But the negatives of using Excel go far beyond the simple inconvenience of needing to learn a new product. Licensing might be a concern, or your team could simply have a fear of change. If you’ve been using Excel for a long time, the idea of switching to something else for your business processes, like budgeting and forecasting, might seem daunting. Companies compensate by restricting the number of people with access, leading to a budget that is potentially lacking important input. For many organizations, this lack of role-based access may be a compliance concern, as anyone with the password can see the entire budget. There is also only a single password for an Excel document, meaning that it must be shared instead of each user having their own access. And while these documents are encrypted when protection is added, many people choose a password that they and their colleagues can easily remember. Like other Microsoft Office programs, you can protect an Excel spreadsheet with a password. These aren’t concerns for someone using Excel as a family budget planner but can be detrimental to an enterprise. This means either each person is working on their own version of the budget, causing the headache of combining and reconciling the data later, or many people are working off of a single document, risking overwritten data. But Excel doesn’t offer collaboration access. No CollaborationĬompanies of almost every size rely on input from multiple people to plan budgets and complete forecasting. Because issues are so common in Excel, organizations must set aside time for teams to review important work, or run the risk of sharing incorrect financial data. Going hand in hand with errors and mistakes is the time it takes for knowledgeable accounting teams to review and correct problems. And the features of Excel – like hiding data – can cause huge issues, as it did for Barclay’s in 2008. Mistakes and errors are easy to make in Excel, especially when importing data or when using complex or unfamiliar spreadsheets. The Cons of ExcelĮxcel presents a low barrier of entry for companies, but that doesn’t make it the right tool for the job. Even if it’s more time consuming, using Excel doesn’t require change. Team members are used to working in spreadsheets and have their workflows already set. Probably the most common reason why Excel is used, especially for budgeting and forecasting, is that the application is what the company has always used. Searching for free budget spreadsheet or personal budget template returns a multitude of results. For a simple budget, such as personal money management or a monthly budget for a family, Excel and other spreadsheet applications are easy to use. Many people are familiar with using Excel or Google Sheets as a budget planner because they already do this for their personal finances. Even novice users can quickly figure out how to do computations and create formulas. They may not be power users, but they know how to navigate the program quickly as well as how to add and delete cells. High User Adoptionīecause of its high availability, most users are familiar with Excel’s interface. Microsoft Office can be found on roughly 450 million desktops today, making it easy to include various members of your team and all stakeholders in the budgeting process without additional onboarding or licenses. Nearly every employee, regardless of organization size, has a copy of Excel available to them, thanks to Microsoft Office. Why do so many companies default to using Excel? Highly Available If budgeting and forecasting tasks are accomplished more accurately and easily with software designed for that purpose, why do finance teams still rely on Microsoft Excel? And if there are positives, do the negatives outweigh them? The Pros of Excel In a recent survey we conducted of CFOs, we found that almost 90% still use Excel for their business budget, even though nearly half felt that they needed better financial forecasting and what-if scenario testing. However, the problem with Excel, or similar spreadsheet applications like Google Sheets, is when companies start using it for things it wasn’t really designed for – like tasks that could be accomplished much more efficiently with a dedicated application. Microsoft Excel is a useful business application – in truth, enterprises across the business world use Excel on a daily basis for a myriad of tasks.
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