For years, Excel has been the default tool for budgeting and planning. Its flexibility, familiarity, and widespread adoption make it an easy choice for finance professionals. However, as businesses grow in size and complexity, budgeting in Excel increasingly shows its limitations. Enterprise Performance Management (EPM) solutions are emerging as the modern answer to these challenges, offering the agility, scalability, and control that Excel often lacks.
If you’re still relying on spreadsheets, it may be time to evaluate how well they serve your organisation’s evolving financial planning needs. Here are the key signs that your budgeting process has outgrown Excel—and why EPM systems are in trend for leading organisations.
The Challenges of Budgeting in Excel
1. Complex Organisational Structures
Small businesses with simple structures can often manage their budgets effectively in Excel. But spreadsheets quickly become unwieldy when the organisational chart grows to include multiple cost centers, departments, or locations. Multi-sheet workbooks, cross-linked files, and manual consolidation lead to inefficiencies and errors.
EPM solutions eliminate this complexity. The system provides a central platform where all departments can collaborate seamlessly, without the risk of broken links or outdated data.
2. Too Many Contributors
Budgeting often requires input from stakeholders across different departments. Sales teams, cost centre managers, and other non-finance contributors might not have the expertise or discipline to maintain Excel’s data integrity. Errors introduced at this stage can ripple through the entire planning process.
EPM platforms solve this by offering user-friendly interfaces, integrated workflows, and robust version control, ensuring accuracy and accountability from all contributors.
3. Multiple Budget Iterations
A budget rarely gets approved on the first attempt. Most organisations go through several iterations, refining their forecasts based on changing assumptions or feedback from leadership. Tracking these changes in Excel can feel like navigating a maze, with little visibility into who made what changes and why.
Modern EPM systems include built-in audit trails and security controls, making it easy to manage revisions without losing track of the budgeting process.
4. The Need for Frequent Re-Forecasting
Budgeting is no longer an annual exercise for many organisations. Quarterly re-forecasting, or even monthly rolling forecasts, is becoming the norm. Excel’s static nature makes frequent updates cumbersome, often requiring entire workbooks to be rebuilt.
EPM tools are designed for agility, enabling organisations to adjust assumptions and re-forecast quickly without starting from scratch.
5. Complex Revenue Modeling
Organisations that budget down to specific customer or product groups often hit Excel’s limits. These models require detailed calculations across multiple dimensions, such as geography, seasonality, and pricing strategies.
EPM platforms are purpose-built to handle this level of complexity, offering advanced modelling capabilities that go far beyond Excel’s functionality.
6. Bottom-Up Budgeting Only
Excel inherently supports bottom-up budgeting, where every department builds its budget independently before rolling it into a consolidated view. While this approach sometimes works, many organisations benefit from top-down budgeting, where leadership sets high-level targets that cascade down.
EPM systems allow organisations to adopt a hybrid approach, balancing high-level strategic planning with detailed operational input.
7. Lack of Integration for Comprehensive Planning
A robust financial plan includes the income statement, balance sheet, and cash flow projections. In Excel, creating these additional forecasts often requires manual effort, increasing the chances of inconsistency.
EPM systems integrate these elements seamlessly, ensuring that cash flow and balance sheet forecasts automatically align with the income statement.
Why Enterprise Performance Management (EPM) is the Future
Enterprise Performance Management solutions offer a powerful alternative to traditional spreadsheet-based budgeting. Designed specifically for finance professionals, these tools combine the flexibility of Excel with advanced capabilities like:
• Multi-user collaboration: Allowing multiple contributors to work simultaneously without overwriting data.
• Integrated workflows: Streamlining approvals and reducing bottlenecks.
• Real-time data: Ensuring that all stakeholders work with the most current information.
• Advanced analytics: Providing insights into trends, variances, and opportunities that spreadsheets simply can’t deliver.
Letting Go of Excel
Many finance professionals are hesitant to move away from Excel. After years of fine-tuning complex models, it can feel like abandoning a trusted tool. However, clinging to outdated methods may hold your organisation back from achieving its full potential.
Transitioning to an EPM platform doesn’t mean leaving your expertise behind. Solutions like Workday Adaptive Planning allow you to build custom models with the same precision you’ve mastered in Excel—only faster, more securely, and collaboratively.
Conclusion
The financial landscape is evolving, and so are the tools available to manage it. While Excel will always have its place in certain tasks, enterprise performance management (EPM) systems are rapidly becoming the gold standard for budgeting and planning.
If your organisation faces the challenges outlined above, it’s time to explore what EPM can do for you. A modern solution not only streamlines your budgeting process but empowers you to focus on strategic decision-making—driving growth and value across your organisation.
Join us at the Workday Singapore Event, Advancing FP&A: A Focus on AI and Professional Development—reserve your spot today!
