12 Signs your spreadsheets is unable to support your budgeting process
Excel may be a commonly used budgeting tool and due to its flexibility and cost-effectiveness but it there will be a point whereby the reliance on spreadsheet budgeting becomes an challenge for effective decision-making and analysis. This can result in severely ineffective decision-making, lost productivity, opportunities and impacting your company cashflow and eventually result in bankruptcy.
So how can you identify this tipping point and what should you do?
You can start off by identifying the red flags in your budgeting process.
Lack of ownership and accountability in the budgeting process
No single version of truth
The Excel spreadsheet has grown so large that details are impractical and lost within spreadsheets
Maintenance of spreadsheet eats up more time and resources that than performing actual planning and analysis
Your budget model is unreliable - mistyped data, broken formulas, missing links, logic errors
Changes in data structure or roll-ups that leads to the frequent break-down of budgeting models
Difficulty in maintaining data accuracy that results into overbudgeting and impacting year-end cash flow year-end cash flow.
Budget calculations that have grown too complex for budget owners to prepare
Deferred revenue projections (for renewals, royalties, subscriptions, etc.) are too complex to model requiring the layering of multiple revenue schedules within multiple periods.
Comparison of actual results to plan or previous year actuals is a time-consuming "Cut-and-Paste" exercise that eats up the already tight schedule required to produce month-end analysis and reports.
Executives don’t know who their most profitable customers are, what managers are most productive, why certain metrics are “out of sync”.
The financial statements are not fully integrated because the model was modified too many times to ensure no errors.
So what can you do once you identified the red flags in your budgeting process?
You can automate the budgeting and forecasting process, reduce budget cycle time, eliminate calculation errors and generate integrated financial statements. This allows you to re-allocate your time-consuming data entry, resource-draining formula maintenance activities to strategic financial analysis activities that have a greater impact on the company’s financial position. Repurpose your time for more important tasks that drive actual value.
Read more here about how you can modify, accelerate your budgeting process and the options available to free up your time and resources for high-value tasks in your budgeting cycle.