Reducing spreadsheet risk in budgeting and planning

This third blog in our series will examine the impact that spreadsheets have on the budgeting and planning process.

When finance leaders want to start a planning and budgeting exercise, it is common for them to reach for their favorite spreadsheet. Spreadsheets are often the first tool of choice to store, manage, analyze, arrange, and present information for financial planning. Unfortunately, for many financial business processes, spreadsheets create a problem—inefficiency. And because spreadsheets can store financial data in a readily sharable way, there is a high risk of exposing confidential information.

The fact that spreadsheets are prone to errors continues to make the news. In October 2020, during the second wave of COVID-19 in Europe, an Excel spreadsheet error under-reported 16,000 COVID-19 cases in England. Despite these well-known issues, a recent IDC survey on enterprise performance management (EPM) found that “spreadsheets are still very commonly used for EPM activities because of their ease-of-use and accessibility; however, there are several challenges with relying on spreadsheets.” Mistakes due to human error and version control were reported as the most significant challenges to using spreadsheets.

When it comes to budgeting and planning, managing this process in a spreadsheet can create many issues. As soon as one person starts making changes to the spreadsheet, calculations can be overwritten, and errors introduced. Once that happens, version control becomes impossible as nobody is sure which version is correct. Now apply these issues to an organization with multiple departments, locations, and entities, and the problem becomes enormous.

Replacing this error-prone and insecure method with a modern analytics platform that includes EPM capabilities can help reduce errors and enable enterprise-wide collaboration with an integrated, closed-loop approach.

Infor EPM's Budgeting & Planning module connects to your organization's core ERP system (whether it's an Infor solution or third-party software) to bring financial budgets and actuals together. The pre-built functionality implements best practices with a modern, consumer-grade user interface.

When the planning process is integrated with financial reporting and analysis and workforce-related costs, an organization's management team can gain improved visibility into all financial processes, more accurate forecasts, better auditability, and the power to handle whatever challenges come their way.

Modern analytics platforms should provide native integration with Excel enabling you to use Excel's latest features, such as dynamic array formulas, and allow users to import governed data from the platform to their spreadsheets and use Excel to change the model. An in-memory analytical and planning model ensures that the central model is immediately recalculated as soon as changes are made.

Read more about retiring spreadsheets from the budgeting and planning process and four other ways of reducing spreadsheet-created risks and inefficiencies in your organization in our best practice guide today.