Data-Connected Excel Drives Finance-led Reporting

Published on
November 2, 2021

Unless you printed it out, most likely you’re reading this in a web browser.

You didn’t have to export or download anything to get it onto your phone or PC.

Web browsers are great because they provide a simple, accessible interface into content from multiple sources across the internet.

They don’t change or manipulate anything. They’re just a lens into HTML or XML data.

Finance professionals have traditionally lacked the equivalent of a web browser for Excel. Instead, the job of reporting financial data has often involved pulling data out of other tools into it.

With our recent acquisition of XLCubed, that all changes.

It means Fluence adds more than 750 XLCubed customers and 30 business partners. It brings us a substantial presence in Europe.

XLCubed acquisition brings Fluence 750 new customers on 6 contintents

Just as importantly, though, it means our existing customers gain what they’ve always wanted: the ability to conduct finance-led reporting—reporting that they can own and operate without help from IT or outside consultants.

This builds upon what we’ve already offered in terms of financial close and consolidation. As a result, Fluence becomes the only complete purpose-built finance platform for both mid-market to enterprise businesses.

To put the deal in context, let me explain three things:

  • The biggest historical barrier to maximizing finance’s use of technology
  • What we mean by finance-led reporting, and
  • Why it takes XLCubed’s data-connected approach to Excel to make it happen.

Why The ‘Stop Using Excel’ Argument Is Misguided

Most people would call Excel a software application.

A market research analyst might describe it as a productivity tool.

Those in finance know it as something else: a comfort zone.

I don’t mean this in an insulting way. So much of technology is overcomplicated and requires a steep learning curve to master. It’s why some of the best-intentioned tools suffer from lack of adoption.

Excel sits at the opposite end of that spectrum. Its design and capabilities act as a sort of virtuous circle. It goes like this:

  • Excel is easy to use, so:
  • Excel becomes familiar and approachable as a way to work with data, which means:
  • Excel helps people get tasks done by themselves on their own timeframes and without relying on IT, so that even if it’s not always the perfect fit:
  • Excel is easy to use, so finance professionals try to find a way to make it work.
The virtuous circle of Excel for finance

You’ve probably heard enough criticisms from technology experts discouraging the use of Excel in finance. Sometimes it might even feel like you’re being scolded.

How many of these lines sound familiar?

“Excel is not a database, and shouldn’t be treated as such.”

“You may love your spreadsheets, but there’s no version control.”

“How is anyone supposed to collaborate if you keep everything in Excel?”

In these kinds of conversations, it’s almost like finance professionals are being presented with a list of Excel pros and cons. The “cons” side of the list is long, and it feels as though people keep finding more to add.

“Let me say that again: finance knows and loves Excel!”

Here’s the thing: the “pro” side could be just one thing — finance knows and loves Excel. Let me say that again: finance knows and loves Excel! And for many, that could be enough, so why does this call to ditch spreadsheets never die down?

A Different Way to Think About Excel in Finance

There’s a simple answer that a lot of people don’t talk about. For decades now, corporate performance management (CPM) and business intelligence (BI) vendors have tried to convince their customers to abandon Excel. To adopt sophisticated software that provides the controls, auditability and other functionality that Excel lacks.

What happened in practice, and still does today, is that people continue to export CPM and BI data to Excel - defeating the very purpose of replacing it in the first place.

Despite all the changes we’ve seen in finance and accounting technology, exporting to Excel has remained a constant.

Just look at BPM Partners’ annual Pulse of Performance Management survey. For 18 years now, they’ve asked the same question: If you have a solution in place, do you still export to Excel? The usual answer is between 81% to 84% who say “yes.” That needle has not moved. At all.

If Excel represents finance’s comfort zone, maybe it’s only natural that they’re constantly told to change the way they work.

“Getting out of your comfort zone” is often a theme in self-help books. The idea is that by becoming uncomfortable you’ll force yourself to develop and grow.

That may be true when you’re trying to challenge yourself to master a new skill. It can be a good thing when you’re unable to brainstorm new ideas.

For those in finance, though, working in a way that’s comfortable can lead to greater confidence. Instead of struggling with the unknown, you can focus on what you do best by using the tools you know best.

That comfort zone could be the perfect place to usher in a new era of finance-led reporting.

The Market Gap in Traditional Financial Reporting

As I’ve noted in previous posts, organizations are moving to more frequent or even rolling forecasts for a reason. The pandemic may have marked a huge period of uncertainty, but it wasn’t the first and won’t be the last.

The only way to manage through uncertainty is advanced planning. This is hard to do for most organizations with their current consolidation, close and reporting process.

