An article in Business Finance caught my eye. Editor-in-Chief Dave Blanchard interviewed Scott Brennan, a partner in Accenture’s finance practice and global lead in Accenture’s Charlotte-based enterprise performance management practice. The discussion was around what companies “can and should be doing to gain the most value from their corporate reporting processes.”
Blanchard and Brennan discussed a financial reporting study issued by Accenture and Oracle; the study’s respondents included 1,100 finance managers in 12 countries. 52% of the respondents came from organizations with more than 1,000 employees; only 2 % represented companies with less than 250 employees.
Given these demographics, it’s safe to assume most of those participating in the study have some form of a budgeting software package – the flip side being few rely only on Excel for budgeting. According to Brennan, the ‘key takeaway’ is that “despite 82% of companies saying they made substantial changes in this process [financial consolidations, close and external reporting process] over the last five years, 84% say they still struggle with data quality issues, and 71% say they still struggle with getting good visibility into the data or doing data analysis.”
The ‘fallout,’ as described by Brennan, is that “15% of companies actually missed statutory filing…almost 20% missed internal dates for management reporting.”
If these are the numbers for those most likely using some type of automated budgeting, what would the numbers look like for those companies relying entirely on Excel for budgeting?
As Brennan goes on to explain, the key initiatives to improve these percentages are data quality and data visibility. Neither efforts would make much of a difference when working with spreadsheet-based budgets.
Why? There is simply no way to ensure data quality for any data contained in a spreadsheet. Spreadsheets lack security, data loses context, traceability and integrity, and human error enters the equation. Data visibility is nearly impossible for the same reasons. In the end, just because a number is in a spreadsheet does not mean that number is accurate or authentic.
It’s time to think about your budgeting process. Are you happy with it? Do you have the level of accuracy, quality and visibility needed to ensure trust in your process? Or are you at the other end of the spectrum, regularly missing external and internal reporting deadlines?