Any leader will tell you that trust is a critical component of business. Customers respond positively to businesses they trust, and abandon those they don’t. Good managers spend at least part of their day building and establishing trust with their employees. Employees know that company leaders need to trust them to do their jobs, and provide them with the right information to keep the business profitable.
The Importance of Trust in Business Financial Reporting
One of the biggest ways to destroy trust with leadership is to present them with incorrect data, especially financial data. Decisions are made based on that information, and trust must exist between budget owners, financial experts and organizational leadership. Because Excel lacks the features that ensure consistency, using it for business budgets can create tension between you and upper management.
The data used for financial reporting and the information stored in company budgets are what organizational leadership use to make important operational decisions and growth plans.
When those numbers are incorrect, leaders can make uninformed and even detrimental decisions that need to be corrected and explained to shareholders.
How Excel Can Erode Trust with Leadership
Excel lacks some of the safety checks and security features of dedicated and sophisticated budgeting and planning software. These missing pieces can lead to errors – and errors could lead to catastrophe in a business plan.
One of the missing pieces with Excel that can cause issues is a lack of role-based controls. Anyone who has access to a spreadsheet can make changes to any part of it at any time. That means a sheet can be changed by someone else without it being immediately evident, changing what you’re reporting to leadership in unintended ways.
Auditing a spreadsheet might turn up these changes before any data is run up the chain. However, complex spreadsheets – like those common with budgeting, forecasting and planning – are difficult and time consuming to audit. Plus, we’ve all been in a situation where the CFO or CEO needed an emergency report, leaving no time for a review of the data.
All of this rolls up into one of the biggest issues with using Excel as a collaborative tool – or even as a single user. Excel lacks versioning functionality. If changes are made, a spreadsheet owner or users can’t see that a new version was saved, nor can they step back to a previous, known-good version.
Without the ability to know what changes have (or haven’t) been made, or even who has made them, reporting based off an Excel spreadsheet can be a roll of the dice. And without version controls, it’s difficult to step back to a version that has been audited and is known to contain accurate data.
These challenges may leave you presenting your leaders with inaccurate numbers and reporting. Do this one too many times, and leadership will begin to wonder if they can trust what you’re presenting and if they can make critical business decisions based on the information Excel holds.
Accurate and error-free data and reporting is important to decision making. When creating and storing business-critical data, organizations 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 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.