A budget plan is one of the most important tools for a company – it contains information about its condition and provides the basis for many different decisions. A solidly prepared company budget identifies available capital, estimates expenses and passes revenues. Although budgeting is a critical process for companies it is still manually managed. Find out why it is worth to move from traditional spreadsheets to the budgeting application!
Companies that use spreadsheets are extremely vulnerable to errors. Typos and mix-ups appear in almost 90% of business spreadsheets. As humans, we tend to rush and make simple mistakes that may put companies in serious trouble. One wrongly inserted piece of data can cost billions of dollars. No worries, though. There are various ways to minimize the risk of making such mistakes. One of them is the automation of the budgeting process.
Spreadsheets have been used for years – as a tool for financial planning, analysis or visualization. However, their effectiveness in managing varied and numerous data is often insufficient. Mistakes happen to everyone, even to trained and experienced employees – especially when they use many different data sources and formulas. Almost every spreadsheets user has experienced at least once problems with version numbering and mismatched results after making changes. Just entering the wrong number at the beginning of the process or copying the wrong formula may cause the entire calculation to be incorrect. Finished budget plans are usually controlled by superiors and other departments, but here too, human error can enter. Studies show that even the most accurately prepared and thoroughly checked spreadsheets contain errors in more than 1% of their formulas. They may result from a lack of consideration for important data or misuse of an algorithm. So, as you can see, the tool that is so popular among business people, has its many drawbacks and may cause mishaps.
A quick example – the recent big deal with Emerson construction company. The company estimated the value of one of their contracts to be about $ 3.7 million. However, it turned out that one cell in the spreadsheet (containing the cost of electrical work) hadn’t been included and the total cost was incorrect. Emerson submitted a bid $ 3 million lower than it should have. Such errors can result not only in a loss of the contract but even worse, with the company implementing an unprofitable project. If you giving yourself a scare, please visit the European Spreadsheet Risk Interest Group website, where you will find a rich list of such cases. Most of them were caused by human error and could have been avoided.
Spreadsheets will nonetheless remain a universal business language. They are easy to use and quite resourceful. You don’t have to give up on them to improve the quality of your analytical, planning and financial processes. However, instead of spreadsheets and the likes of it, you should consider a solution that doesn’t have their imperfections.
Awareness of spreadsheets’ limitations and excellent knowledge of financial departments’ needs has led Qalcwise platform developers to create an advanced business application that minimizes the risk of mistakes. The budgeting application is based on spreadsheets’ experience and intuitiveness, but it provides much more developed and flexible functionalities. It automates the process of creating and controlling the company’s budget, ensuring full transparency, security and data integrity.
Working with the application saves a lot of time – it not only speeds-up collecting budgets from various departments and preparing ready statements, but also, thanks to the built-in Workflow it enables easy managing of budget approvals. With smart built-in rules, Qalcwise eliminates the risk of errors such as overwriting data and typing incorrect formulas. It allows you to identify the author of each change and correct mistakes on a regular basis.
But these are not all of Qalcwise’s advantages over spreadsheets. An approved budget still requires constant controlling. Monitoring the implementation of the budget plan is extremely easy with the Qalcwise application. It integrates and closely follows order and invoice circulation, so you can track costs, revenues and the degree to which they have been implemented. All that in real-time. Thanks to data centralization, you have better control over the company’s budget and can react to deviations from it much faster.
As for data analysis, you no longer need a team of analysts – you can generate any cross-section report yourself. Thanks to the improved formulas you can find in Qalcwise, you will conduct advanced analyses without the help of analysts!
Another important thing is data accuracy. It’s crucial when it comes to making decisions based on a spreadsheet. Spreadsheets should be swapped for a simple and fast budgeting application that centralizes and integrates data, eliminates errors, improves the collaboration between departments and lets you view key information while making a decision. Qalcwise budgeting application is as simple as a spreadsheet, but without is weaknesses. The application is ready to use. Just take a moment to fit it to your needs.
(1) source: research of University of Hawaii’s College of Business Administration