Expressions like “Excel-heavy” and “Excel-Hell” are gaining more ground in finance departments, and rightfully so. In my opinion, Excel is often misused in many companies, which has led to its poor reputation.
Excel is not a miracle solution. It is not an AI-generated tool that can produce monthly reports with the click of a macro button. In fact, Excel is not particularly smart, and it only becomes useful when used wisely.
Time-consuming manual processes
Many companies still struggle with time-consuming manual processes. The reason behind this is that their financial systems are not up-to-date in terms of the reporting requirements of today. Even though more and more companies attempt to improve their solutions by implementing Business Intelligence (BI), BI is also not very useful unless used correctly, just like Excel.
Often, I have observed that other important inputs from different systems are not well-integrated into the financial system, if at all. Therefore, Excel becomes the go-to solution, and what happens then? Excel spreadsheets become heavy, complicated, vulnerable, and errors occur. Time-consuming manual Excel spreadsheets do not align well with the demands for quick reporting.
What should be considered?
There are no quick fixes. However, if a company wants to meet the external demands for valid data and processes, it needs to think differently. Some of the things companies should consider include:
When implementing new financial systems, think broadly. Which other systems are important to optimize the quality of the data flowing into the system?
Which data is relevant for the company to conduct effective analysis and management reporting?
Automation of processes should be considered, typically through well-integrated internal IT controls, which can help optimize the quality of data and processes.
Preventive integrated business controls provide significantly better quality than detective controls, which are typically manual and random.
Is Excel a thing of the past?
Excel is by no means a thing of the past. It’s just about using Excel correctly. Excel combined with, for example, Business Intelligence, is fantastic for producing effective analysis and management reporting. Excel, in my view, should not be used as a tool to replace missing functions in the financial system. Excel should solely be used for existing data.
Analysis in Excel can also become heavy, but it ensures that there are no errors in data input and processes since that should be handled automatically by the company’s systems. For many years, I have developed efficient dynamic analyses for non-Excel experts and used these analyses to create valuable transparent management information. When used correctly, Excel is indeed a powerful tool.
