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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
Excel & Management Reporting
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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
Excel & Management Reporting
http://www.accountingweb.co.uk/itzone
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
Excel & Management Reporting
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Excel & Management Reporting
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
Excel & Management Reporting
http://www.accountingweb.co.uk/itzone
http://www.accountingweb.co.uk/itzone
Excel & Management Reporting
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
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Excel & Management Reporting
Excel graphics/ingenuity – Cashflow Wizard
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Excel & Management Reporting
Excel flexibility – Data entry & calculators
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Excel & Management Reporting
Excel ingenuity – Footy Manager
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Excel & Management Reporting
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
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Excel & Management Reporting
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Excel & Management Reporting
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 & Management Reporting
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
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Excel & Management Reporting
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Excel & Management Reporting
Excel error horror: the £30,000 budget hole
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Excel & Management Reporting
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.
http://www.accountingweb.co.uk/itzone
Excel & Management Reporting
• 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
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Excel & Management Reporting
ExFiles DataLink – Import/Export tool
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Excel & Management Reporting
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
Excel & Management Reporting
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
Excel & Management Reporting
“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…
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Excel & Management Reporting
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 & Management Reporting
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!
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Excel & Management Reporting
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
Excel & Management Reporting
Questions
• What reporting tools are you looking for?
• Do you have a reporting tool strategy?
• Web deployability?
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Excel & Management Reporting