When a finance executive needs information, the burden to provide it generally falls on financial analysts. They are responsible for taking all available data and using tools (probably Excel or Access) to turn that data into useful information in a “pleasing to the eye” format.
The task would not be overly daunting if the requests for information were always the same, if the look and feel of the report was not overly important, or if organizational structure and master data were not constantly changing. Unfortunately, that’s not the case. All of these items are constantly changing, making it challenging to fulfill requests for information quickly or easily.
In today’s world, it is probably safe to assume that financial analysts are proficient in Excel, if not an Excel guru. They would likely not have gotten through the first interview if they weren’t. That’s because many companies are still using Excel as their primary stand-alone reporting tool. The hiring manager knows that it will take an Excel guru to create and maintain the inevitably complicated reporting packages that will be needed to satisfy the thirst for information.
Currency conversion, inter-company eliminations and roll-forwards are just a few items that make consolidated reporting complicated. Excel data collection packages, pivot tables, v-lookup and index functions, VBA, large multi-sheet workbooks, links to other large multi-sheet workbooks — all of these are common ingredients in the Excel reporting recipe book. And things like broken links, corrupted calculations, hard-to-trust information, difficult-to-make changes, and requests for new information add to the challenge and may take days to address.
As a company grows, so do the Excel workbooks, getting larger and larger until it seems like adding one more tab will literally make the workbook explode — or more realistically, just freeze and shut down. In addition, when an analyst decides to leave the company, what is often left behind are complicated, undocumented files that no one knows how to use or understands. The successor will face a significant challenge in getting up to speed in a timely manner – and this assumes the analyst left on good terms and the files weren’t deleted or corrupted. This is a risky way to run a finance department.
There is a better way. With the right business planning and consolidation system, reporting in a dynamic, changing environment can be much easier, with much less risk. A properly implemented business planning and consolidation system like SAP BPC makes it much easier to collect data from multiple sources and turn it into useful information. Here are a few reasons:
- It’s Online – This sounds simple, but a centrally maintained system that’s documented and backed up on a regular basis reduces risk significantly. In addition, having one source of data for consolidated or standard reporting provides that single version of the truth we’ve all heard so much about.
- Simplified Master Data maintenance – Master data for things like account, company, or cost center can be hard to maintain in offline “systems.” SAP BPC is flexible enough to set up automated master data imports, so it updates along with a source system. Or if you decide to maintain it manually, the interface is intuitive and easy to use.
- Single, “Analytical” chart of accounts – Whether it is actual data for a consolidation, or forward-looking data for a plan/budget, the account dimension in an SAP BPC system generally does not have to contain all of the operational detail that is in a general ledger system. For instance, while a local GL may contain a “cash” account for every bank account, there may be a “revenue” account for each line of business. For reporting purposes these can likely be narrowed down to one cash account and one revenue account for consolidated reporting and to reduce the “clutter” associated with local GL charts of accounts. It’s your decision: if you want the detail, you can have it; if not, you don’t need to have the detail.
- Automated critical calculations – Simple scripts and business rules make things like currency translation, inter-company elimination and balance sheet roll-forwards quick and straight-forward.
- EPM Reporting Interface – The EPM add-in for Excel is as intuitive and easy to use as a reporting interface gets. Here are a few specific EPM features that help facilitate easy reporting:
- Drag & Drop – Building a quick ad hoc report is easy with the drag & drop feature. A frame can literally be built in less than a minute with single or multiple dimensions on the rows and columns.
- Report Wizard – For more complicated reports, an intuitive interface is available to build and position your report exactly where you want it to go. Options are available for dynamic formulas, formatting, sorting, filtering, and much more. Charts can be built to dynamically change when report data is updated.
- Dynamic Formatting Sheet – An intuitive formatting interface is available so you can build templates with standard formatting. No more guesswork or trying to remember how your standard reports should be formatted. In addition, for dynamic reports where users are drilling down for additional detail, the formatting will adjust and expand right along with the drill-down.
- Dynamic Calculations – Want to calculate Gross Margin %? Or Operating Income %? Any multitude of variance calculations? Using EPM Local Members, formulas like this can be attached to a report, so if a user decides to drill down, or change the company or cost center they want to see, the calculation will change right along with them.
- Report Publication – Using the book publication wizard, easily take your standard report and publish it for an entire group of Companies, Cost Centers, Profit Centers, or whatever you need.
With an EPM system, even an intermediate-level Excel user will be able to create and maintain reports with ease. With a report wizard, drag-and-drop interface, or one of the many available EPM functions, there are flexible options for building ad hoc or standard reports that get published monthly. An intuitive formatting tool can provide identical controls, without the need to build them from scratch every time.