As the technological, financial, and reporting needs of businesses diversify and evolve, it becomes increasingly essential to have a dependable financial planning system in place. This helps organisations keep track of their finances and make informed decisions, while also keeping all stakeholders on track to achieve common goals.
Traditionally, financial planning was conducted using Excel spreadsheets, but more recently, a growing roster of businesses are adopting specialist Financial Planning and Analysis (FP&A) software to carry out the same function. Which option is the best for your business?
The Limitations Of Excel Spreadsheets
Microsoft Excel has been the gold standard in formula-based software for nearly 30 years, and for good reason. It is capable of extensive modification and extremely complex calculations that far outstrip the manual capabilities of most human beings. While most people can use spreadsheets at a basic level, Excel is not particularly accessible for complex tasks, hence the expression ‘anyone can use Excel, but few can use it well.
This brings several limitations for businesses using Excel for financial planning and analysis. Firstly, Excel is a child of the 1990s – completely dependent on manual data entry and maintenance, which can be time-consuming and prone to errors. Secondly, only one person can make changes at once. If several people are using a spreadsheet, it only takes one person to accidentally change a formula or delete a figure to throw out all the calculations.
It is also difficult to keep track of changes and maintain a single source of truth on a multiple-use spreadsheet, which makes accountability problematic in collaborative projects.
Lastly, being ‘two-dimensional’, it is not geared up for the needs of FP&A which requires multi-dimensional planning.
Reporting And Analytical Challenges
Worse still, from an FP&A perspective, creating reports or performing analytics on Excel can be difficult, especially when dealing with large datasets from multiple sources. This can often delay reporting and makes it difficult for decision makers to stay up-to-the-minute on organisational finances. Complex formulae and the absence of a lot of modern analytical tools in Excel can further hinder deep financial analysis, bringing the risk of potential oversights or misinterpretation of data.
The Advantages Of FP&A Software
FP&A software provides a more comprehensive and flexible. They deliver a faster, more resource efficient approach to financial planning than using spreadsheets. There are several reasons for this, but the most important one is that FP&A platforms are specifically designed for the purpose, so there is less need for modifications and workarounds than spreadsheets.
FP&A platforms are also intrinsically more efficient; with direct data imports from various sources such as your accounting system, ERP, and CRM software, you gain real-time data access, with a single source of truth for all your financial information. This integration and automation reduces the need for manual data entry and essentially eliminates the problem of errors and duplications.
Streamlined Forecasting Capabilities
Using advanced features such as automated workflows, collaborative budgeting, and integrated reporting dashboards, finance teams can streamline and improve their forecasting capabilities. This allows organisations to forecast multiple scenarios, creating financial strategies and forecasts to cover various outcomes.
In a volatile and unpredictable market, this gives organisations greater agility and resilience when planning new products, services and launches, with the capacity to make informed decisions based on up-to-date data, and to adjust their plans accordingly.
Customisable Templates And Reports
Another benefit of FP&A software over Microsoft Excel is that most good platforms come with a range of customisable templates and reports. Rather than having to create everything from a blank page on Excel, ready-made templates can simply be adjusted to accommodate your organisation’s structure, accounts, data and requirements. This versatility not only saves time but makes it easier for your team to collaborate, sharing data in report format with colleagues and stakeholders through the user dashboard.
Discover The Benefits Of Corporate Planner
Corporate Planner is a powerful and intuitive FP&A platform proven in 5,000 businesses of all sizes. A single integrated platform, it handles everything including integrated P&L, B/S and cashflow planning to detailed sales and operational planning. To discover the benefits or to find out more, please contact Account-Ability today by clicking here.
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