Growing companies are always looking for new ways to innovate, cut costs and expand. Sometimes, one of the best ways to innovate is to change the tools with which one conducts business. Spreadsheet software, ubiquitous in the form of Microsoft Excel, is a common financial tool used by most major organizations who seem to have little problem with its use. When one looks deeper, however, traditional spreadsheets are revealed to be a major liability as they are unreliable and labor intensive. Growing organizations should consider switching to cloud-based FP&A platforms for their budgeting, forecasting and reporting needs instead of sticking with static spreadsheets. Here are the Top 5 benefits that organizations can expect when they make the switch to cloud-based FP&A software.
Spreadsheets, although a friend to many finance professionals, can be unreliable. Research has found that 80% of spreadsheets contain errors with the most common being logical errors such as the incorrect use of formulas. Errors may appear small in nature initially, but they can compound and cause worse issues later. A small typo in a formula can skew the organization’s entire worldview as has happened to the embarrassment of many firms and organizations.
Cloud FP&A programs, in contrast, are built on stronger foundations as they can take information directly from ERPs and have built-in logic. Cloud-based FP&A programs give a more accurate view of a company’s data and can also be helpful in pointing out where errors have already occurred.
- Auditing and Security
Spreadsheets have some security features which are fine for smaller organizations but could become an issue at larger ones as the number of people who work on individual spreadsheets grows. Companies run the risk of data leaks and other assorted mishaps from misplacement, accidental deletion or outright theft of confidential company information. Cloud FP&A offers more certainty in terms of security.
Cloud-based FP&A programs, such as Limelight, have built-in audit tracking to help larger organizations keep track of who is contributing what in their data. Limelight’s files are regularly backed-up and hosted on the Amazon Web Services cloud. Limelight is encrypted in compliance with industry best standards of encryption and protection. In addition, Cloud FP&A offers much more robust role-based security features than its static spreadsheet counterpart to ensure users are not accessing information they are not assigned to.
- Job Satisfaction and Costs
Spreadsheets can be confusing and labor-intensive. Many organizations spend a great deal of time manually working on spreadsheets that could be better used for more analytic, deeper functions. Finance professionals spend years in school mastering the intricacies of their craft, they are much better suited to more advanced tasks than data-entry and collation.
Cloud-based FP&A frees up the finance team’s time for deeper pursuits. Cloud FP&A programs update automatically so a team is always assured that they are working with the latest and most accurate information. Automation can also be a cost-reducing strategy for businesses, leaving precious resources for other pursuits.
As organizations grow the number of people who must contribute to the financial process also grows. Collaboration can be difficult with static spreadsheets because of their lack of version tracking and the need for frequent hand-offs. Collaboration with spreadsheets involves creating multiple versions and sending them via email. The compounding of different versions leads to errors as employees can become confused as to which version is the most current or the most accurate.
Cloud-based FP&A systems eliminate this need for dueling versions as they unify data in one central location and enable version tracking. This is especially good for modern hybrid workforces as talking to a peer is no longer as simple as walking across the office floor. A single point of truth and unified data will allow the entire finance team to work on the Cloud with comfort and confidence, free from fear of error.
Spreadsheets cannot handle great deals of information because of their inherent size and structural limitations. There are many instances in which major organizations have had their data distorted by Excel, leading to unfortunate and very public consequences. Businesses that are looking to grow need more advanced and refined tools to better meet the needs of their organization.
Cloud-based FP&A platforms enable growth because of their automating and unifying capabilities. They can handle large groupings of data and more easily organize them with minimal human input. Organizations can expand with the knowledge that their data is safe and workable.
Spreadsheets are a great tool and spreadsheet software like Excel has become an industry standard. There are issues with spreadsheets, however, and they are not suitable for large scale organizations because of their limitations in terms of size and reliability. Organizations that seek to grow and expand their business would get better function out of cloud-based FP&A programs such as Limelight.