Once upon a time, an ERP (enterprise resource planning) solution and Excel were the mainstays of financial reporting. But as time passed, it became clear that today’s CFOs needed a more powerful reporting and analysis arsenal than Excel and an ERP could offer – when used either jointly or separately.
While beloved by finance professionals around the world, Excel has its limits and risks. Although great for collecting data, it’s not equipped to analyse it. And if things change, data needs to be updated manually – creating room for error. When the EU Spreadsheet Risk Group reports that 90% of spreadsheets contain errors, and research by a major accounting firm says there are errors in 90% of all spreadsheets with 150 rows or more – you should be worried. With no effective way to audit or control data (so there’s no one source of the truth) or deliver it in real-time, it’s difficult to ensure you have the 100% accurate information needed to make wise business decisions – let alone forecast probable outcomes. Yes, Excel is a powerful tool, but it can be difficult to manage at scale. This, along with those hard-to-escape manual errors, can lead to mistakes in financial reporting, which can have profound consequences for a business.
Yet, despite the myriad shortcomings of Excel processes, only 47% of those in consolidated annual planning and budgeting use digital technologies.
And relying on your ERP’s limited reporting capabilities isn’t much better unless you have excess time to waste. Low productivity is a genuine concern with reports suggesting that in the US alone, FP&A departments waste 96,000 hours a year in conducting tasks which could and should be automated. These tasks include identifying and correcting errors (64%), manually updating reports (63%), manually collecting and compiling data (60%), and tracking multiple report versions (54%).
While an ERP does offer core reporting functionality, and (often cumbersome) basic budgeting and forecasting tools, it lacks the advanced analytics and customisation features required by today’s CFOs. Without the necessary level of detail, flexibility, and accuracy, it’s challenging to gain meaningful insights from financial data and make informed decisions.
The result? Suboptimal decision-making and missed opportunities.