The 5 Pitfalls of Using Spreadsheets for Budgeting that can Stunt Your Growth
Why Your Business Needs an Advanced Budgetary Control Solution
By: Rich Uphus | August 22, 2023
ARTICLE — Using spreadsheets for budgeting is a common practice for many businesses. However, this manual approach can be time-consuming and prone to errors, hindering your business growth. According to a survey by Ventana Research, 49% of companies still rely on spreadsheets for budgeting despite the availability of specialized budgeting tools. Here are some statistics that highlight the pitfalls of using spreadsheets for budgeting:
- Time-consuming process
Managing spreadsheets can consume much staff time, particularly as the business grows. According to a survey by McKinsey, financial executives spend 50-70% of their time collecting and organizing data, leaving less time for analysis and strategy development.
- Errors in accounting records
Using spreadsheets for budgeting can create discrepancies between the budget and actual expenditures. According to a study by Ventana Research, 68% of companies that use spreadsheets for budgeting encounter errors in their data.
- Lack of real-time visibility
Spreadsheets do not provide real-time visibility or control over expenditures, which can be a problem during tough times. According to a study by Aberdeen Group, companies that implement automated budgeting and forecasting experience a 29% improvement in their ability to manage their cash flow and a 23% improvement in their ability to manage their working capital.
- Inability to prevent out-of-budget situations
Spreadsheets do not have any mechanism for alerting purchasers that their requisition or purchase order will result in an out-of-budget situation. According to a study by APQC, companies that use automated budgeting and forecasting are 50% more likely to be able to adjust their plans quickly to respond to changing business conditions.
- Hinders business growth
Using spreadsheets for budgeting is an outdated and manual approach that can hinder business growth. According to a study by Accenture, companies that automate their budgeting and forecasting processes save an average of 3.6% on their operating expenses.
Implementing an advanced budgetary control solution integrated with your ERP system can help you overcome the pitfalls of using spreadsheets for budgeting. PyanGo Budgetary Control for NetSuite is a comprehensive solution that can help your business achieve better financial insights, improve cash flow management, respond quickly to market changes, strengthen relationships with management and investors, save time, and reduce costs.
Automated budgetary control solutions provide real-time visibility and control over expenditures, reduce errors in accounting records, prevent out-of-budget situations, and free up valuable staff time for analysis and strategy development.
Using spreadsheets for budgeting is a manual approach that can be time-consuming and prone to errors, hindering your business growth. Migrating to an advanced budgetary control solution is critical for organizations to manage their expenditures and budget performance tightly. According to a study by Gartner, companies that implement automated budgeting and forecasting can reduce budget cycle times by up to 70%.
Click here to schedule an online product demonstration.
- Time-consuming process