Excel is an amazingly great application that has probably delivered more value than just about any other business software in the past 20 years. But as a platform for budgeting… well, it has some serious limitations.
Like wouldn’t it be nice to be able to spread budgets based on last year’s actual spending pattern? That spread would automatically reflect real world seasonality, and provide the Finance department with an infinitely better answer than “divide by 12”. Now, can you set up a budget spreadsheet that incorporates rows of prior year actual, one row for each account being budgeted? Sure. But there are reasons why people don’t actually do that today, namely it’s not practical. There are simply too many departments, too many accounts, too many rows of data. Too many chances for human error, it’s just plain too time consuming.
But if you could spread budgets based on last year’s actual spending pattern you’d probably get rid of the majority of “timing variances”. As a FP&A Manager at Pepsi, nothing was more frustrating than spending half a day tracking down the reason for a budget vs actual variance and discovering it was nothing but “timing”.
That is just one example of what would be great to have in a budgeting platform; but is impossible with Excel… or so impractical as to make it practically impossible.