THE TRUTH ABOUT BUDGETING WITH SPREADSHEETS

SUMMARYSpreadsheet has always been the preferred tool for forecasting, budgeting, planning for many organizations. Spreadsheets lack any real data control, not providing real-time financial information and proving very cumbersome and time-consuming to manage, the question remains as to why finance professionals aren't ditching their spreadsheets for more sophisticated budgeting and forecasting software solutions? RELIANCE ON SPREADSHEETS A recent survey of 100 senior finance professionals across a range of UK public sector organizations by Advanced Business Solutions reveals that 88% of public sector finance professionals admit reliance on spreadsheets for their budgeting processes with 74% of these stating that they are 'very' reliant. Just 2% of respondents admit that they 'hardly ever" use spreadsheets while the remaining 10% said that that they don't use spreadsheets at all when formulating their organizations' budgets and forecasts.SO WHY ARE EXCEL SPREADSHEETS THE TOOL OF CHOICE FOR COMPILING FINANCIAL FORECASTS AND BUDGETS?Excel spreadsheets are a popular, low cost option. They are often viewed as easy to use and to understand and so frequently become the default tool of choice in organizations' planning, budgeting and forecasting functions. However, spreadsheets rarely provide organizations with the level of functionality needed to deliver accurate and real time budgets and forecasts.THE INCONVENIENT TRUTH ABOUT SPREADSHEETSThe truth about spreadsheets is that finance teams and budget holders often find themselves spending more time managing and consolidating unwieldy spreadsheets than they do using them to manage their operations.The findings from Advanced Business Solutions' survey highlight the inefficiencies of using spreadsheets as just 4% state that it takes them less than one week (1 to 5 working days) to complete this process. Clearly, the finance team and budget holders are spending time batting with spreadsheets, they are not focusing on adding value to the organization. The use of spreadsheets can also create issues. For instance, manually entering data into spreadsheets can lead to inaccuracies and formulas often have to be checked and rechecked. With a number of budgeting spreadsheets in existence at any one time, version control can also prove an ongoing challenge. FINDING A BETTER WAYThere are a number of intelligent budgeting, forecasting and planning software solutions on the market which can be used as alternatives to spreadsheets. It is important to select a solution that suits the size and needs of the particular organization and can be easily understood and used by both finance and nonfinancial staff. By replacing spreadsheets with a tailored budgeting and forecasting software tool, the time-consuming consolidation of spreadsheets is eliminated and vital staff resources are not wasted by repetitive, manual data entry and the checking and re-checking of data. As budgetary information is instantly accessible in one centralized database, real-time information can be accessed at any time, enabling instant financial status updates. As well as improving financial transparency, this delivers greater financial control. The concern about the integrity of the data becomes a thing of the past because by eliminating both manual data entry and spreadsheet consolidation, this eliminates the possible errors that can creep into these processes. Having greater confidence in the data as well as ready access to it, allows for improved performance measurement and ultimately, better informed organization-wide decision making.CASE STUDY - GLOUCESTER CITY COUNCILGloucester City Council has improved its business efficiency by using a budgeting and forecasting system from Advanced Business Solutions (ABS). The software has helped the Council to reduce its budget loading time from ten days to just minutes and to better monitor, evaluate and improve its financial performance by replacing spreadsheets.Janet Parrott, Financial Planning Accountant at Gloucester City Council, explains, "It used to take several members of the finance team over a week to complete their budget loading by collating information from various Excel spreadsheets. This process was extremely inefficient, prone to errors and didn't provide us with an accurate picture of our finances."The web-based budgeting and forecasting system, which has been tightly integrated into Gloucester City Council's existing Advanced Business Solutions financial management system, enables the creation and real-time monitoring of financial plans and forecasts. Budgetary information can be quickly extracted, consolidated and reported to authorize users, eliminating time-consuming manual processes and the consolidation of spreadsheets. Going forward authorized users at Gloucester City Council will also be able to use ABS' system to compare budgets to forecasts in real-time and easily input, process and view financial data directly from the desktop.