By Jennifer Toomey
1. Templates Get Ignored
The planning process usually starts out very organized. Finance will create a template for budget owners, and distribute it to everyone who needs to complete it.
But often, that’s where any semblance of control ends. Even when a file is password-protected, people find a way around it. They copy and paste the template into a different spreadsheet, then start adding their own rows and columns and formulas.
It all adds up to a massive headache for finance when it’s time to consolidate the information. What started out as a uniform set of spreadsheets turns into myriad different documents that all need to be reconciled back into one master budget or forecast.
2. Formula Errors Are Rife
Spreadsheets rely on formulas that are easy to break or get wrong. While the figures in a spreadsheet may look reliable, when you dig under the surface you can uncover all kinds of mistakes—incorrectly entered formulas, formulas not copied across the right rows and columns, even formulas that don’t perform the intended calculation. Budget owners will often change formulas, adding their own calculations and fields, but they don’t always get it right. As a result, the data gets corrupted.
The risk of formula errors is a problem for finance managers. It means they can’t take figures on trust, so they often end up combing through every cell to make sure the formulas are correct.
3. Some Spreadsheets Only Make Sense to the Owner
Spreadsheets are very easy to customize. That’s great for the person doing the customizing. It’s not so great for finance teams who need to understand what the customizations mean. Budget owners often base their calculations off their own assumptions, without listing those assumptions in the spreadsheet. This leads to endless back and forth between the budget owners and finance, trying to clarify what the owner is trying to convey.
4. Lack of Version Control
Spreadsheets are easy to edit, rename, save and delete—and those four things add up to a nightmare. When multiple people are saving their own versions of a spreadsheet, it’s frighteningly easy to lose track of which version has the most accurate, up to date information. Vital spreadsheets can be lost forever if they’re accidentally deleted. Plus, there is a high risk of data security breaches if employees are walking around with budget and forecast spreadsheets on their laptops, phones or USB drives.
5. Key Person Dependency
It’s quite common for there to be only one person on the team who really understands how the budget or forecast spreadsheets work. Sometimes, you only discover this when you need to make urgent changes or updates—and the key person is out sick or on vacation. Trying to run scenario analysis when that person is out of the office can be an exercise in futility—and that means the team can’t respond quickly to changing business condition.
6. Budget Holder Resistance
Let’s face it: budget owners don’t like planning and forecasting. They see it as a necessary evil that has to be done at the beginning of the planning period, when they’re busy doing other things like training their sales teams or launching marketing campaigns. Often, they resent having to devote their time to number-crunching. Others don’t like the tools and templates they’re given, or don’t know how to use them properly. And some just don’t understand what they need to do, because it hasn’t been clearly communicated.
All of this means that budget owners are not always motivated to submit timely, high-quality information. And that creates a lot of extra work for finance.
7. Finance Gets the Blame
The biggest headache for finance professionals is that any errors or delays are always blamed on them. Making sure that doesn’t happen creates a huge workload for finance teams. When you have many budget owners, there are often not enough resources in finance to pull the spreadsheets together. It means working long, stressful hours to consolidate the data and check for errors. All of this takes away from more strategic activities, like analyzing financial data and advising the board on how to respond.
Why Are Spreadsheets Still So Popular?
In a word: flexibility. Finance professionals can write and program spreadsheets to do things and perform calculations that other desktop programs just can’t handle.
Luckily for them, there is a way to preserve all the familiarity and flexibility of planning, budgeting and forecasting in spreadsheets—without the enormous headache of gathering, consolidating and checking hundreds of individual spreadsheets. It’s called Oracle Planning and Budgeting Cloud. And it lets you supercharge your spreadsheets.
Oracle Planning and Budgeting Cloud is an integrated planning solution that gathers and delivers numbers from all lines of business. It looks just like a spreadsheet, and does all the things that spreadsheets can do. But it’s a centralized system—so there’s no need to collect and consolidate individual spreadsheets from all across the company. The application automates workflow, with clear task lists that provide control and visibility over the whole process.
Finance teams that use it say they spend 38% less time on the forecasting process, 23% less time gathering data, and 35% more time analyzing data than their peers who rely on disconnected spreadsheets.
That’s a huge win for finance leaders. An IBM study concluded that CFOs who effectively integrate financial and operational data, embed analytics into every process, and use advanced analytical techniques to predict future trends, perform 70 percent better than their peers on profit and revenue.
If you want to learn more about how to supercharge your spreadsheets, without giving up the familiarity and flexibility you love, I invite you to read our new eBook, “Confessions of a Finance Manager.”
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