9 ways that CFOs of SMEs can improve their financial management by parting with Excel

Large companies that consolidate their accounts usually use Corporate Performance Management (CPM) applications that allow them to integrate their processes and all their Financial Statements, making it easier to report and carry out reliable financial planning in real time.

But as far as small and medium-sized enterprises (SMEs) are concerned, there’s still a long way to go to improve their financial management. The main reason is that they cling to Excel to generate reports, the extraction of which should be directly outlined in their accounting software, or alternatively, automated using business intelligence tools such as Power BI for reporting.

However, there are still many CFOs of SMEs who manually transfer the data from their Financial Statements to complex spreadsheets, which, in addition to taking valuable time, can lead to errors in data handling.

Many of these Excel-built spreadsheets have been so labor intensive that many CFOs are heartbroken to see that certain software applications have picked up on the main reporting demands of CFOs and have, for many of these reports, automated their generation directly from the accounting software. In these cases, the logical and sensible thing would be to abandon Excel. However, having lived with these reports for so many years now, many CFOs find it difficult to make this decision.

 

Advantages of parting with Excel to improve the financial management of SMEs

To improve their financial management, the SME CFOs should mimic large companies and give up on Excel, which can bring them multiple advantages, including:

• Abandon outdated spreadsheets. Many spreadsheets created by CFOs were created years ago and are having a hard time adapting to an increasing volume of data.
• Expedite obtaining key reports for decision making. In order to make optimal decisions, the information, in addition to being reliable, must be timely. If there are delays in obtaining it, the company may suffer losses due to the delay in decision-making. Report extraction is fully automated in certain accounting applications, while data transfer to Excel can delay accounting and financial reporting.
• Implement new financial processes that facilitate company growth. As the company grows, the current financial processes are no longer operational. Therefore, new processes must be implemented, and new software used, that automates the generation of accounting and financial reports, in order to replace spreadsheets that need to be retired.
• Improve competitivity. If we recognize that in the digital age we need to choose modern software solutions that facilitate reporting, we’ll gain a competitive advantage over those of our competitors who postpone implementation and continue to use Excel to generate their reports.
• Avoid errors and complications in budgetary data updates and reporting. Using spreadsheets for budgeting and reporting can cause errors. It also makes it difficult to update the data, and for different users to access this information.
• Facilitate the integration of financial processes. Replacing Excel with an application that better facilitates processes integration ensures that different users of accounting and financial information can be working with the same figures in real time.
• Carry out reliable financial planning in real time. Many companies still do their financial planning and scenario-building in Excel. Since it’s not integrated with the Financial Statements in real time, there are delays in obtaining reports. By integrating financial planning, budgeting, and scenario-preparation into the company's accounting software, you can gain precision, transparency, and speed, and optimize company resources.
• Facilitate traceability and transparency. A fully integrated system will make it easy to access data no matter the level of a transaction, something that isn’t possible with Excel.
• Accelerate obtaining scorecards with the main KPIs. Getting the scorecard automatically is another determining factor in reliable financial processes and leaving Excel behind.

 

Procrastinating on decisions that allow us to improve our management simply to avoid taking risks, may in fact be the greatest risk to an organization in the medium term, or even the short term.

 

About Lucanet

Lucanet offers user-friendly software and competent advice for Corporate Performance Management for finance. Solutions for consolidation, planning, reporting, and data management greatly facilitate the complex work of CFOs, financial controllers and group accountants.

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