7 Reasons Budgeting in Excel Stunts Your Growth Potential
Economic and industry turbulence in recent years has required banks, credit unions, and other financial services institutions to develop more agile financial and strategic planning processes. Yet many continue to rely on outdated tools — such as spreadsheets — for essential financial planning and management functions.
A recent Syntellis survey of more than 100 finance professionals across the industry found one-third (33%) of institutions use spreadsheets for budgeting and forecasting. Another 30% use them for scenario modeling, and more than a quarter (27%) use spreadsheets for reporting and profitability analysis. Some likely continue to use spreadsheets because they have a high level of familiarity and comfort with the tool — after all, spreadsheets have been around for nearly four decades.
While spreadsheets may continue to meet some basic finance needs, they lack vital capabilities for financial institutions operating in today’s complex environment. Excel cannot provide the transparency and collaboration functions that teams need to compile and calculate complex budgeting or financial data for informed decision-making.
By comparison, modern enterprise performance management (EPM) systems reduce manual work, create more efficient processes, streamline budgeting and financial planning, and give leaders confidence in the critical data flowing through their systems.
Here are seven reasons your institution has outgrown spreadsheets:
1. Creating or updating reports takes too long.
Building reports in Excel can be tedious and time consuming, including searching for data, consolidating that data, creating pivot tables, or manually editing colors and labels on graphs. Modern financial planning tools such as Syntellis’ AxiomTM Financial Institutions Suite can generate ad hoc reports quickly and present data that meets your unique needs. You can tailor reports for specific audiences, such as providing high-level detail for executives or drilling down with more detail for analysts.
2. Data can quickly become outdated due to slow processes.
The manual nature of spreadsheets means you have to pull information from several sources and compile it, which requires a great deal of coordination and time. These processes also carry high risks for human error as data are gathered and inputted from multiple sources. By the time you pull all the information together, the data often become inaccurate or outdated. With Axiom, many of these processes can be automated with the solution drawing data from multiple sources so there is one single source of truth for the institution.
3. Errors jeopardize data and reporting accuracy.
Excel is error prone. Even one mistake — such as a typo or incorrect formula — can create a domino effect that leads to errors across the entire spreadsheet. This is especially problematic when working on large budget files that encompass multiple sheets, cells, and formulas that require everything to be aligned and accurate. An EPM solution like Axiom’s pulls data directly from source systems into a centralized database, where proven formulas and logic minimize the chance for keystroke errors.
4. Managing approvals and version control is overly complicated.
Keeping track of the latest version of a file or where it is in the approval process can be tricky in spreadsheets, especially when employees work in different locations. As a result, finance professionals often must play spreadsheet hide-and-seek — calling, emailing, and messaging co-workers to find out who has the latest version. With Axiom, individuals with the proper permissions can log in and see the most current version and the status of documents within clearly defined approval processes. They can make edits and changes as needed without having to worry whether they’re overriding or missing co-workers’ latest edits.
5. Adjusting calculations is inefficient, and scenario modeling is impossible.
Figures often change and finance leaders need to quickly gauge the impacts and model different scenarios. Spreadsheets don’t allow you to make adjustments and see results on the fly. It can take hours or even days to revise and check calculations for a change such as an interest rate increase or an across-the-board raise for employees. With Axiom, you can change variables, test possible adjustments, and run new calculations and projections within seconds. The ability to quickly calculate and view different scenarios allows finance leaders to see a range of options for more informed, data-driven decisions.
6. The ability to manage access is all or nothing.
Compiling budget documents means inputting sensitive information, such as salary and benefit data. With spreadsheets, you can either password-protect the entire document or none of it, so anyone with access sees everything. More advanced solutions, such as Axiom’s, include role-based permissions that allow finance leaders to define precisely who can access what information within the solution based on what they need to do their jobs.
7. Critical knowledge can too easily be lost.
With customized spreadsheets or home-grown systems, it’s common for just one or two people to know the details behind the calculations. This can make knowledge transfer difficult should those employees leave the institution or otherwise become unavailable. Axiom has a familiar, common user interface and functionality across products, so everyone has the same knowledge base. Optional training can also help your organization maximize your Axiom solutions or quickly onboard new employees, so everyone can perform their necessary tasks to keep processes moving and on time.
There Is a Better Option
The recent Syntellis survey found that many finance professionals across the industry continue to struggle with limited functionality within their financial planning solutions. Accessing reliable data and integrating data from multiple sources are the No. 1 reporting challenges. Other common issues include:
- Drilling into reports to understand underlying data
- Creating reports, dashboards, visualizations, or report packages
- Offering meaningful ad hoc reporting
Axiom is designed to operate with the comfort of Excel, but without the burden of tedious manual processes. It is easy to use and understand, and includes robust capabilities such as well-defined version control, security, and efficient integration with other data sources.
If your financial institution continues to rely on Excel spreadsheets, it is time to discover new, better ways to work and collaborate.
Learn more about Syntellis’ AxiomTM Financial Institutions Suite.
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