10 Reasons Why Excel is no Longer Suited to Today’s Finance

In 1985, Microsoft Excel became and remains highly attractive to Finance for its versatility, its speed, and its sharp visuals and has ingrained itself into this business function. It became popular for its familiarity, inexpensiveness, and scalability, offering something for both experienced users and novices.

In today’s world however, there’s been a growing demand for features that Excel can’t match. Automation of transactional accounting, Agile Management Reporting, Financial Planning and Analysis, Visualisation, and Business Intelligence, are just some of the disciplines that Finance Executives require to make quick and data-driven decisions. For many of the clients we’ve spoken to, Excel is actively hindering their evolution of these processes. Here are 10 things they’ve shared.

1. Excel wastes so much time.
Your team didn’t spend years earning accountancy degrees and MBAs and honing their strategic analytical skills to spend half their professional lives collecting and consolidating spreadsheets. It is not only harmful to employee engagement, but it also takes time away from more important, strategic decision-making for the business.

Working with Excel can lead to major time loss due to manual data entry. The lack of a centralised data repository means accessing important information can be a long and drawn out process, slowing down the reporting, consolidation and closing cycles. The time spent on tasks which can otherwise be automated with the right tools and software, means many organisations could be inhibiting their growth.

  • INSIGHT for Finance Departments automates transactional accounting end to end.
  • Agile Management Reporting with as little effort as a click
  • Never sweat over regulation again with automated compliance
  • Budgeting, Planning, Forecasting, Consolidation, and Predictive Analytics functionality
  • Less time on inputting operational data, more time making decisions

2. Excel is a huge pain to consolidate.
How many finance professionals relish the prospect of spending weeks consolidating 50+ sub-plans into a single master plan? And as for trying to produce a rolling forecast with anything like the frequency the business needs, good luck trying to do that manually.

  • INSIGHT for Finance Departments provides a single platform for finance
  • Currency translation, reclassification, investment & equity movements, eliminations, cash flow.
  • No more time spent compiling siloed reports
  • Get real time insight when you need it, thanks to Continuous Consolidation
  • Shave month-end close by as much as two-thirds

3. Excel is fragile.
In a shared ecosystem of spreadsheets, it’s all too easy for people to delete rows and cells and break formulas and links. Excel just isn’t made for sharing, and accidental deletions are behind some of the worst Excel-related disasters. Think back to 2012 when JP-Morgan lost more than $6 billion thanks to an Excel blunder.

As more data comes in, the list of formulas you use grows longer, and so does your entire spreadsheet. A minor mistake can lead to an avalanche of errors. Formatting can also cause problems.  Easy to attribute the wrong format to the wrong cell/ row, leading your team to make the wrong conclusions.

  • INSIGHT for Finance Departments takes the error out of accounting.
  • Less manual processes and data entry, leaves less room for mistakes, raising organisational efficiency.
  • Report with both speed and accuracy.

4. Excel is no good for real-time data.
Collecting data in real-time is a prerequisite for any intelligent enterprise – especially in the current volatile commercial environment. In order to update a spreadsheet, it has to be done manually. Manual data collection is not feasible for a business driven by data day in and day out.

It can only ever provide a historical snapshot of the numbers at a single point in time. Result: you’re always chasing after “the latest number” for anyone who needs to know the current position against the plan, budget or forecast.

  • INSIGHT for Finance Departments gives teams a complete and real time view of company stories and KPIs across departments.
  • Foster trust among leaders and align executive decisions on one source of truth.

5. It’s hard to get data into Excel.
If you spend hours laboriously exporting operational data from your GL, Payroll, Purchasing or other systems and manually configuring it in Excel, you’ll know there has to be an easier way.

  • INSIGHT for Finance Departments seamlessly integrates all transactional information, from finance and sales to product management and purchasing on a single, unified solution.
  • Connect every function across your company with proven best practices and in-depth analytics

6. Excel can’t support business intelligence
It may be serviceable for analytics, as long as they’re just for you. But if you want senior executives and departmental managers to have management dashboards and run their own reports (e.g., to compare actual performance with forecast performance, or to run “what if” analyses), Excel is not your friend.

