A spreadsheet update: the battle of the spreadsheets intensifies.

A SPREADSHEET UPDATE

The battle of the spreadsheets intensifies.

Spreadsheet software in many ways has defined the microcomputer industry for accountants. In all likelihood, microcomputers would have conquered the accounting environment without spreadsheet software, but it would have happened at a slower and more uneven pace. Spreadsheets represent the essential component of an accountant's microcomputer tool kit.

Furthermore, spreadsheet software is still dominated by a single program--Lotus 1-2-3. In fact, customers remaining true to the standard set by Lotus have kept competitors at bay regardless of the quality of their products.

However, times are changing. A number of powerful spreadsheet packages have been developed that are threatening to redefine the spreadsheet marketplace. In addition, Lotus recently introduced two new spreadsheet releases, versions 3.0 and 2.2. The salvos of the spreadsheet wars have been fired.

This war is being fought on two fronts. Next-generation spreadsheet software packages, such as Lotus version 3.0, Microsoft Excel, SuperCalc 5 and Quattro Pro, are vying for market share in the power user category. On the other hand, Lotus version 2.2, Lucid 3-D and clones of Lotus version 2.01 are competing for spreadsheet users who do not necessarily want every feature possible.

How should accounting professionals react to these new products? Should they continue to use their old tried-and-true Lotus, or should they update to one of the newer Lotus releases, or would another product serve their needs better? Accountants should not immediately assume they need the most powerful spreadsheet they can get their hands on. Only after an analysis of the features of alternative spreadsheet packages should a software selection be made. This article is designed to aid in that selection process.

NEW SPREADSHEET FEATURES

Next-generation spreadsheets offer improvements or innovations in five areas:

* Three-dimensional spreadsheets.

* Graphics.

* Database support.

* Spreadsheet auditing.

* Macros.

New features in other areas are minor but they do add convenience to the spreadsheet application. The exhibit lists the features of the spreadsheets reviewed.

Three-dimensional spreadsheets. The ability to generate electronic spreadsheets that can be stacked on top of each other appears to be the most valuable new feature because it enables CPAs to use the spreadsheet as they would workpapers. The traditional workpaper file has individual workpapers that refer to other workpapers and present summarized information in the topmost workpapers. CPAs review and analyze information in such files simply by thumbing through the files' pages. The 3-D feature supports the traditional file design while also offering the ability to link external files. Two important features of 3-D spreadsheets include

* Page mode, which allows a single spreadsheet file to contain multiple pages, with each page as a fresh spreadsheet.

* External file linking, which allows a master spreadsheet to refer to spreadsheets in different files and to use values from these files in formulas in the master spreadsheet.

The 3-D feature requires multiple windows on the computer screen. The additional windows are used to view different spreadsheets or different pages or parts of the same spreadsheet.

Enhanced graphics capabilities. Next-generation spreadsheets offer enhanced graphics capabilities such as

* More variety in area, bar, column, line and pie graphs.

* More customizing features such as explanatory text with reference arrows, expanded legends and various background colors and patterns.

* Multiple type sizes and styles.

* The ability to print graphs without exiting the spreadsheet.

With an additional enhancement--windows --the user can change values in a spreadsheet and watch the effects in a graph at the same time.

Spreadsheet database capabilities. A large number of accounting and audit functions involve file manipulation, which consists of extracting records from files and combining them into a new file. Next-generation spreadsheets support file manipulation by providing strong database capabilities. Potentially the strongest feature is the ability to read and write files created by specific database programs, such as dBase III. Next-generation spreadsheets also offer multilevel sorting (that is, sorting sales records by sales territory, by salesperson, by invoice number) and the ability to connect two independent data tables and extract information from the combined table. Further, a forms entry device is available that reduces input errors.

Improved audit capabilities. While spreadsheet software has brought accountants enormous computational power, a serious problem of the software is the inability to ensure that results of spreadsheet models are valid. Next-generation software addresses this problem by offering specific audit capabilities. These audit features do things such as

* Indicate which formulas depend on the cell the user is currently pointing to.

* Highlight formulas that refer to blank cells or cells that have changed since the last spreadsheet calculation.

* Provide a schematic, called a map, indicating where cells containing formulas and labels are located.

* Add notes (annotate) to cells with formulas in them for documentation purposes.

If the auditing features indicate a problem, a find and replace command can be used to change any cells in a spreadsheet containing the problem.

Improved macro capabilities. Macros offer users the ability to perform numerous spreadsheet functions with several simple keystrokes. They represent an internal programming language built into higher-level spreadsheets.

Macros are not new. However, several twists are appearing on next-generation spreadsheets.

