REVOLUTIONALISING CORPORATE BUDGETING WITH EXCEL
Why use Excel for Corporate Budgeting?
In recent years, there have been numerous calls for company to move away from
Excel-based Corporate Budgeting to Business Performance Management/ Business Intelligence (BPM/BI)
systems. Reasons cited include:
- Slow throughput time due to the complexity of the budget.
- Challenges in maintaining data accuracy during consolidation.
Despite the repeated summons to move away from Excel-based Corporate Budgeting, today about
70% to 80% of all corporations (from big corporations to small companies)
continue to make use of Excel for their budgeting. So what makes these budget
managers stand behind Excel and remain loyal to using it as their primary
The 6 Benefits of Using Excel for Budgeting
The current method of Excel budgeting is not without constraints. However, the
advantages for using Excel as a primary corporate budgeting tool overshadow its limitations.
- Excel provides budget managers with a lot of control on the format of the template.
Budget managers can change the layout of template when the business environment changes.
With a BMP/BI system, budget managers have to give up the control to design a
template that meets their business needs.
- Budget contributors are familiar with Excel spreadsheet that requires no or minimum
training to complete the template. However, they are usually too involved in their
operations to find time to learn another application which is used only a few
times a year.
- Budget managers and contributors could add new worksheets to store their workings
and provide an audit trail on the basis for their budgeting numbers.
- The number of people involved in the budgeting process is not limited by the
number of licenses paid. Anybody who owns a copy of Microsoft Office can be
involved in the process.
- Companies do not have to constant upgrade their software so that it will work with
the latest operating system.
- It is expensive to own a BMP/BI, which cost at least $50K (conservative estimate)
and beyond, not to mention that IT support staffs are usually required in
maintaining the system. Using Excel for corporate budgeting would relieve the company
the problem of finding IT staff to maintain the BMP/BI system in the midst of
a worldwide IT staff shortage.
Limitations in the current method of Excel Budgeting
One of the key limitations in Excel-based Corporate Budgeting is in reporting. Consolidation
of budget from various business units are usually done by summing the same
expenses across worksheets, with each worksheet dedicated to each business
unit. As a result, the detailed numbers submitted by the different business
units are not readily available for analysis. While the data from individual
business units are available in the respective worksheets, extracting the
details require budget managers to link the cells to another new worksheet.
The heavy cell linking increase the likelihood of having broken links between
worksheets and workbooks or newly added rows/columns not covering the ranges
the formulations expect. These errors, once introduced, tend to proliferate
and compound through the model. As such, budget managers have to spend extra
time checking on the consolidated numbers to ensure that the final numbers
presented tie to the submission and none of them are left out in the process
Budget managers also face a big challenge when there is a need to present the
budget in different perspectives. For example, a budget manager in a retail
company may need to get the budget endorsed by the channel manager as well
as the product manager. The budget template can only prepare the budget
based on the perspective of either managers but not both. To make sure that
the budget gets the endorsement of both managers, the budget manager then
has to develop the basic template based on the perspective of one of the
managers and then re-construct the final output based on the other manager's
requirements. The effort to prepare the budget is therefore doubled.
Revolutionary Breakthrough in Excel Budgeting
At the present moment, there is no other alternative software that could
match the benefits brought by excel in budgeting. Budget managers assume
they have to operate within the limitations of Excel if they want to continue
using it as their budgeting tool.
Now, we have developed a revolutionary method of Excel-based Corporate Budgeting
that we promise
that will wow budget managers and make them want to lay their hands on. We believe
it's a solution that every budget manager must know, even those who are currently
In this revolutionary solution, we retain all the benefits contained in the
current method of Excel Budget. We just added more benefits and also remove
the limitations contained in the current method of budgeting.
To find out more, drop us an email at firstname.lastname@example.org.
- Those who are working on the budgets do not have to follow strictly to the
layout by the budget managers. They can change the sequence of the budgeting
lines based on their preference. They could put advertising cost on the first
line in the template followed by marketing cost and vice versa.
- You can easily transfer the budgeted numbers from the template to another
worksheet and form a database simply by using formula. The database can be used
to create pivot table for analysis and reporting.
- Analyze the budget numbers from different perspectives. You can analyze them
by products, by channels, etc.
- Prepare reports and charts by special links which don't have to worry which
line the item is located. And even when the item changes row or columns, you
will still get the right numbers for your report.
- No loss of details during the process of consolidation. The details from the
lowest level i.e. numbers submitted by the different business units are captured
into the consolidated database. The consolidation will automatically update the
budget numbers from different business units, add new rows, delete old items and
also change the numbers as the numbers in the template changes.
- Consolidation can be as quick as a few seconds to a few minutes, depending
on the number of business units you need to consolidate.
- Analysis can be done at the highest level with the lowest level of details.
For example, you can analyze staff cost by departments or even on a country level.
You can even prepare pie charts to show the contribution from the different
business units or countries.