7 Signs It’s Time to Leave Excel
Few planning tools on the market can measure up to Excel’s strengths. It’s flexible, powerful, and user-friendly – at least if the user has the necessary skills. But even though there are many pros with using Excel, there are many cases where it isn’t a suitable tool for budgeting, forecasting, and planning. Below we list 7 signs it’s time to leave Excel.
The current day is characterised by speed and rapid positive and negative changes - something that can encounter problems for companies. The market and reality change quickly, and new forecasts must be updated. We have seen a couple of different examples of this, for instance, with the Covid-19 pandemic and the ongoing war in Ukraine in combination with increased inflation. During these circumstances, there’s great value in using a system that continually, easily, and effectively with a high degree of automation can give an updated financial overview.
Excel works great for smaller companies without a complex or business-critical planning process. When the company grows, and more people become involved in the processes, more problems and challenges arise since Excel isn’t a collaborative tool. For example, it doesn’t have support for rights management and workflows. Another challenge is that the version management isn’t good enough and doesn’t have any routines for attestation. It’s impossible to troubleshoot when the complexity is too great.
Many companies have a so-called “Excel guru,” which is essential for the company’s way of working. This can create challenges that become especially evident when the Excel guru leaves the company, and someone with a different skill set takes over. Your company has everything to gain by using a more modern and integrated system that can automate and streamline your processes.
Which companies are Excel suited for?
As previously mentioned, Excel usually works well for smaller companies with a somewhat flat growth curve and a few simple processes. Excel also works well when only a few people are involved in the process. The important thing is that the employees have the knowledge and skills needed to build sufficient Excel processes to support the business. You must also accept that the process isn’t data-driven but manually controlled.
In addition to small companies, businesses that lack an overall picture of how the planning process should function have more to gain by waiting to invest in a system for budgeting and planning. For these companies, we recommend that they begin establishing a model for the financial processes before investing in a platform to support these processes. This is for your company to be able to customise and use the system for budgeting and planning as optimally as possible.
Signs it’s time to leave Excel
The answer to this question depends, among other things, on the company’s situation, size, and other variables. Below we have listed 7 signs it’s time to leave Excel:
- When the external data needed for the budget and forecast process is in many different systems and needs to be consolidated
- When several individuals are involved in the planning process
- When the complexity increases and the management of Excel files becomes more time-consuming
- When your company has high ambitions for growth, which demands fast decisions and changes, continuously updated plans and forecasts
- When the company’s Controllers spend all their time preparing and consolidating and have too little time to analyse the budget
- When you want to increase the understanding, engagement and ownership of the financial goals and processes within the business
- When you want to work more frequently and data-driven with financial planning
Budgeting, forecasting, and planning should be a value-creating process. It should be a process that makes the business, employees, and processes develop in the same direction and help the company evolve in accordance with the set goals. Excel is often an obstacle when you need to delegate and increase ownership of the budget or forecast. Also, the business controllers must often spend excessive time on administration instead of supporting the business with value-creating analyses.