Microsoft Excel celebrates 40 years as a mainstay for SMEs

Microsoft Excel marks 40 years of use with new research showing continued high uptake among SME finance professionals and discussion among industry leaders on its ongoing role in business.

When Excel was launched in 1985, it offered small and medium-sized enterprises new scope for financial reporting, data analysis and management. Estimates indicate monthly users today range from 750 million to 1.2 billion, with the program remaining a staple for finance functions despite the advance of cloud-based automation and artificial intelligence.

Recent research commissioned by iplicit, surveying 250 UK midmarket finance leaders, found that 88% view AI as a way to enhance, rather than replace, spreadsheet tools such as Excel. Further, 92% believe AI will make their teams more efficient and effective users of the software.

Familiarity and utility

Robin Fitzpatrick, Director at 4GL Concepts, commented on Excel's impact, stating:

"Excel has been central for SMEs over the years. It has given them the ability to manage numbers, track performance, and build reports without needing big, expensive systems. A lot of businesses still turn to Excel because their accounting packages do not give them much flexibility when it comes to management reporting, so Excel ends up being the only practical option. It has become the tool people instinctively reach for, whether it is reporting, forecasting or just making sense of day-to-day data."

Fitzpatrick added, "Excel is still brilliant where flexibility and speed matter. If you need to knock up a report, run a scenario, or get some quick insights, it's hard to beat. It's also the go to for data migration, most software vendors now provide readymade Excel templates for moving data into their systems, so SMEs naturally fall back on it."

David Lindores, Chief Executive Officer of Eureka Solutions, described Excel as "the bridge between paper-based systems and more sophisticated accounting or ERP software" for many SMEs over the years.

Challenges and limitations

Paula Cooper, Head of Channel at iplicit, said: "On one hand, there is a comfort for finance teams that if a piece of software has a functionality gap, that can be overcome by Excel."

"But on the flipside, it has the potential to stunt SME growth. As SMEs expand, they need to improve processes and procedures, yet sadly, too many have restricted this growth by relying heavily on a tool that can easily act as a single point of failure. This over-reliance often stems from its familiarity and resistance from leadership to modernise."

Lindores noted: "Excel also has its limits - particularly if it's used as a core system for operational processes like month-end, order processing, or invoice approvals. That's where we see challenges: version control issues, data errors, time-consuming manual consolidation, and a lack of real-time visibility."

Fitzpatrick also provided insights on Excel's shortfalls: "Once datasets get too big, or when multiple people are working on the same file, things can get messy. Errors creep in, version control becomes a headache and integrating it properly with other systems is always a challenge. So, while it is fantastic as a flexible tool, it is not always the best long-term solution as a business grows."

The evolving role of Excel

Cooper added her perspective on Excel's future configuration within finance teams: "I think within today's tech landscape, when used with other tools in a modern, cloud-based portfolio, Excel still continue to play an important role for SME finance teams. For less tech-confident users and as a time saver for FD's and senior managers looking to produce their reports in a tried and tested manner, it fits the bill. I believe there will be a place for it for years to come."

Lindores commented: "I think that Excel's role will become more complementary. It'll continue as a front-end analysis and modelling tool, but with data flowing from modern, cloud-based systems automatically and pretty much eradicating the need for manual updates and reconciliations. Cloud ERP, accounting platforms and integration platforms allow SMEs to automate data flows between systems, which means Excel should be used for insight, not administration."

Fitzpatrick agreed: "I do not see Excel disappearing any time soon, it is too ingrained. But I do think its role will shift. More and more, it will sit alongside cloud platforms rather than being the main system people rely on."

According to the research, while SME finance teams do not intend to stop using Excel in the near future, they recognise the value of automation with 34% predicting AI and automation will reduce the manual work associated with spreadsheets over the next five years.

Fitzpatrick observed: "AI is going to change the game when it comes to Excel. Tasks like data migration and even some reporting - tasks that currently lean heavily on Excel - will end up being automated, some are already there. I would think that AI will be able to clean, map and move data, or pull together reports without the manual effort. Excel will still be a handy front end for ad-hoc work and analysis, but the heavy lifting will move elsewhere."

Advice from industry leaders

On the future balance between Excel and integrated tech solutions, Fitzpatrick advised: "I would say continue to make the most of what Excel does well - custom reporting, data analysis and migrations - but keep an eye on what today's modern accounting applications are doing and be prepared to start letting the systems you invest in start to do more of the heavy lifting. Especially if you find yourself spending too much time reconciling spreadsheets, that's a sign it's time to look at more automated, integrated solutions. Keep Excel for quick wins and flexibility but lean on cloud or BI tools for the heavy lifting, collaboration, and accuracy."

Lindores added: "Keep using Excel for what it does best - analysis, quick calculations and modelling - but don't rely on it to do heavy lifting or to run your core processes. Invest in cloud-based systems that automate repetitive tasks like transaction posting, bank reconciliation, or order entry, and use integration platforms to connect those systems together. By doing this, you remove the risks of human error, speed up reporting cycles, and free your finance team to focus on strategy rather than spreadsheet maintenance."

Cooper said: "Don't rush to replace Excel. Instead, integrate it into your finance tech stack as best you can, and make it as error-free as possible. Harness the power of new, cloud-based systems that can automatically populate and refresh your spreadsheets without manual intervention and risk of error. And in time, look to enhance its capabilities with additional tools, whether that be layers of automation or integrations with the likes of FP&A tools. I believe that for the foreseeable, the mix of generations and staff skills within today's finance teams will help elongate Excel's value and keep it relevant within the finance tech stack. And by embracing it alongside new tech, adopting new systems becomes less of a daunting experience - adding components of tried and tested familiarity while harnessing the latest cutting-edge tech."