  • INSIGHT for Finance Departments lets you analyze, predict, plan, and report information needed to make complete, contextual, and confident decisions.
  • What-if and scenario modeling optimises financial planning and analysis
  • Enhance profitability with fact-based decisions.

7. No single version of the truth.
With a spreadsheet-based solution everyone has their own version of the numbers. This leads to time wasted in non-productive disagreements about who has the correct figures and other data integrity issues. Records aren’t not updated continuously, leading to errors. The lack of accountability in terms of who last interacted with the data, alongside inefficient one-way communication, makes for a lack of confidence in numbers, befalling decision-making.

  • INSIGHT for Finance Departments gives organisations a single source of truth for group financial status and reporting with powerful real time and predictive analytics.

8. Too many cooks spoil the kitchen
When you have a lot of people updating an Excel spreadsheet, it becomes impossible to tell where changes have been made, who made them, and when. The audit trail goes cold fast – and that’s not good for governance, efficiency or investigating the source of mistakes and inaccuracies.

  • INSIGHT for Finance Departments lets you collaboratively plan across the enterprise in a single solution.
  • Share stories, calendar events, assign tasks, and communicate with embedded in-app integration with Microsoft Teams
  • Integrate workflows, orchestrate processes, manage scenarios across the entire enterprise to clarify expectations, improve execution, and maximise value.
  • Social media-like UI

9. Multiple currencies are a nightmare
Excel is frustrating enough when you’re only dealing in one currency and one fiscal regime. If you have to take into account multiple currencies, exchange rate fluctuations and the vagaries of national and international taxation, your consolidation, forecasting, budgeting, and reporting activities enter a whole new dimension of complexity. One for which Excel is eminently unsuited.

  • INSIGHT for Finance Departments is built to manage multi-currency and complex environments.

10. The security risk
In Excel, data is fundamentally uncontrollable. Excel spreadsheets do not provide any audit trail or proper security. This opens the company to inaccurate or false information, which in turn exposes the company to huge risks and the possibility of fraud. Furthermore, because of the accessibility of spreadsheets, specific users, sensitive commercial information could end up in the hands of those not meant to see it. All it takes is a phishing scam for a finance team’s week to be turned upside down.

  • INSIGHT for Finance Departments has the security benefits of a cloud solution and more.
  • Private customer tenant, secure communication, authentication, least authorization, and on-site tools keep customer data secure.
  • Physical security, multilayered landscape, security logs and tracing, and indirect access to tenants keeps cloud infrastructure intact.
  • Continuous security analysis by internal and external auditors keeps you secure for the long term.

Excel is no doubt a strong, flexible, and affordable application, and will probably have a decently strong user base in the years to come. But until it can match the extensive data mining, security, predictive analytics, and visualisations offered by other business intelligence tools, it will remain suboptimal.

The Intelligent Enterprise of tomorrow requires an advanced platform that can combine data mining, predictive analytics, and visualisation. The ability to allow executives to collect large, diverse data sets better and analyse them in real time makes the drawbacks of Excel in many ways redundant.

Financial planning, consolidation, budgeting, and predictive outcomes are new priorities for the world of finance. Learn more about how Clarivos’s new IP INSIGHT for Finance Departments is helping organisations evolve into intelligent enterprises, supporting data-driven decisions, streamlining manual processes, and saving time and money here.

Microsoft Excel is highly attractive to Finance Departments for its versatility, familiarity, inexpensiveness, and scalability.

In today’s world of Finance however, there’s been a growing demand for features that Excel can’t match. For years, our clients have expressed their frustration at the application’s business inhibiting limits- especially in Reporting, Consolidation, Forecasting, and Real Time Analysis – which in today’s commercial environment has never been more important.

Modern solutions like Clarivos’s INSIGHT for Finance Departments package are purpose built to meet the business challenges for Finance today and tomorrow.

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