Are you following budgeting & forecasting best practices
Businesses in UK and Ireland are finding that in addition to adopting budgeting, forecasting and reporting best practices that to become a leading company they also have to make changes to the technologies used to support their business process. While there is no doubt that in many companies excels spreadsheets is still the predominant corporate planning tool used today. In a recent CFO Magazine research study, 73 percent of finance executive survey said they use excel spreadsheets and manual processes for their forecasting, budgeting, and planning. However the flip side was that more than 60 percent of these executives had the view that the process takes too long to complete. And furthermore the majority would agree it is also riddled with errors.
At MXI we still have the view that for many companies in the UK and Ireland spreadsheets are still good as personal productivity tools, but excel spreadsheets are limited and they are not collaborative planning applications. Everything has a place but excel spreadsheets are fundamentally unsuited for a complex, dynamic, shared financial planning process for several reasons, including:
1: Forecast distribution and consolidation is time-consuming, rendering frequent re-forecasting unfeasible.
2: Excel spreadsheets are incapable of supporting the kind of planning needed in a changing business environment.
3: There is little or no security or audit trail built into excel spreadsheets
4: Plan accuracy is always in question, since:
A Most data is editable, despite password protection
B Links are easily broken
C Formulas can be changed, both intentionally and inadvertently
D Version control is nearly impossible
E Consolidation is manual.
These inherent weaknesses in excel spreadsheets undermine the accuracy of the entire planning process. This erodes managers’ confidence in the process, and ultimately reduces their level of engagement. Finance is viewed as pushing a bad forecast, and the plan loses credibility. Excel spreadsheets are clearly not the best way to manage a top-notch budgeting and forecasting process.
If you want to see what else you can use instead of Excel have a look at MXI planning and forecasting software.