Corporate financial planning and analysis teams (FP&A) have a tough task. The typical FP&A team faces tight deadlines to complete monthly close reports and provide CFOs with insights to inform future budgets. Data usually flows in late, delaying processes, and insights can be hard to derive.A raft of new tools has arrived on the market, with some positioning themselves as an FP&A solution for Excel users. While Excel remains the best tool to record and prepare data, new technology augments Exel usage immensely.
Given the central role in finance that Excel plays, any future-leaning FP&A solution must not only integrate with Excel but also augment its functionality. In no particular order, here are three FP&A app features that all Excel users must have.
Connecting Multiple Data Sources
One of Excel’s weaknesses is integrating and assimilating data from different sources. The average FP&A team relies on shared files that get messy in a hurry. It’s tough to track data changes when multiple hands are stirring the pot. The result is formatting errors, incomplete data, and time-consuming follow-ups that don’t lead anywhere.
A good FP&A solution simplifies data preparation by connecting an organization’s multiple data sources. Instead of manually uploading data to a single spreadsheet, new solutions can automatically pull and clean data from these external sources. The best part of these solutions is that formatting and duplicate data are automatically taken care of, preventing any need for clerical work.
The FP&A team can then focus on value-added tasks like analyzing data for projections and modeling cash flow. Best of all, these tools integrate with Excel, resulting in analysts never having to leave their trusted spreadsheet templates and formulas. By augmenting, rather than competing with Excel, new FP&A tools make a finance team’s life much easier.
Incorporating Dynamic Data
Receiving real-time updates into Excel is often a painful task that requires tremendous technical input. Analysts find that using static data allows them to produce better work, since they sidestep the technical difficulties that dynamic data feed integrations can bring.
Thus, any reports analysts produce are static and can potentially produce more questions than they answer. If questions remain unaddressed, then further meetings will generally be necessary. New FP&A tools help prevent these scenarios by giving analysts the option to create visually-rich dashboards with dynamic data.
These reports update automatically as relevant data flows in, making it simple to answer questions on the fly by running ad-hoc reports. For instance, if a debt financing report takes the company’s current stock price into account, all parties can view the effects of real-time price fluctuations. Dynamic data integration of this sort produces deeper insights and also builds flexibility into reporting processes.
The monthly close report is a good example of this. Currently, teams that solely use Excel are forced to wait until all data is received before preparing their reports. This situation leads to delays and incorrect projections.
Instead, an FP&A solution can incorporate data into standard fields as it becomes available. Analysts can create their report structures and view updates automatically entering them. Thus, report creation is simple, and insights can be delivered quickly.
Intuitive Scenario Modeling
A common stumbling block that challenges FP&A teams is answering “what-if” questions in presentations and reports. Often, stakeholders will question the effect of some variable on overall results or wish to stress test current projections. When presenting an Excel report, ad-hoc querying is a tough task.
New FP&A solutions integrate with Excel and allow analysts to drill deep into their data on the fly. Best of all, analysts can remain within Excel or use the software platform to create visually-rich reports in real-time. For instance, they can create a chart demonstrating the results of stress testing the cost of capital on budget projections and cash flow.
Thanks to these features, CFOs will receive better insight to plan their cash flow and create better financial projections. Most next-generation FP&A software products allow analysts to create sophisticated financial projections and models that incorporate many variables.
Add to this the dynamic data integration functionality, and it’s easy to see the amount of value such solutions unlock. Corporations can save time and money thanks to avoiding incessant follow-up meetings and emails asking questions.
Another benefit these solutions offer is that anyone with a financial background can run reports on a self-service basis. There is no need to send requests to IT team members to retrieve data and format it in a business-friendly manner. Analysts and executives can create personalized data views within Excel and dig deeper into data as they like.
Modern FP&A solutions offer excellent benefits for finance teams. They remove the need for clerical work and free an analyst’s time considerably. The result is a focus on value-added work that generates more insights for the corporation. Company executives will find that the features highlighted in this article are essential in any FP&A solution and will generate massive RO