* A macro recorder can be used to enter the spreadsheet user's actions directly into a macro. After a set of commands is performed, the program remembers the commands and automatically puts them into a macro for future use.

* A macro library allows a group of macros to be stored in a separate spreadsheet file, which can be used to work with any number of spreadsheets.

Other features. Other spreadsheet innovations are not easily classified. These features include

* Minimal recalculation as well as background recalculation.

* Undo commands.

* User-defined functions.

* Autosave capabilities.

Minimal recalculation means only the cells that change are recalculated, which saves valuable processing time. Background recalculation allows the user to work while cells are being recalculated; it is very effective when combined with minimal recalculation. The undo command simply undoes the last command entered--a very useful tool. Most spreadsheets have predefined formulas referred to as functions. User-defined functions allow formulas to be saved and used repeatedly. Autosave allows the user to set a timer that periodically saves spreadsheet data automatically on a disk.

The following sections review the features of the power spreadsheets as well as the lower-powered ones.

POWER SPREADSHEETS

The power spreadsheets reviewed here are

* Lotus 1-2-3 version 3.0.

* Microsoft Excel.

* SuperCalc 5.

* Quattro Pro.

Lotus 1-2-3 version 3.0. This new spreadsheet represents a significant upgrade from Lotus version 2.01. However, power has its price. Lotus version 3.0 requires an IBM AT class microcomputer (80286 microprocessor) or a machine powered by an 80386 microprocessor. This means the program will not run on IBM PCs and XTs or their clones. In addition to a higher-powered microcomputer, Lotus version 3.0 also requires a megabyte of random access memory (RAM)--about twice as much memory as most PCs and XTs have.

However, the user who already has Lotus software and a microcomputer with the capacity to run version 3.0 probably will want it. Why? It supports all the version 2.01 commands, has the same characteristics earlier Lotus versions have and offers an impressive array of new capabilities.

Version 3.0 is 3-D. Multiple pages are allowed in a single worksheet file; since all pages are in the same worksheet, the formulas, functions and copying are implemented as they are in older Lotus versions, with the sole exception being that a page letter must precede cell references. The 3-D function also extends to individual files, which can be linked to one another by preceding cell references with the appropriate spreadsheet file name and page number.

Graphics capabilities also are improved. More types of graphs are available and windows allow simultaneous viewing of data and graphs. Printing can be done within the Lotus spreadsheet program; a separate printgraph disk is not needed. Furthermore, a graph can be printed along with spreadsheet text and numbers in a single print session. While printing capabilities are much improved under version 3.0, they are not as powerful as the Allways add-in module for printing, which Lotus should have available soon for version 3.0.

Version 3.0 has expanded database capabilities. An important enhancement permits the direct reading and writing of dBase III files (other database files will certainly follow). This feature allows seamless access to pure database files. The other major database enhancement is the ability to join tables and use a single query to extract data from them.

Version 3.0 offers new spreadsheet auditing features that permit the user to annotate cells with formulas as well as present a map view of cells that shows those with formulas and those with labels. In addition to a group of new macro commands, version 3.0 also contains a macro recorder and a macro library file.

Microsoft Excel. Excel controls 14% of the DOS spreadsheet market, second only to Lotus 1-2-3. First introduced for Apple's Macintosh computers, Excel operates in the graphical environment of Windows. In fact, Excel on the PC is very much like the Macintosh product, right down to the use of a mouse. It requires an 80286 or 80386 microcomputer, expanded memory for spreadsheets of any size, hard disk and a color-graphics monitor. However, if CPAs have the hardware, Excel is an extremely impressive product.

Excel allows the user to choose from a variety of fonts and colors. The user can even turn off the row and column grid, showing only labels and numbers on the screen. This is all performed with Macintosh-style pull-down menus, an interface made to use with a mouse. While command key combinations can take the place of a mouse, users will find the mouse faster and easier for most commands.

Excel limits each spreadsheet to one page and implements its 3-D feature through external file referencing. However, Excel supports loading multiple spreadsheets into memory, establishing links by using a cursor as well as maintaining a list of related spreadsheets.

Excel offers very good graphics capabilities. Not only are there over 40 variants of standard graphs, but the graph feature is extremely easy to use. When the user highlights data with row and column labels, the labels automatically become axis titles and the numbers are converted into graphs. Printing capabilities to go with the on-screen graphics are also topnotch. In fact, with a laser printer and the appropriate fonts, Excel can print a perfect copy of a form 1040.

The database function is straightforward and similar to that in Lotus version 2.01, with the important addition of a data form option for generating standardized data input screens. Excel's auditing capabilities are impressive. The user can attach notes to a cell explaining the logic of a formula, highlight all cells that depend on a certain reference and check for inconsistent formulas in a range. Of course, Excel's find and replace command works on labels and formulas, so if the user finds a consistent error, fixing it is no problem.

