Excel & Management Reporting

Excel & Management Reporting

Is Excel the right tool for management reporting?

Softworld Accounting & Finance 2 March 2005

John Stokdyk, Editor, AccountingWEB & IT Zonehttp://www.accountingweb.co.uk/itzone

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Hardware Web dev Accounts CPM &c

Agenda

• Prevalence of Excel in accountancy

• Microsoft’s Excel strategy in finance

• Pros & Cons: Flexibility v Control

• GIGO: Excel horror stories

• Handling data (imports & Pivot Tables)

• The Third Way: Excel under control

• Questions and answers


http://www.accountingweb.co.uk/itzone

AccountingWEB & Excel

• IT Zone survey results 2001-05

• David Carter’s Pivot Table tutorials

• Any Answers & Expert Guides

• Two of our all-time Top 10 on Excel

• ExcelZone – work in progress



Use of Excel for Acccounts

• Microsoft UK SME Manger: 40% use Excel

• Sage sees Line 50 user base eroding: 9% use Excel (11% in US according to Yankee Group)

• IT Zone survey: Steady increase to 9% in 2004

• When asked, 24% said Excel was secondary tool




Primarily use Excel for Accounts 2002-04

• 2004: 24% said Excel was secondary tool


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Microsoft’s strategy for Excel

• “We want Excel to become the interface… it will become the front-end for many financial components” - 2002

•“As Microsoft develops its new .NET technology architecture, Excel will carry many of the financial applications to business managers.” - 2003

• “Business Intelligence will be increasingly through tighter integration of Excel as the primary reporting client with SQL Reporting Services” – 2005





Use Excel for Budgeting/Forecasting

• 2004: 65% of those who budgeted used Excel

• 2005: 49% use Excel for management reporting

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What we like about Excel

• Graphics & Charts

• Flexibility

• Platform for powerful tools (& Games)

• Pivot Tables: “The most important development in IT since the original invention of the spreadsheet” – David Carter, 1999



Excel graphics/ingenuity – Cashflow Wizard



Excel flexibility – Data entry & calculators



Excel ingenuity – Footy Manager



You are the manager of: Wrexham Current League table P W L D F A

Pts

Division: Division 1 Coventry City 3 3 0 0 8 2 9

Burnley 3 3 0 0 6 2 9

Birmingham City 3 3 0 0 4 0 9

Week of season: 4 Hartlepool United 3 2 0 1 6 1 7

Bank Loan: £299,970 Grimsby Town 3 2 0 1 5 2 7

Cash: £1,765,180 QPR 3 2 0 1 3 1 7

Oldham Athletic 3 2 1 0 5 2 6

FA Cup status: You are in the 2nd round Charlton Athletic 3 2 1 0 7 5 6

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Excel ingenuity/flexibility – Pivot Table project planner





David Carter: The Pivot Table King

• 1999 Budgeting with Pivot Tables – more than 87,000 reads

• Sales analysis, Consolidation, working with Sage Line 50 data etc

• Project Planner “Reporting Challenge”

• Vendors and consultants: “Commerical solutions are better”

What we don’t like about Excel

• Error rates = 90%+

• Lack of control

• DIY time-wasting

• IT Zone users admit: commercial tools are better

• Inappropriate for storing data (use Access!)

• “One of the biggest holes in compliance occurs when business-critical information is held on spreadsheets,” Keith Bishop, Qtier 2005http://www.accountingweb.co.uk/itzone


Excel error horror stories

• University of Hawaii – on average 91% of business spreadsheets contain errors

• Findings mirrored by KPMG and PwC

•TransAlta took a C$24m charge in 2004 after a bidding mistake caused by an Excel cut/paste error

• $700m AIB Forex Fraud in 2001 – committed by Rusnak rigging bank risk assessment spreadsheet

• £30,000 hole in 2001 school budget =SUM flaw





Excel error horror: the £30,000 budget hole



Excel error horror: the £30,000 budget hole

• The values in two cells were entered as right aligned text values rather than as numbers

•The column to the right of the cells included a formula using the values - there was no indication of the problem.

• The total of the column containing the cells used the @sum formula. Sadly it was this lower total which rippled through to the budget submission.



• Ledgers devised by programmers for their uses – not management reporting

• Even with ODBC, identifying the right ledger tables is the biggest challenge

• Time is wasted tidying up the data

• Dates incorrect, need to use filtering, VLOOKUP, data check routines

• Why not create analysis-ready file?

Carter’s conundrum

Sage Line 50: analysis-ready file



ExFiles DataLink – Import/Export tool



Response from Accounting software vendors

• Sage & TAS collaborating with Carter

• Access Accounts – Analysis-ready file

• Raise it on your wishlists if you want to improve DIY management reporting

• Better mapping tools and Reporting Services will make it easierhttp://www.accountingweb.co.uk/itzone


Budgeting, forecasting & reporting

• Sage Financial Forecasting: 15% better user rating than DIY forecasting tools

• Budgeting: “Controlling a multi-site process is next to impossible” – Tim Ward

• Business plans: 20mins with Cashflow Wizard

• Reporting: CPM/OLAP databases & Crystal are better – but cost £££, nor as flexible as Excel

• The Third Way: Excel under controlhttp://www.accountingweb.co.uk/itzone


“Third Way” reporting tools at Softworld

• Sage IntelligentApps for Line 200/500• OpenAccounts Executive Desktop Reporting• SunSystems & Pegasus resellers: Vision/XRL• CODA Collaborative Close with .NET tools• Exchequer Enterprise – 2-way drill down• Access Dimensions/MS Office integration• Sage Line 50 Accounts Analyst• XL Cubed (OEM deal with Topaz Financials)• Newcomers Qtier, Dillon PROPHET – NB:• Don’t forget Microsoft Business Solutions…



Microsoft Business Solutions strategy

• Four ERP product families, plus Microsoft Business Solutions for Analytics – FRx• Integration with MS Outlook & Excel – they are the user interface• Business Intelligence a horizontal activity, driven by SQL Server Reporting Services • Big dent in the CPM business model: £50k tools are being supplied FREE!• Early days: Needs to be implemented by people who know what they’re doinghttp://www.accountingweb.co.uk/itzone


Excel: They can’t take it away from you

• Acceptance that Excel is here to stay• Users like its flexibility and limitless potential• Understand its limitations• Reporting processes are management, not technology issue: training, discipline, then tools• SOX &c rules mean spreadsheets without audit trails are not compliant• Watch for Microsoft Reporting Services tools• Reporting meltdown: Excel still rules!



Excel: Management reporting DOs and DON’Ts

• DON’T use Excel as a financial forecasting/budgeting or reporting database• DON’T use Excel for compliance reports• DO use Excel as a presentation tool• DO use trusted add-ins, eg Cashflow Wizard• DO use Excel audit and checking tools• DO document how reports/forecasts developed• DO use file names to track versions (if no other way)• DO keep an eye out for Microsoft Reporting Serviceshttp://www.accountingweb.co.uk/itzone


Questions

• What reporting tools are you looking for?

• Do you have a reporting tool strategy?

• Web deployability?



Excel & Management Reporting

Documents

Transcript of Excel & Management Reporting