“It's an Excel world, we just live in it” – so true! Despite various alternatives coming into play to ease data-intensive tasks for us, it's not wrong to say Excel is the champion. Be it any industry, any function, from project planning to sales planning to financial planning, Excel makes our lives easy by its plethora of tools and functions – sorting, formulating, extrapolating, and whatnot.
But then, even Santa comes with a Clause, and with all its wonders Excel can still make you end up with hours of monotonous manual data plugging, repetitive procedures, and the risk of an error being the biggest nightmare in that intensive spreadsheet.
Unless you decide to go for a financial planning software that solves this problem and has automation features included with many more extras that can make your life easier. But first, let's dive deeper into the Excel world.
What is Excel automation?
Excel automation, exactly like it sounds, equips you with tools to automate tasks, reduce manual hours and brain drain, significantly reduce repetition and risk of errors. Simply put, helps you be more efficient. In addition to aiding technical workflow, it also automates generalized tasks such as formatting (creating good-looking spreadsheets is an art!), saving a file in a specific format with a particular naming pattern, and migration and integration of data to/from other programs.
All this can happen with a click and the biggest benefit yet might be the ability to smoothly transfer the responsibility of tasks to another teammate or colleague – with that one click they can take your place while you are on vacation and produce the same quality reports without having to reinvent the wheel!
Excel Automation as a Financial Planning Tool
Let's map Excel automation in the financial workflow context. Various forms of financial analysis are conducted to help in informed decision-making. These include different forms of reports, budgets, financial forecasts, financial models, etc. All of which require working on huge data sets. Here excel automation can be leveraged to streamline these processes, and simplify what might be otherwise complicated, time-consuming, repetitive, and hence error-prone procedures. Imagine simplifying the budget forecasting process by generating the payroll budget with a click!
Time to get into technical details. Excel comes with functions that simplify any process by performing pre-specified tasks to arrive at an output once the command has been run. A good example is that of arriving at a project’s NPV with the input of a simple formula and the required variables, which if done manually needs to follow a lengthy series of steps. Below are some of the automation tools that further up the game and save an immense amount of effort and time for the user – Macros, VBAs and RPAs.
Macros help to automate repetitive tasks performed in Excel. They are a recorded series of actions or a recorded process that is taken to arrive at an output. Repeatedly used functions can be recorded as a sequence of tasks and then run with a single click. For example, you can feed in the inventory recording pattern as a series of functions, and then while forecasting for a purchase order, or making projections for next year’s budget, you can skip all the working, let the recorded macro do all the number crunching and arrive at the numbers you want to feed into your forecast. You can record a macro simply by going to Tools → Macro → Record New Macro and even assign a shortcut key to it.
Looking from another perspective this might even help with a policy control angle. Once specified, the sequence remains unchanged for that particular macro command. A difference in the balances from your excel and a real-time inventory count can flag the possibility that something in the inventory handling has been done differently and timely action can be taken whether to correct a discrepancy or to update your financial workings. However, rigidity towards following the fed sequence of commands can be a downside of recorded macros, and hence its application in situations that require variations in their sequence of steps does not hold relevant.
The programming language that runs macros and excels functions is called VBA or Visual Basic for Applications. VBA can be used to create macros for more complicated workings that require custom logic and adjust the process to take a different sequence based on the outcome of previous steps. This curbs the limitation of Macros to be able to follow only the prescribed functions in the prescribed sequence. This also makes VBA a powerful tool in financial modeling where several iterations related to assumptions need to be taken into account to create a practical and relevant model.
Creating bespoke macros using VBA is a more specialized task but can be done on your computer or outsourced to an expert. A VBA program is written in a module (a specific workbook page) in the VBA editor. Depending on the Excel version you use, the VBA editor can be found either as an icon in the Developer tab or you can go to Tools → Macro → VBE. Here you can create, read, edit and save macros. After saving a macro code, it is important to determine which variables trigger the model output. Incorporating the requisite variables into the macro then generates the output. These outputs can then be used as an added data-set, expressed in different graphical or visual formats to easily comprehend the data or just ultimately be used for informed decision-making. From a financial modeling perspective, you arrive at the outputs automated based on outcomes of logical patterns of data coded using the VBA tool.
Another game-changer in the world of excel automation is RPA or Robotic Process Automation. As the name suggests, RPA is getting software robots to do work that is tedious and repetitive instead of people. It is one of the more exciting finance software technologies in today’s finance and accounting landscape. The benefits of RPA are its ability to eliminate voluminous legwork for employees and even perform more advanced tasks such as automated auditing, account reconciliations, invoice handling, improved financial reporting, etc depending on the specific use case.
Software robots that are a product of the RPA technology depict the same actions as a person in understanding information in front of them on a screen. Like mimicking the correct sequence of keystrokes, navigating, categorizing, and extracting data, and executing a range of actions that have been pre-defined. The same work is done much faster, more consistently, and hence more productively.
However, where the RPA technology relieves people of mundane everyday tasks, the human role is crucial in its maintenance, resolving issues that robots are not capable of doing themselves, and ensuring its working right. It's always important to be aware of both the inherent advantages and drawbacks of any system, recognize missed opportunities, and fill the gaps to materialize more improved systems.
Leveraging technology with Financial Planning Software
Even though excel automation has many benefits for finance teams, the best option for finance teams is finding a solution that leverages technology and improves financial workflows. There exists another solution that englobes all the benefits of excel automation tools with some interesting extras. That is financial planning software, that not only has automation features but also enables financial analysts to enjoy better collaboration and reporting.
No matter which way you decide to go, there are many reasons to decide to improve your financial workflows. Either staying in Excel and going through the steep learning curve of the automation solutions, or directly going for a financial planning software that has some learning curve but also offers other things on top the incredible automation features.
The benefits of automation are clearly evident from what was just explained. And to summarize, excel automation boosts productivity, improves efficiency, helps with better resourcing of people and skills, and most of all it leaves time for humans to use their talents for more purposeful activities.
With Abacum, we empower finance teams to become true strategic partners in the organization by driving time-to-insight with powerful automation and seamless collaboration. Request a demo now to see the product live and start your own journey.