Now that budget season is over, it’s time to reflect on the effort taken to complete the task and to challenge the status quo. For many financial planning and analysis (FP&A) professionals, it can be a grueling and rote activity as described in my previous blog post, Avoid the Budget Season Blues. If your company still has a spreadsheet-based budgeting process, your FP&A team likely spent a lot of time on the following:
- reconciling data to prior period reports such as P&L by cost center
- keying in or copying/pasting data for analysis
- writing formulas in Excel
- using pivot tables
- reviewing and testing to eliminate errors and validate results
- consolidating multiple spreadsheets from various cost centers (watch out for those formula errors!)
There is significant opportunity cost associated with spreadsheet planning not only in the time it takes to budget but also in not fully leveraging the business acumen and capabilities of the FP&A staff.
All of these skills are required in the majority of FP&A positions but it begs the question, “Do they add value to the organization?” Generally speaking, they do not. In my previous roles in corporate FP&A, I found the process to be a time drain that diverted me from more fully impacting the business for the better. There is significant opportunity cost associated with spreadsheet planning not only in the time it takes to budget but also in not fully leveraging the business acumen and capabilities of the FP&A staff. In my experience, finance professionals would prefer to focus on analyzing the numbers and providing answers to more strategic issues.