3 Best Practices in the Use of Excel within Finance Processes

Excel continues to be used within finance departments. On the one hand, it is completely understandable because Excel was and still is a powerful tool capable of doing great things. On the other hand, the continued use of excel even in less ideal circumstances can perhaps be brought about by inexperience with financial tools. There are tools that at first glance might intimidate those that are not familiar with it. HOWEVER, in reality, some of these tools are really user-friendly like Epicor Financial Planner and the other aspect that might contribute to the continued use of Excel is just pure human nature of resisting change.

Just to be clear in our position – Excel can be used in a corporate setting albeit in a restricted manner. The harsh reality pointed out by many of excel breaking models, having security issues, not aiding business agility, and not allowing effective team collaboration still hold true. However, for certain aspects of finance processes, Excel can still fulfill its purpose.

Below are 3 best practices in using Excel for your organization.

It is worth mentioning though that tools like EFP have built-in modeling and simulation activities that will eliminate the need to have to do this in Excel. It will make your life easier but then again, if you aren´t ready to move away from Excel, that is fine too but something you should keep in mind.

  1. Use Excel for isolated tasks
    • If we are talking about having a tool that will support the very backbone of your financial process, Excel shouldn´t be that. You are better off with a unified reporting and budgeting tool like EFP that can streamline and automate your process from end to end. However, tasks like manual journal entries, sub-ledgers, prepaid expenses, deferred revenue, and support schedules can work well with Excel. As long as you base all of these activities in your primary financial system, Excel can be used in these examples.
  2. Use Excel for ad hoc reporting
    • It is completely ok to use Excel as a tool for accepting data exports from your financial system so you can do off-module analyses, modeling, and simulations. Again, if we are talking about a single version of the truth across the organization, it must come from a system that can store all of your data effectively.
  3. Use Excel for Ancillary reporting
    • There are several accounting systems that have their own native reporting abilities but as they say – old habits die hard. Some controllers like doing things in Excel because it is familiar and it is the evil they know. Reconciliations, period-end reports, looking at forecast scenarios, and other forward-looking reports can be done in Excel too.

One thing to remember though is that EFP allows automated reconciliations, comparison of past and forward looking scenarios, and automation of reports among other things. Excel can do similar things but never in the same efficiency and accuracy as EFP because it has built-in self-check mechanisms. It is really just about learning how to use EFP which isn´t that hard if you are a finance personnel.

The main point of this is that there are certain tasks where Excel can work very well but to look for the single truth and that backbone of your finance process within Excel is not right. It must be done through a robust system like EFP.

Have a look at EFP for free and see if it might be something for your organization. No commitments attached, just have a look at it. You might like it more than you think you would.

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