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Equity Plan Management and Excel: Why It’s Time To Take A New Approach

By: Jennifer Baehr, CEP - Director, Solutions Engineering

Using spreadsheets for equity plan management can open you up to missed deadlines, data disruption – and even compliance hazards.

If you still use spreadsheets as your main budgeting tool, you’re not alone. Statistics show that are still relying on Microsoft Excel for finance planning.

And that’s not necessarily a bad thing – it’s the ideal tool for many finance tasks. But using spreadsheets for equity plan management and accounting can introduce

In our new white paper, The Seven Risks of Spreadsheets and Three Routes to Eliminate Them, we explore seven risks of handling your equity plan management in Microsoft Excel – and how to overcome them. To give you an idea of why there’s a far better way to manage equity plans, here’s some insight into what can go wrong without the right tools.

Some of them will be familiar – but there may be risks you haven’t yet considered, too.

Compliance hazards

Regulations in finance are a constant source of management headaches – and using Excel is likely making them worse.

There’s no way to automate compliance, so when a new rule comes into force, finance teams have to make adjustments manually. Not only does that introduce a whole extra set of responsibilities, but it also introduces an extra level of risk.

How can you be certain that every spreadsheet you use is up to standard? What if Excel doesn’t provide the level of control and auditing functionalities you need?

Non-compliance doesn’t come cheap, and with Excel, you might be opening yourself up to fines and other sanctions if you can’t meet new regulations.

Data disasters

Protecting data within a business is paramount for every department – and it’s all the more sensitive in finance. But inefficient methods of managing equity plans can put vital information at risk through:

  • Data loss: Finance handles highly confidential data – both for employees and the organization itself – so a lost or stolen device can expose private information. And with most spreadsheets stored locally on employee devices, a broken laptop can risk losing a huge amount of work that might not be backed up elsewhere.
  • Lack of compatibility: Excel sheets are optimized for handling data internally – but that doesn’t always extend to exporting that data. Without an easy way to shift data into a presentable format – such as a PDF – there’ll be a lot of manual effort to make easily digestible reports for employees.
  • Corruptibility: With large spreadsheets that contain a lot of data, there’s little room for error. If a formula breaks, data gets corrupted, or a user inputs the wrong information, the whole dataset in that sheet is at risk – and limited version control and a lack of a central change repository means rollbacks are a major task.

Missed deadlines

There’s no doubt that working in spreadsheets requires major manual effort from finance teams. That can have a significant effect on turnaround times for reports – which can impact the organization in three ways:

  • Long wait times for trading and settlement can affect employee morale and make equity plans feel like a less appealing benefit.
  • The risk of T+2 sanctions if trades can’t be completed within the mandated two-day window.
  • Late filings and non-compliance with regulations can land organizations in trouble with the SEC, FASB and other regulatory bodies.

Overcoming the risks

Even beyond the obvious risks, it’s difficult to predict all the ways that working in spreadsheets can affect your equity plan management and your organization at large – both directly and indirectly. Without a centralized, purpose-built method of managing your organization’s grants, trades, and settlements, you’ll spend a lot of time and effort on an inefficient system.

Many of the risks of working with spreadsheets can be overcome by using a dedicated equity plan management platform – or outsourcing the work to a third-party expert, which is especially useful if you’re working in a small team.

Luckily, there are ways to identify the risks your organization is facing – and ways to tackle them, too. Read our full white paper today to explore seven risks of using spreadsheets for equity plan management, and the three routes available to organizations that want a low-risk, efficient way to take care of these processes.

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