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[INFOGRAPHIC] Billion Dollar Excel Errors Make You Think Twice

Remember VisiCalc? ESPN launched, Madonna was in charge, and gas was 86 cents a gallon. That was 1979 believe it or not. Lotus 1-2-3 hit the market in 1983 followed by Microsoft Excel in 1985. Each spreadsheet was revolutionary in its time and Microsoft Excel hasn’t been a slacker by any means. Jumping from 64,000 rows to a million rows in 2007 was a game changer for those of us who live on data.

Has Excel kept up with the times? Yes and No. There have been vast improvements in Excel over the years but it’s desire to be all things to all people took over somewhere. I couldn’t do without it for some work and it’s a wonderful base to run our Analytics Maestro on. It’s a good platform to build on but is it good to use for your budgeting and planning. Judge for yourself but I think you’ll find that the gaps are too great to rely on it for such critical management tools.

Excel Errors & Shortcomings (This is an abbreviated list of course):

  • Version control – Who hasn’t been caught by this? I think we all have. The 2014 Aberdeen Benchmark Survey on Financial Planning, Budgeting and Forecasting findings reported that 64% of the respondents reported version control issues.  At all but the tiniest of companies, you’ll have time during Month-Ends, Budgeting season, and Audit response time there will be more than one person needing a spreadsheet at any given time. When updates are done by two people, good luck in working out which saved version is the “correct” version.
  • Lack of Security – How hot does it get in the room when a Customer Service lead finds out the salary a Sales person makes? This type of thing happens all too often as well, people getting access to files, tables, or sheets that they shouldn’t. It’s not due to naiveté on the part of Controllers and CFOs, locking things down in Excel to the degree you need them is often hard if not impossible. By their nature, spreadsheets are for making sense of data. Stripping out what an individual should and shouldn’t see isn’t how its designed to work.
  • Last Minute Changes – ‘Just one more thing’ is something that’s heard in nearly every Accounting office just before closing Year-End. While the convenience is certainly there to make changes. Those few rushed moments can easily result in mis-keying the data that’s entered, a formula that doesn’t pick up a critical line item, or even worse – something that’s done intentionally to mess with the figures either through malice or to protect someone’s job.
  • Costly Excel Errors – $24 Million overspent by a Canadian firm was due cut-and-paste error. A dividend estimate was found to be off by $2.6 BILLION dollars. Due to a missing minus sign on a capital loss line item. Fannie Mae discovered a $1.1 BILLION dollar error due to ‘honest mistakes’ in a spreadsheet. Smaller amounts add up too.  Make sure you’re cross-checking EVERYTHING.
  • Complexity of Managing the Process – Workflow just isn’t built into Excel. Dozens…or even hundreds…of spreadsheets being used in a planning process by a mid-sized company with dozens of outlets and SKUs. Consolidate them together to get your overall budget. Take a look. Do you have a question about where you could reign in travel expenses? Or wanting to understand how product X could have a better sales projection than product Y? Now you’ve got to effectively reverse the consolidation in order to find which of those spreadsheets – or a combination of them- to find the answers, potentially update them, then roll them back up.

Forget About Excel Errors With Budget Maestro

How confident are you that none of your spreadsheets contain errors? How much time are you taking for that consolidation and analysis process? I know the answers as well as you do. Invest a few hours time to save you boatloads of time and money later by checking out our automated budgeting software. Budget Maestro has made a world of difference for companies just like yours. If you’re not convinced yet, download our free whitepaper here to learn more about the Risks and Rewards with using Excel and modern budgeting tools.

“Just because spreadsheets are near ubiquitous for performing these tasks, does not mean that they are the best tools available. While spreadsheets are easy to use and familiar, they lack the functionality needed to create accurate, timely forecasts.” – Aberdeen group

5-REASONS-STOP-SPREADSHEETS

 

Businesses of every description rely on the Budget Maestro™ family of software solutions by Centage Corporation to improve the efficiency and effectiveness of their business budgeting and planningfinancial forecastingfinancial consolidation and reporting processes. For more information, take a tour of Budget Maestrocontact Centage, or call 800-366-5111 now.