Excel is usually the first software that small- and mid-sized businesses look to for their Financial Planning & Analysis (FP&A) needs. Though Excel may be an adequate solution, it doesn’t take long for them to discover how unwieldy and clunky it really is. It is often the job of a Controller or someone in the accounting department to draft and supply regular reports with relevant data to the owner or CEO of the company. This is a time-consuming process that requires them to look through volumes of data and manually parse them for budgeting, forecasting, and analysis purposes. Businesses that are dependent on Microsoft Excel are typically forced to dedicate far too much time to generating reports. Manually processing business-critical data and summarizing their contents is such a cumbersome and tedious task that many companies find it difficult to properly strategize and make smart business decisions.
FP&A reporting is a time-critical task that that affects a company’s flexibility and mobility. Any delay in reporting affects the company’s ability to swiftly react to changes in the market or identify potential problems, both problems that affect productivity. When the accounting system isn’t properly integrated with all the different sources of data being generated by all the individual departments. They are dependent on individual managers providing accurate information from this collection of disconnected systems. Quick and accurate data that is properly formatted is absolute key to making smart decisions as soon as possible – delays often mean reports can come in when it’s already too late to act.
Non-integrated systems like Excel that leave the work of reporting up to manual processes diminish the potential gains you get from implementing Financial Planning & Analysis tools. If you identify any of these signs, it may be time for you to upgrade your Financial Planning & Analysis tools.
The 3 Most Common Problems with Manual Reporting
- Little or No Coordination Between Departments – Obtaining the correct information needed to speedily generate an accurate FP&A report is a titanic managerial task that requires coordination and active participation from all departments. Many companies don’t have this kind of quick communication between teams – often managers can’t be bothered to offer up data that’s difficult to compile! This leads to the process of FP&A reporting consuming a considerable amount of time and energy. Under these conditions, quick and accurate decision-making becomes very difficult.
- Ill-informed Decision-making – A lack of coordination between departments is a sign of an ill company. When you can’t reliably obtain accurate data from your managers in a timely manner, the company may end up making ill-informed decisions based on outdated or wrong information. This has the potential to trigger feuding between departments, with managers pointing fingers at one another for incomplete or old data. This internal disputing makes any future cooperation even more difficult, leading to missed deadlines and even more incomplete or inaccurate data.
- Budgeting, Forecasting, and Reporting are Underprioritized – There’s an old Chinese proverb: “The best time to plant a tree is 20 years ago. The second-best time is now.” You want your business to be successful not just now, but years down the line. Investing in human capital and technology can have enormous benefits in the long run. Both are critical for forecasting, reporting, and budgeting. When you don’t give them the resources they deserve, company productivity and overall results will consistently underperform going forward. Make the investment in technology right now or your competition will leave you in the dust.
If your company is suffering from any of the three problems above, it’s time for you to make changes. Here are three ways your company can tackle these challenges:
3 Solutions for Your FP&A Reporting Problems
- Excel isn’t the only option! – There is a huge selection of software solutions better suited for FP&A that can initiate change in your company and bring better results. Do some research on the technologies available that can strengthen your business’ analysis capabilities.
- Foster a Culture that Encourages Teamwork – Take the initiative to promote cooperation and partnership between the different teams in your company. Show them that they’re all working toward the same goals. Lead by example!
- Stay up-to-date! – Technology is progressing every minute of every day. Complacency kills in a world as dynamic and ever-changing as this Don’t rest on your laurels, bring in progressive-thinking people that can help keep your company light on its feet and quick to adjust to new trends and practices.