You probably know that Excel is the world's most popular calculation software. However, does that necessarily mean that it should be the basis of financial management in a business? It's not an open and shut case, particularly because it's seen as not being sufficiently specialised for some aspects and may risk damaging the company in the long term.
When Excel is no longer suitable for a business
Although Excel is both a reliable and useful piece of software for carrying out a wide range of tasks, it can also prove to be disappointing if you're attempting to manage excessive volumes or if you try to meddle with it. In reality, many businesses encounter errors in formulas, gaps in lines and problems with file sizes and versions that waste a lot of time (and money too, sometimes) when managing a company's finances.
Although it's one of the most powerful pieces of software, Excel still has trouble managing high volumes of data.
Excel - an effective... but personal tool!
When you analyse the way that companies use Excel, particularly when they decide to use it for their financial management, you soon realise that an Excel spreadsheet is above all a personal tool. Although often saved on a network drive, an Excel file enables the production of cross-sectional analyses, spot checks and temporary dashboards but it's not designed to be a collaborative tool. It's very difficult for several people to work on the same document, there are frequent problems with versions, many are duplicates, etc.
The alternatives to Excel
Since Excel is clearly better suited to personal rather than collective uses, companies need to adapt their financial management tools to their own profiles. Thus, Excel can be kept for personal use but management software should be the preferred tool for collaborative working. In addition, this tool enables several people to work together on the same file, to track their actions and limit - or even completely eliminate - bugs and errors and above all guarantee data that is up-to-date and easily accessible. A business intelligence tool is ideal for regular presentation of a dashboard. Furthermore, unlike office software applications such as Excel, a business intelligence tool makes it possible to work on financial management and focus closely on the data contained in the file.
Yes, Excel is a powerful software application suitable for multiple tasks, but no, Excel is not adequate for complex, collective financial management. We should view Excel as a stand-in to be used when your other software does not meet your needs.