Let’s say you just got the month-end results for the previous month. That’s important data, but what if it’s currently the 15th day of the current month? It means you’re already falling behind in terms of the data you need to effectively plan. And every day this lag increases makes forecasting even harder. It’s more difficult to spot trends. Decision-making slows down.

It’s not like finance teams aren’t working hard enough. Often they’re putting in more hours than they should. They’re trying to pull in data from multiple sources, such as from their ERP or CRM. It might be stale data. It might not even be accurate data.

Then there’s the extra step of turning to the IT department to help with reporting. They might create something usable with a template, but the result might still be relatively static.

The irony in all this is that the CFO is often the most trusted person in most organizations after the CEO. Maintaining and leveraging that trust calls for a better approach to managing financial data.

This is finance-led reporting, whereby:

  • Finance can continue to use Excel, but connect it to the myriad sources of data they need.
  • The process can be quick and agile in a way that keeps pace with the business and the market.
  • Finance no longer has to rely on IT. Instead, they can easily create and amend their own interactive dashboards and reports.
  • By truly owning the reporting process, finance can provide greater insight. They can slice, dice and drill down into the data across multiple dimensions.
  • Ad-hoc reporting makes use of both financial and non-financial data.
  • The quality of financial reporting is based on principles that include transparency, control, scalability and collaboration.

Why Sticking With the Status Quo in Financial Reporting Is Not an Option

There’s long been a big gap between traditional reporting capabilities and the nirvana or finance-led reporting. The finance profession might have reasonably assumed they just had to live with that gap.

Here’s why that’s dangerous: it’s not just an organization’s leaders that have to have faith in their numbers. Third parties such as shareholders, investors and auditors demand it.

This is where putting numbers together every month using a series of disjointed Excel spreadsheets creates risk. The lack of security and a clear audit trail can raise big questions. Auditors have every right to ask who touched those spreadsheets and what they might have changed.

If you can’t answer, you’re in for a world of hurt. The worst-case scenario could be a material weakness. This is otherwise known as the kiss of death for a CFO’s career. The reputational damage also extends to the organization as a whole.

Mid-market companies may be at a loss at how to avoid these scenarios. After all, most of them grew up with legacy technology that has never meshed. These could include ERP or CRM systems that their IT department stood up some 15 years ago.

To offer truly finance-led reporting, meanwhile, teams should have tools with built-in financial awareness. They need a platform that understands the difference between a debit and a credit, for instance. Unlike a lot of traditional BI, they should be able to present balance sheets and income statements, double lines and all.

How XLCubed Uses Data-Connected Excel To Fuel Finance-Led Reporting

This brings us back to XLCubed, which has solved precisely these issues.

Rather than trying to force finance out of their Excel comfort zones, XLCubed offers a  full-featured, data-connected Excel interface.

This means that, rather than simply exporting everything to Excel, XLCubed acts somewhat akin to a Web browser. It’s a lens into all the sources of financial and non-financial data that’s critical for reporting.

Fluence and XLCubed turn Excel into a web browser for your most important data

When finance-led strategic reports become a core part of business reporting, users can publish them from Excel to the XLCubed/Fluence Web Portal, where a broader base of users can access them interactively within a fully governed and version controlled environment.

Published reports retain the data connection, can be accessed on any device, and are screen responsive. A financial analyst’s latest Excel dashboard can be made available interactively to the travelling CEO on his smartphone within seconds.

XLCubed interactive mobile dashboard reporting

XLCubed enables finance-led reporting that’s both interactive and dynamic. This comes via built-in libraries of financial calculations, templates and layout wizards. Automated distribution to PowerPoint, Word, web and mobile ensures everyone can get the access they need.

Making XLCubed part of Fluence not only allows us to help more mid-market to enterprise businesses quickly build professional, advanced reports and benefit from technology which many corporations have been using successfully for years. It transforms finance-led reporting from a conceptual ideal into an everyday reality.

Finally, finance can give business users the full story behind every number. They can do so in the way they need it on any device, at any time. Couple that with lightning-fast consolidation and close and better decision-making is almost inevitable.

Where Finance-Led Reporting Could Take Us

Finance-led reporting isn’t just a way to pursue improved business outcomes. It’s also a way to pursue improvements inside the business.

A team with finance-led reporting is a more empowered team. They see their needs and preferences being recognized by having the ability to connect data to Excel. Closing the books quickly leads to greater work/life balance at a time we all need it.

Get the close off your back with Fluence

That in turn means when they’re on the job, they’re more engaged. As a longtime business leader, I can tell you that healthy morale within finance spreads to other teams, too.

Much like the web browser allowed people to visit an unlimited number of web sites, data-connected Excel will connect mid-market companies to new ideas and opportunities -- maybe even more than could fit in a spreadsheet.

Michael Morrison
Fluence Technologies

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