Excel's macro language is believed to be the most powerful available in the DOS environment. In fact, the macro language can be used to modify some of the screens of Excel's interface. In addition to this, a macro recorder is standard fare, as well as a macro library file.

The main difference between Lotus version 3.0 and Excel is not power or features; they are both feature-laden programs. Rather, the difference is the way they appear on the screen. In addition, Excel is highly customizable, uses a mouse and operates within a graphical interface. On the other hand, Lotus is a good keyboard-character-based program.

In this review, the main advantage of Excel was the ease of use of such a large and feature-rich program. As applications become more sophisticated, they must remain easy to use or the sophistication is wasted. This is Excel's forte.

SuperCalc 5. SuperCalc's market position and price suggest it is a power spreadsheet, but it does not have as many features as either Lotus version 3.0 or Excel. On the other hand, SuperCalc can run on a standard IBM PC or a clone with a hard disk. As such, it is a next-generation spreadsheet that can use past-generation hardware.

SuperCalc offers 3-D capabilities that are very similar to Lotus version 3.0. It has both a page mode and external file linking features. SuperCalc's graphics are easy to use and can be printed without exiting the spreadsheet. The package generates over 100 graph types in both 2-D and 3-D. SuperCalc also supports multiple fonts and can produce very attractive reports.

While SuperCalc can do basic database functions, it offers no advanced database features. As to auditing, SuperCalc has a specific menu option that allows highlighting of cells with specific formula relationships. Furthermore, SuperCalc's macro language is complemented by a macro recorder and a macro library spreadsheet.

SuperCalc is a good, powerful spreadsheet--not quite as powerful as either Lotus version 3.0 or Excel but not requiring the hardware of the premier packages either. For users who want many of the next-generation features without having to upgrade their hardware, SuperCalc is a good choice.

Quattro Pro. Released in the fall of 1989, Quattro Pro is the most recent entrant into the power spreadsheet market. The software's advanced spreadsheet features compete head to head with Lotus 3.0 and Excel, even though the software runs on a standard PC with a hard disk.

Quattro Pro's 3-D capabilities are excellent. It also offers a full-featured drawing program and clip art library for customizing graphs and text charts. The high-quality output can be saved on a special disk file for producing 35 mm slides or on a graphic's file for presentation in a microcomputer slideshow using Quattro Pro's SlideShow feature. Graphs can be inserted directly into spreadsheets and linked to the data; a graph is automatically updated and redrawn if underlying cell values change.

With Quattro Pro the accountant can manipulate database information by loading database files, created by dBase IV, Paradox or Reflex, directly into a Quattro Pro spreadsheet. In fact, Quattro Pro can query an external database file and import only the records that meet a specified criterion, such as all sales invoice records 60 days overdue. Other advanced features include multilevel sorts and data entry forms.

Quattro Pro's macro facilities are extensive and include a macro recorder, a debugging facility, a macro library file system and the ability to run 1-2-3 macros without modification. For spreadsheet auditing purposes, Quattro Pro offers a "map view" command and a cell annotation feature.

Quattro Pro seems to have all of the power features expected in next-generation spreadsheets, even though it can run on a PC microcomputer with a hard disk. This unique achievement puts Quattro Pro in a class by itself.

LOWER-POWERED SPREADSHEETS

Many programs are aimed at users who want less, not more. This translates into lower-cost products with fewer features. Two factors appear to be driving the lower-powered spreadsheet market:

* A moderately powerful worksheet fulfills many users' needs.

* Less powerful spreadsheets do not require sophisticated microcomputer hardware.

The lower-powered spreadsheet market appears to be important to accountants largely because of the hardware issue. Many firms and practitioners are still using IBM PCs and XTs or some compatible, and the main tasks of these computers are word processing and spreadsheets. Will these firms and practitioners buy new hardware just so they can use a more powerful spreadsheet?

Lotus Corp. believes so strongly that the answer to this question is no, it has introduced a scaled-down spreadsheet, version 2.2, just for that market. Other competitors aiming at the lower-powered market include Lucid 3-D and a number of Lotus version 2.01 clones. Consequently, any new spreadsheet purchase or upgrade in the lower-powered category also requires a careful decision.

Lotus version 2.2. This version of 1-2-3 should be viewed as a moderate upgrade of version 2.01, not as a less powerful version 3.0. Version 2.2 will run on any IBM PC or clone with two floppy disk drives--just like the Lotus of old.

