Managing the budgets and projections solely in Excel might result in version control concerns, data integrity challenges, and formula errors due to human data entry.
FREMONT, CA: Every firm has a unique approach to budgeting and forecasting, with the complexity and extent of your operations being dictated by the size, structure, and industry of the business. However, any finance team can face budgeting and forecasting issues, and acknowledging those challenges is the first step toward resolving them.
Here are several frequent roadblocks that may be preventing businesses from their budgeting and forecasting efforts:
Disparate and Disconnected Data Sources
Data silos are a challenge for 57 percent of finance teams, according to a report. Firms will not be able to interpret the story those figures are telling them if they spend too much time wrangling numbers from the ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), HRIS (Human Resources Information System), and other data sources. This slows the budgeting and forecasting process, making it more challenging to plan ahead of time when business conditions change. Data silos also make it difficult to engage with cross-functional stakeholders, resulting in unstable budgets and predictions that do not provide a complete picture of the company
Manual Processes in Excel
According to one survey, 82 percent of finance teams still utilize offline Excel spreadsheets for budgeting, forecasting, and other fundamental FP&A processes. However, the same research indicated that 54 percent of Excel users are dissatisfied with their spreadsheet procedures, claiming that they are too labor demanding, take too long to finish, and are difficult to administer across the entire company.
Finance teams all across the world are at ease with Excel. On the other hand, offline spreadsheets will not be able to handle advanced budgeting and forecasting once the company has reached a particular degree of maturity. Managing the budgets and projections solely in Excel might result in version control concerns, data integrity challenges, and formula errors due to human data entry. Has one ever had a template breakdown right before a deadline? (Because that is what happens when Excel is used as a database.)
No Audit Trails, Workflows, or Data Validation Measures
Budgets and predictions contain many changing pieces, so keeping the contributors on the same page is crucial. It is difficult to keep track of the progress and maintain a healthy work-life balance if companies search the inbox for template files, chase down colleagues for numbers, and constantly lose sleep over whether the data is accurate—particularly when one is spinning over ‘final’ budget version 14.1-a.
That is why organizations should set up workflows, audit trails, and data validation procedures. Without them, confident budgeting and forecasting is much more difficult.
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