Ask financial controllers and managers which programme they prefer to work with, and in most cases the answer is Excel. Why is it that Excel is still the darling of many finance professionals, despite all the technological innovations? In this blog post, we explain why Excel is still preferred by many finance professionals over other budgeting and planning software. What Excel’s strengths are. What limitations Excel has when you use it as a stand-alone application. And which tools you can use to get even more out of Excel.
This is why financials still love Excel
That Excel is still the first choice of many finance professionals is not surprising. Excel is familiar, accessible and affordable. It offers a lot of functionality as standard, communicates seamlessly with other Microsoft programmes and even without programming knowledge you can quickly build beautiful Excel reports.
- Excel is familiar. The programme is part of the standard (Microsoft) equipment of many organisations. Both finance and business generally have their own Excel templates, which they are satisfied with and can work with just fine.
- Accessible: Whether you install Excel on your PC or use it online, the interface always looks the same. This familiar look and feel makes the programme accessible to a wide audience. The functionality to build templates and reports is also familiar to many financial professionals.
- Affordable: Many organisations work with Microsoft Office. Whatever Office version you have, Excel is always part of it. Excel is therefore included in the price and contains a lot of functionality as standard. Scaling up Excel to more users is also relatively affordable.
The limitations when using Excel ‘on its own’
In addition to the aforementioned strengths, Excel when used independently has some major limitations that detract from the reliability of the information, such as:
- Poor version control: Excel files are often shared among themselves and can be stored separately by anyone. As a result, multiple versions of the same document often circulate. This makes it unclear what is the most recent or correct version of a given document. Especially when more people work with the same files, good version management is a must.
- High risk of human error: Independent use of Excel means that almost all information has to be entered or copied manually. A mistake is easily made in this process. You will not be the first to copy a row or column or make a typing error that suddenly produces completely different – incorrect – results. The fewer manual operations that need to be performed in an Excel file, the smaller the risk of human error. Even better is to store all source data in one central database; a ‘single source of truth’ that is always complete and correct. And from which all necessary information can be exported or converted in a few mouse clicks.
- Data manipulation lurks: If Excel files – or certain fields – are not secured, it is very easy to modify information manually. Moreover, it is not visible when certain data has been modified and by whom. This leads to a high risk of data manipulation. Well-secured and uniform Excel templates, possibly with the necessary validations and checks, help to ensure the reliability of your Excel reports.
- Limited scalability: If your organisation has a handful of entities or business units where you keep records in the Excel, then it is doable. But the larger your organisation, the more complicated it becomes to keep track of everything in Excel. Convenient tools to work faster and easier with the Excel data, and to quickly apply the same templates to a large number of entities, are then no longer a luxury to keep an overview.
- Compliance challenges: Nothing is more changeable than financial laws and regulations. New updates of IFRS, GAAPs or other financial and tax regulations are the order of the day. If you use Excel independently, it takes a lot of time to implement the new rules and updates in each individual Excel file. Moreover, you are likely to forget certain files, or accidentally start working with an old file that does not yet comply with the new rules.
How to get more out of Excel
Are you very hung up on Excel but would like to get more out of it? For example, by streamlining or automating your FP&A, consolidation and reporting where possible? In our next blog post, we highlight the combination of Excel with Fluence and Vena: two approachable tools that each in their own way facilitate Excel and complement it with additional functionality, such as workflows and audit trails.