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How do you manage your hedge program spreadsheets? Any automation and/or software recommendations? What about outsourcing? (Webinar Attendee Question)

This question was asked during the Proformative webinar "Key Elements of a Successful Hedge Program."  A video of the webinar can be viewed here:


Topic Expert
Philippe Gelis
Title: CEO
Company: Kantox
LinkedIn Profile
(CEO, Kantox) |

Hi Kurt,

Using spreadsheets to manage hedge program is very risky. It is easy to make a mistake when filling in data.

It is highly recommandable to have a specific software, usually connected to your treasury software and TMS: FireApps, Reval, etc.

I do not know any case of successfull outsourcing.


Topic Expert
Helen Kane
Title: President
Company: Hedge Trackers, LLC
(President, Hedge Trackers, LLC) |

Software exists where exposures can be recorded (centrally or remotely), consolidated, and traded. The software then provides trade management and accounting (provides designation documentation, effectiveness testing, special hedge accounting journal entries) as well as SEC required quantitative reporting. Consulting firms also offer the accounting and reporting services on an outsourced basis, prepared by experienced derivative accountants.

Mark Kirsch
Title: Vice President of Treasury
Company: ContourGlobal
(Vice President of Treasury, ContourGlobal) |


Using spreadsheets for your hedging program is a huge mistake. Depending on the accounting treatment sought, all documentation and calculations are going to be reviewed by internal and external auditors. Your auditors are going to want third-party valuation for your contracts. I recommend using Reval. It is a comprehensive solution.

Tom Scott
Title: Principal Consultant
Company: Jerts Consulting & Services
(Principal Consultant, Jerts Consulting & Services) |

What are you looking to accomplish by "managing" your hedge program spreadsheets Kurt?

There are spreadsheet management applications that can do spreadsheet search, inventory and monitoring. Typically they also provide access control, version control and change tracking functionality. Some have auditing, risk assessment and compliance functionality. Examples include ClusterSeven ESM, Prodiance and Cimcon.

Access control, version control and change tracking can also be accomplished by configuring content/document management systems such as Sharepoint or Subversion.

If you're looking to improve the quality (robustness, functionality, usability and risk-minimization) of the spreadsheets, there are excellent resources on the web (, or you could hire a spreadsheet risk consultant, such as myself, to review your spreadsheets and improve the quality.

Brian Buckley
Title: Sales Manager, Corporate Segment
Company: FINCAD
(Sales Manager, Corporate Segment, FINCAD) |

I’ve worked with a number of companies on their hedge accounting processes and I’ve found four challenges typically come up again and again as by far the most troubling. The operational risk associated with spreadsheets is typically number one or two. In a study published in the Journal of Organizational and End User Computing in July 2009, of 50 spreadsheets that were assessed for six different types of errors, 86% of the workbooks evaluated were found to have a total of 281 instances involving a total of 2,353 cells that led to wrong results.

Sam Parikh
Title: Sales Director
Company: Incisive
(Sales Director, Incisive) |


There is definitely a lot of risk using spreadsheets for any type of financial process, especially when it has to do with some level of key financials / calculations. But, in many cases, using spreadsheets is the easiest, not to mention least expensive way to run these processes. Furthermore, the flexibility that Excel provides makes it simple to be able to track different figures and calculations as your processes evolve.

As stated in previous threads, the main risk with Excel is obviously the lack of controls, and the inability to look for potential errors or cells that are open to the risk of errors. There are products on the market that look to address these issues by identifying them, but a majority of them rare not intuitive, and can't do what is needed to efficiently analyze the spreadsheet and point out the key areas of risk. But, Incisive has come up with a solution called Xcellerator, which is rapidly becoming the standard for finding these potential issues and inefficiencies, using a very simple approach. The solution is quite simple, but the power of its analysis is really quite robust.

Please reach out to me if you would like to discuss how Incisive has helped in the accounting space for various Alternative Investment firms.

Jono Tunney
Title: Director
Company: Atlas Risk Advisory LTD
(Director, Atlas Risk Advisory LTD) |

I can speak first hand as to the dangers of using spreadsheets to manage risk. As the manager of our FX group, I personally presided over a $2b trading error while working at a large multinational corporation. This event led us to develop a software infrastructure to support the automation of many of the process that were previously relied on by spreadsheets. We currently market this tool under the 'AtlasFX' brand. Happy to give you a demonstration. Looks like mostly vendors on this thread however.

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