Are you still using Excel for budgeting? Don’t worry, you’re not alone – but you may be missing out. There are lots of advantages to implementing a real budgeting tool and several great solutions to choose from depending on your needs. As a Microsoft Gold ERP partner, we’re publishing this post to help you understand the important factors to consider when evaluating a budgeting solution.
Origins of Budgeting Challenges
Whether you’re a small business or a large corporation, budgeting is a principal business process.
It’s a process that can be used for decision making, as a management tool and to improve your financial performance. So, why does budgeting present such a formidable challenge to many companies? In many organizations, the budgeting process is seen as annoying, confusing, burdensome and time-consuming.
Microsoft Excel to the Rescue….
Many organizations use Excel spreadsheets as it’s a powerful budgeting tool with few moving parts to manage, plus:
- As the industry standard for spreadsheet software, your employees are already familiar with the basics of using Excel.
- It’s a multi-faceted program that allows you create customized planning templates that meet your specific business budgeting needs.
- Anyone can access it because everyone has a copy of Microsoft Office – making collaboration easier.
- Formulas can be used over and over again for each budgeting cycle which is fairly efficient.
Despite its popularity, Excel has the following limitations:
- As the volume of data analyzed increases, Excel tends to form disparate spreadsheets that are difficult to navigate. You soon find that simply compiling that data becomes a full-time job on its own.
- Compiling this data manually leads to worksheets full of errors that can be burdensome to resolve. One analysis reveals that close to 90% of spreadsheet documents contain errors.
- Despite users being able to create customized templates, Excel models have been known to lose integrity and break, when large amounts of data need to be integrated quickly.
- A streamlined budget process is one that has controls, such as rules, approvals, and a workflow system, in place. Without these, budgeting takes longer to complete, and will be error-prone. Excel doesn’t offer any sort of workflow tool, making it difficult to keep track of changes made to your spreadsheets and workbooks.
As your business grows, you’ll find there are situations where Excel just isn’t enough, and you have outgrown its use for your company’s budgeting.
At this point, sticking with it will only limit your growth. Here are some obvious signs that you have outgrown Excel:
- Increasingly complex budgeting increases the difficulty of managing budget versions with Excel, leading to frequent reviews and edits of the contents of the spreadsheets.
- As the number of people involved in the budgeting process increases, it becomes more challenging to use Excel due to difficulty in sharing and managing many spreadsheets. A cloud-based, budgeting software solution helps streamline the budgeting process more efficiently.
- It’s a nightmare to quickly revise budgets and forecasts with Excel. Attempting to do so is time consuming and your staff will be spending time and resources manipulating spreadsheets instead of analyzing performance to make better business decisions.
Excel is a powerful tool for budgeting for the majority of companies. But, when a company reaches a certain size, Excel’s limitations will cause inefficiencies, confusion, and general frustration.
At this stage, it’s time to ask your Dynamics partner for recommendations on budgeting tools. The best budgeting solutions actually integrate with Excel allowing businesses to import past data as a base for future forecasts. Integrated with Excel, a budgeting tool adds on the controls and collaborative functionality that turns uncontrolled spreadsheets into a useful budget.
With a cloud-hosted budgeting solution, users can access their budgets from anywhere, guaranteeing secure access to up-to-date data.
A cloud-based budgeting tool gives your business the flexibility to revise forecasts as market factors change and impact original budgeting assumptions. This allows your business to pivot to take advantage of new business opportunities.
Excel is a great budgeting tool, but only to a certain extent. Once your budgeting needs become complex, it’s time to check out a dedicated budgeting solution. Budgeting doesn’t have to be soul-crushing, number-crunching spreadsheet chaos, simply because you have outgrown Excel.
Here are some tools we confidently recommend to our clients:
If you’d like to discover budgeting software applications that will help you better understand your expenses and revenues, get in touch with the team at Admiral Consulting Group today and see how we can help!