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Pivot tables – are very often not the right answer

“Then we download the data into a spreadsheet, run some pivot tables and finally we can produce the information we need.”

I have often heard this comment, or something like it, and every time I hear it I think – you are doing things wrong.

Quite simply, pivot tables are very often the wrong solution to financial reporting issues.

 

We see two sources of financial information in companies.

  • Some companies record their sales transactions in some kind of operational database which might be bespoke to them or commercially available software. Ideally they  export sales invoice data from this system into their accounting software.
  • Most companies do not have a separate system and they simply record all of their financial data directly in their accounting software

And we see both types of business using pivot tables.

And too often they are wasting time and missing the point.

A world without pivot tables

There are three questions to ask:

  1. What financial information do we need to run the business?
  2. Will our accounting software (or our operational software, if we have it) produce this information at the press of a button?
  3. How do we enter data into our accounting (or operational) system so that we can do the reporting we need to?

If you can not see a way of doing routine data entry that will give you the reports you want then you should change something. Either change the way data entry is done or change your software, or both.

If you find yourself thinking you can get what you want but only by using pivot tables then go back to question 1 and start again!

 

Systems should work in a simple way. You input data, it gets processed and useful information is produced. Over and over and over again.

Pivot tables have a use, but try to see them as a warning that you could be doing things in a better and more simple way.

 

Michael
@michaeljcaustin

 

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