Make no mistake: Decades-old spreadsheets are not built to handle the complexities of modern, fast-paced businesses. They’re great personal productivity tools, but can present major accuracy issues when shared across multiple users and locations.
So for all of you spreadsheet jockeys out there, here are three ways that Excel-based processes could be slowing you down, and what to do instead.
1. You can’t effectively audit a spreadsheet over time.
Heavy reliance on spreadsheets to support crucial financial processes is detrimental for a variety of reasons. First and foremost, spreadsheets are extremely vulnerable to human error. Just one incorrect number or formula can bring your professional credibility into question. And because you can’t audit spreadsheets, you might not even know when the formula changed, who changed it, or how long it’s been broken. Since spreadsheets require manual entry, they’re just not scalable—and finance leaders within fast-paced businesses don’t have time to waste on manual tasks.
They need a quick and accurate process through which to provide real-time information to business decision-makers. With the advancement of cloud technology, finance teams are turning to systems that can provide a single source of truth for actuals, budgets, and forecasts that complement their spreadsheets. This allows for stronger, smoother, and smarter processes, and the end result is more time for analysis and strategising.
2. A timely, actionable, and reliable system of rolling forecasts is important, yet cumbersome within a spreadsheet-based system.
A rolling forecast system is more than just an option for the modern finance leader—it’s a way of life. Traditional financial budgeting processes just don’t cut it anymore, as finance professionals need real-time information and actionable insights to help propel the business forward. Budgets are often outdated at the start of the year, whereas rolling forecasts adjust to what’s actually happening with your business and market. A growing company needs a tool and process that enables leaders to quickly identify performance trends and needed course corrections. Rolling forecasts allow businesses to extend beyond the annual planning wall and proactively manage the future.
3. Incorporating dashboards into your management reporting packages is a tedious process using Excel, yet it’s the best way to identify areas of strength and improvement.
Most managers can look at a bar chart and make an accurate assessment of the data and trends. But you can’t always do that with a set of numbers. In fact, you can hardly ever glance at a 1,000-plus cell spreadsheet and tell much of anything. But telling the story behind the numbers is critical to informing predictable forecasts that drive change. That’s where visual analytics dashboards come in.
Given that not every department is as inherently number-oriented as finance, dashboards provide an intuitive visual representation that helps managers make decisions based on accurate accounts of historical performance and projected trends. You can customise the information to reflect the most relevant drivers to each cross-functional department, and include ratios to help provide context and meaning.
The key is to present the KPIs that matter most without cluttering dashboards with too many details. When you can make dashboards relevant to departmental managers, you’re empowering them to analyse the information and make better, faster decisions within their area—which are ultimately reflected within the business’ bottom line.