When it comes to using spreadsheets for planning and budgeting, Excel is not an excellent solution. Many companies rely upon it heavily for these processes, but the results are messy, time-consuming, expensive, and ultimately highly inaccurate.
That’s not to say that there’s no place for Excel in the planning and budgeting process. Its place is to integrate into ERP systems for real-time planning, budgeting, and forecasting based upon a single version of truth. Read on to learn how such integration is possible and how it will benefit the entire organization.
Why Excel Doesn’t Excel in the Budgeting, Planning, and Forecasting Processes
Excel has won a place in the hearts and minds of finance professionals. There are plenty of reasons why it’s so popular – its ease of modeling, the v-lookup function, and pivot tables are just some of the features that keep users coming back. However, when it comes to managing data, Excel falls flat.
Some of the problems with Excel have more to do with its users. To err is human, and we do it frequently. People create multiple versions of the same spreadsheet, leading to more than one version of the truth (and mass confusion). Reconciling those mistakes takes time, effort, and money.
“Excel falls flat when it comes to data management”
Another problem with Excel is technical: spreadsheets are static. They’re not connected to your ERP system, so they’re not updated when new information is added. If you import or export data from your ERP system into a spreadsheet, the results will be stale.
Don’t Abandon Excel – Integrate It
Firms’ reliance upon Excel can lead to planning paralysis. It takes a very long time to plan for your upcoming year because there are countless versions of spreadsheets being passed back and forth throughout the company. At the end of the process, you can’t react to changing market conditions because your numbers are so stale.
The answer to this problem doesn’t involve abandoning Excel. Instead, integrate it into your ERP system with the aid of a financial performance management solution. A financial performance management solution is a single platform in which you can plan, budget, and forecast. It offers a single version of the truth.
“You can avoid planning paralysis by using a financial performance management solution that provides a single version of the truth”
A financial performance management solution integrates Excel so that users have a familiar interface. There are two benefits: users have a tool they know how to use, and the Excel spreadsheet finally works in real time.
Imagine how much smoother and efficient your planning, budgeting, and forecasting processes could be. There are no more competing versions of the truth; everyone is working off of the same numbers. Your financial close process takes days, not weeks. You save time, money, and effort.
“Financial performance management solutions make the closing process smoother and more efficient”
There’s a right way to leverage Excel: integrating it into your financial performance management solution. This integration offers the best of both worlds – a familiar tool and real-time information. To learn more, download our report on spreadsheet management.