Imagine what it felt like when companies first started to move from pen and paper budgets and planning to spreadsheets. The ability to quickly change data and see a cascading effect thanks to formulas must have been life changing. It looked and acted like a ledger but performed complex calculations automatically.
So many things have changed since then. Businesses have become more complex, planning has become more essential, and data visualization is both new and indispensable. Spreadsheets were the perfect antidote to the old way of doing planning, but now, they have become the reason that modern businesses need more than a program like Excel can provide. The next evolution for businesses is FP&A software.
If you’re used to doing planning in Excel, you might wonder what financial planning and analysis software can give you that a spreadsheet can’t. Let’s look at some of the advantages of FP&A software over the more traditional Excel way of doing budgets, accounting, and fiscal planning.
Define and Enforce Business Processes
Excel provides a blank canvas for financial planning. A spreadsheet can be set up however a business wants and needs. The problem with this approach is that there is no rigor to defining business process and logic. If a sloppy process is defined, there is nothing to enforce good practices.
FP&A software, however, allows users to define and enforce the business logic needed to support complex planning, editing and formulas. This prevents errors while allowing companies to match their planning to specific needs.
Implementation of New Planning Models
For many organizations, the creation of a budget or planning spreadsheet is a complicated, time-consuming process. Once created, the same spreadsheet (or a version of that sheet) is used over and over again. This is all well and good — until a company wants to switch to, or even just test, a new model.
For companies looking to try out a new model like rolling forecasts, FP&A software accommodates that change with minimal set up time. Some time is, of course, required for training and becoming familiar with how to implement and effectively utilize the new process, but the mechanics of the model are no longer a concern.
Unfortunately, this one is quick to define. Excel just doesn’t have the ability to do data validation on its own. For accuracy, design and algorithms in a complex spreadsheet must be independently reviewed and tested to guarantee integrity.
Validation of data is an essential component of good FP&A software. There isn’t a need for add on or outside data validation tools, and no need for manual testing of formulas and data.
One Word: Dashboards
Creating visualization of data within Excel is cumbersome. It can be done, but not quickly and not without expert knowledge of the program.
Generally speaking, good FP&A software provide access to business intelligence tools that make creating visualizations and dashboards not only an easy process, but one that can be done quickly and on demand. And with integrations directly into other business systems, like your ERP, dashboards can be kept fresh and up to date automatically.
Download our eBook “5 Questions Every CFO Asks Each Budget Season” to learn more about the importance of modern tools for your company’s budget process.
Small to mid-market organizations rely on Centage Corporation’s Maestro Suite, which includes Budget Maestro™ to help them keep track of and manage their cash flow. Budget Maestro improves the efficiency and effectiveness of business budgeting and planning, financial forecasting, financial consolidation and reporting processes. For more information, take a tour of Budget Maestro, contact Centage, or call 800-366-5111 now.