Excel is one of the greatest desktop tools. As a personal productivity tool for analysing numbers on a static dataset, it’s hard to beat. But the Group Finance Department needs collaborative, multi-stakeholder processes for consolidation, reconciliation and regulatory reporting. And that’s where the power of Excel falls very short.

THE PROBLEM WITH SPREADSHEETS

If you’re still using Excel for Financial Performance Management (FPM) tasks such as financial consolidation, intercompany reconciliation, or regulatory reporting, then it’s almost certainly not because you think it’s the best tool for the job. It’s more likely because the only alternative was selling your firstborn to pay for Oracle, SAP, IBM, or another ‘big or emerging FPM vendor’. If you pushed Excel hard enough, you could forestall that day for another few months.

Typically, CFO’s and Financial Controllers use Excel to handle the business financial consolidation, annual planning cycle, manage budget allocation, forecast income and expenditures, and produce reports. However, using spreadsheets for consolidation, forecasting, budgeting, planning, and reporting creates all kinds of issues:

  • Weeks are wasted every year, manually consolidating a mass of individual spreadsheets.

  • Spreadsheets cannot easily model potential future scenarios or answer ‘what if’ questions.

  • Measuring actual versus plan in spreadsheets is a major chore.

  • Because spreadsheet take a lot of effort to maintain and are very prone to errors creeping-in, talented office staff end up spending too much time on low-level, non-value-add activity.

  • You may never catch the errors that plague your consolidations, plans, forecasts, budgets and reports.

THE BOTTOM LINE

You end up spending huge amounts of time, energy and resources fighting against a tool that simply wasn’t designed to do what you do for a living.

In a shared ecosystem of spreadsheets, it’s very easy for people to delete rows and cells which then break formulas and links. Excel just isn’t made for critical collaborative financial tasks and very simple errors and deletions are behind some of the worst Excel-related disasters.

FURTHER READING

THE SPREADSHEET DILEMMA highlights three of the biggest Excel blunders that you may not be aware of.