Spreadsheets hinder the process

Many of the difficulties described above result from the limitations of spreadsheets. Let's look at this more closely:

• Spreadsheets are flat, single dimensional documents.
  Spreadsheets can be extremely powerful tools for collecting, sorting and computing data. But with large amounts of data (up to 256 columns and 65,000 rows), spreadsheets quickly become unwieldy. To maintain usability, large spreadsheets must be divided into smaller pieces connected by links and formulas, replacing one kind of problem with another. Broken links derail the entire process until fixed. Furthermore, a change to any single cell on any component spreadsheet requires a new consolidation to reflect its impact on overall results.
  
  
• Spreadsheets lend themselves only to Income Statement (P&L) forecasting.
  Most spreadsheet-driven budgets focus on the income statement (P&L). Expenses are collected from the responsible managers along with their revenue forecasts and cost of sales. The data is then consolidated into one master-forecasting sheet where a manager can relatively easily see the forecasted performance of each business group, as well as the entire organization's bottom line. The more detailed the data, the bigger and more complex the spreadsheet becomes.
  
  
• Balance Sheet and Statement of Cash Flows forecasting is nearly impossible with spreadsheets.
  Unlike the big picture of the Income Statement, the Balance Sheet and Statement of Cash Flows rely on proforma transactions that reflect the timing of sales, expenditures and receipts. Most enterprises use the accrual method, which complicates things even further. Trying to produce accurate cash flow information - critical for financial survival - is almost impossible with spreadsheets.