Version 2.2 allows formulas to include references to external files for more advanced file linking. It has minimal recalculation and an undo command in addition to several small changes, such as the ability to turn off the computer's bell. A search and replace option can handle formulas or labels and a specific command is designed to attach, detach and invoke any add-ins the user may have.

Graphics are easier to handle due to a command that allows entire graphs and titles to be specified in one range instead of in multiple ranges. Also, the appearance of the standard 1-2-3 graphs is slightly enhanced. Version 2.2 is sold with the Allways add-in, a print utility, which can be used to print graphs in presentation-quality form. (Allways requires a hard disk.) If Allways is not used, a separate print graph disk must be used to print graphics. All in all, the graphics capabilities of version 2.2 are not much different from the graphics available from version 2.01.

Macros have been enhanced with several new commands and a recorder feature. Also, a macro library is available, but only as an add-in utility sold with version 2.2.

To keep 1-2-3 a floppy-disk-based spreadsheet that runs on all DOS computers, obvious sacrifices had to be made. Lotus version 2.2 therefore is not significantly different from Lotus 2.01.

Lucid 3-D. Lucid 3-D can run as a memory resident program or as the primary program. This means that Lucid can act as a pop-up spreadsheet, available whenever the user wants it, or it can run on its own. This is a very nice feature that facilitates unexpected use of the spreadsheet or doing minor spreadsheet chores while using a word processor, for example.

Lucid's implementation of 3-D is through external file linking, which is very easily accomplished. Furthermore, Lucid offers nine windows, which can show different spreadsheet files or portions of the current spreadsheet. This is a powerful application of the 3-D feature.

Lucid has no graphics capability unless Graph-in-the-Box is purchased as an add-on. Also, Lucid offers no database capabilities (that is, no data extract). However, it has very good auditing features from a specific audit menu and a notepad feature to annotate specific cells. Macros are also fully supported, as well as a macro recorder and the ability to use macro library files. Finally, Lucid has an excellent clipboard feature, which allows the user to cut and paste between spreadsheets as well as external files.

Lucid 3-D is not a full-featured spreadsheet, but it is fully compatible with Lotus 1-2-3, and its features are powerful. For accountants, this spreadsheet has several potential uses: for light use, such as by secretaries, for laptop portables or as a second spreadsheet with pop-up capabilities.

Lotus clones. A final alternative to consider is spreadsheets that are Lotus 2.01 clones. Two good clones are Quattro and VP-Planner Plus. They offer a few more features than Lotus version 2.01 at a lower price. Besides being 1-2-3 compatible, both spreadsheets offer advances such as a minimal recalculation feature, a macro recorder, improved graphics and an undo function. Quattro also has a superior macro debugger (but no macro library file) and presentation-quality graphics that can be integrated with text when printing.

VP-Planner Plus has superior wordprocessing capabilities, but its main distinction is its database functions. The accountant can use the software to access external databases, construct databases as large as the hard disk on which they are stored and even construct multidimensional databases. These features make the product unique and appealing to the CPA who needs a front-end tool for database development.

BEST FOR THE CPA

What should accountants do? If they have the hardware, they should probably purchase one of the power spreadsheets. The additional cost of the higher-level spreadsheets is minimal and the capabilities are truly impressive.

In the power spreadsheet category several options exist. If the CPA likes Lotus 1-2-3 version 2.01 but wants more, he or she should consider 1-2-3 version 3.0. On the other hand, if he is drawn to a graphical interface, Excel is the only product to have. SuperCalc 5 and Quattro Pro are solid products and run on any DOS computer with a hard disk. Both offer sophisticated 3-D facilities, presentation-quality graphs and advanced spreadsheet auditing features. Quattro Pro further distinguishes itself with advanced database capabilities and sophisticated macro facilities.

What if the CPA is reasonably pleased with Lotus version 2.01? Then he should keep it. If he wants a few additional features, he should upgrade to Lotus version 2.2. Lucid 3-D offers some interesting capabilities and is easy to use. Lucid is a product the CPA may want in addition to his current spreadsheet simply for its 3-D and pop-up capabilities. If he wants another version 2.01 at a lower price, the Lotus 2.01 clones Quattro or VP Planner Plus represent good choices.

No right and wrong answers exist in the spreadsheet market. A number of good products are vying for the CPA's dollars. Accountants should decide in general what they want and then preview several spreadsheet packages to ensure they get what's best for them and their practices. [Tabular Data Omitted]

CHRISTOPHER WOLFE, CPA, DBA, is an assistant professor of accounting at Texas A&M University, College Station. He is a member of the American Institute of CPAs and the editor of the Journal's Using Microcomputers department. RALPH E. VIATOR, CPA, PhD, is an assistant professor of accounting at the University of Kentucky, Lexington. He is a contributing editor to the Journal micros department.