At Forecast 5 we often hear – “We use spreadsheets to do our budgeting and forecasting.”
Do they know that the time taken to program spreadsheets is better spent reviewing the results, knowing all the calculations have been done for you in Forecast 5?
And when the errors become evident, and the lack of cash caused by mistaken decision making based on flawed Spreadsheet models comes to light, people and businesses suffer.
The truth is most business failures are cashflow related. And you can’t get an accurate cashflow from spreadsheets as the subtlety of record-by-record cashflow is too complex to program in Spreadsheets, And you can’t validate the overall integrity of the model by balancing between the Balance Sheet and Funds Flow Statement
Just consider these comments:
- Such forecasts are often prepared in spreadsheets – but spreadsheets are notoriously error-prone
ICAEW - (Institute of Chartered Accountants of England and Wales) -here - A spreadsheet of any magnitude can be daunting to review, with perhaps thousands of formulas
ICAEW - (Institute of Chartered Accountants of England and Wales) - here - Fifteen years of research studies have concluded unanimously that spreadsheeterrors are both common and non-trivial
Cornell University, Professor Panko - here. - Despite strong evidence of widespread errors, spreadsheet developers rarely subject their spreadsheets to post-development testing to reduce errors. This may be because spreadsheet developers are overconfident in the accuracy of their spreadsheets
Cornell University, Professor Panko - here - Microsoft's Excel Might Be The Most Dangerous Software On The Planet
from Forbes.
Forecast 5, in contrast, provides the following benefits that aren't available in spreadsheets
Forecast 5, in contrast, provides the following benefits that aren't available in spreadsheets
- Forecast 5 is based on a double-entry type architecture, meaning the main reports balance and the user doesn’t have to go chasing down which of thousands of formulae may be corrupt.
- By balancing the main reports – Balance Sheet, Profit and Loss Account, Cashflow and Funds Flow statements – you prove the integrity of the whole forecasting model.
- Effectively, there is an audit trail for each year of the forecast between the Profit (or Loss) to the Balance Sheet and to the Funds Flow Statement, whilst the bottom line of the Funds Flow Statement proves the Cashflow and the bank movements on the Balance Sheet. (I have yet to see a spreadsheet based forecast that can provide such assurance!).
- Forecast 5 integrates with a wide range of accounting products, e.g. Xero, Sage 50, Sage 200, SAP B1, Acumatica, etc., facilitating the integration of Actual results into Forecast 5 at a key stroke
- There are further integrations on the cards, and Actuals can also simply be entered into Forecast 5 via a conduit, if the accounting package is not one currently supported by Forecast 5 for auto integration.
- If Actuals suggest to the Board that future expectations should be trimmed or increased, reforecasting is straightforward and quick.
- These main reports (Balance Sheet, Profit and Loss Account, Cashflow and Funds Flow statements) - can be easily printed to board quality standard, supported by auxiliary reports such as Variance Analysis, Rolling Forecasts, Employee Statements – providing absolutely essential monthly management information; and the reports are generated fast, accurately and the FD or CFO can have confidence when delivering the numbers from Forecast 5 to the Board.
- Once set up, additional monthly reports can be downloaded quickly and reliably to the template for the Board’s attention.
- Forecast 5’s input variables are extensive, allowing just about any financing situation to be modelled simply and reliably.
- Consolidations are easily handled, including elimination of minority interest and inter-company profits and losses, set off of intercompany loans and depreciation of goodwill. And there is no limit on the amount of companies that may be consolidated;
- Dashboards from Forecast 5 summarise the essential figures from the database in graphical, easy to understand numbers.
Plus, there are a whole host of other features available in Forecast 5 – as a quick review of our website will show.
In a nutshell why don’t you use software developed specifically to do budgeting and forecasting instead of trying to replicate what we already do and with a proven track record.
Take the next step and get a free 21-day trial, join us on an introductory webinar or get in touch for more information!
Photo provided by Daydreamers Media, from Pond5
