stronger because a few people can rescue broken processes every month. It is stronger when those processes no longer need rescuing.

At TRG, we have seen this pattern many times.

The starting point may be financial management, reporting, cloud, SaaS, invoice automation, performance management, integration, or analytics. But underneath the technology conversation, the real question is often broader:

How do we help the business become less dependent on manual effort and more confident in how work gets done?

That is the conversation worth having.

So yes, keep using spreadsheets.

Use Excel. Use Google Sheets. Use them to think, model, test, explore, challenge, and decide.

But do not let them quietly become the foundation of processes that should be structured, controlled, automated, integrated, and visible.

Your spreadsheet is not the problem.

Your spreadsheet dependency is.

And once leaders can see that dependency clearly, they can start building finance functions that are faster, stronger, more reliable, and far more valuable to the business.

Cheers,