May 4, 2022   |  Read time: 5 minutes

CFOs often say their biggest fear is saying “yes” to the wrong thing. They’re concerned that making a big change or integrating a system that ends up causing more harm than good will cost their companies millions of dollars.

But CFOs rarely consider the ramifications of saying “no.” What if they say “no” to the right thing? What is the cost of missing out on an opportunity?

Here are some examples of the cost of saying “no”:

Cost of saying “no” and continuing to leverage a financial reporting system that:

Has a steep learning curve

Over the years, companies have lost millions and even billions of dollars due to Excel spreadsheet errors because they said “no” to adopting modern financial planning, analysis, and reporting tools.

Despite the evidence that Excel is error-prone and inefficient, and that using it can result in massive financial losses to their organizations, many CFOs continue to use the spreadsheet because it’s familiar.

However, even though CFOs continue to stick with it, Excel was never meant to be used as a “strategic, mission-critical enterprise application” and it was never designed for reporting. As such, CFOs who continue to use Excel for reporting purposes are creating significant risks for their organizations, opening them up to massive losses.

Excel is a complicated program with hundreds of capabilities and features, so it takes a lot of time to manage and analyze data, as well as create reports. Additionally, Excel cannot reliably represent the financial reporting facts because it’s capable of creating numerous versions of the truth.

Also, Excel is difficult to scale up for financial reporting and creates issues with consolidation and distribution. But it’s not only untrained or new employees who have issues working with Excel. Even experienced finance professionals are forced to spend a lot of time managing Excel spreadsheets for financial processes because it’s a complicated program.

Not too many CFOs and their finance teams relish the idea of spending weeks consolidating numerous departmental plans into one master plan or trying to create frequent rolling forecasts to meet the needs of the business.

And it takes an enormous amount of time to get Excel reports ready to file with the U.S. Securities and Exchange Commission (SEC), as well as share with auditors and a firm’s board of directors — time that takes the CFO (and their team) away from value-added work.

Requires outside consultants to build financial reports of value

Since Excel was never designed for reporting, CFOs often need outside consultants to help prepare accurate financial reports. Outside consultants can help CFOs review their daily operations and prepare reports for management as well as the SEC. An outside consultant can also help CFOs put reliable reporting systems in place and provide the information they need to make critical business decisions.

But consultants don’t come cheap. Fees for consulting services typically run between $150 to $500 per hour per consultant. And even though an organization may only need the services of one consultant, some consulting firms may include a minimum team size – for example requiring the addition of a manager – which boosts the cost of the engagement.

Has no customer support so employees have to log dozens of hours of troubleshooting

While organizations may be able to tap technical support, there are limitations. Most technical support stops short of investigating the cause of an issue. The onus is on the company to troubleshoot or investigate when spreadsheets stop responding, crash, or experience other performance issues.

That means finance team members have to spend dozens of hours troubleshooting issues with Excel — hours when they could be doing work that adds value to the company.

When Excel stops working, freezes, or throws error messages, it disrupts the flow of employees’ work and costs the business money. The ability to easily troubleshoot Excel would reduce the issue of human error, but spreadsheets aren’t built for online collaboration and related data is often spread throughout various departments across multiple spreadsheets.

Even if an employee could find every related data file, identifying an error in a formula through related cells is exceedingly time-consuming. The inability to troubleshoot can be quite costly to an organization if leaders make critical business decisions using questionable data.

A system that doesn’t integrate well with other systems and requires a lot of manual inputting

Most organizations rely on numerous systems to help manage and streamline certain departmental processes, such as enterprise resource planning systems for transactions and accounting data, as well as customer resource management systems to manage customer data, sales pipelines, and bookings. However, Excel doesn’t integrate natively with these systems, although some do offer automated integrations with Excel for an additional price.

Without such integration and automation, finance team members are required to input the necessary data manually. And each team member typically loses at least two hours every week dealing with these manual processes, which averages out to about $54 a week for each team member making $55,873 annually. If an organization has 10 finance team members, that works out to approximately $540 a week and $28,000 a year.

In addition, if a team member makes an error when entering the information manually, it could take hours or even days to locate the error — and that means more wasted time and money.

Conclusion

CFOs have long had a bias toward “no” as a response to change in order to insulate against expensive mistakes. But in reality, a “no” can also be a pretty costly mistake.

Finance as a function is being held back by legacy processes and practices that have become irrelevant in today’s world. Consequently, finance departments are not transforming at the same speed as is the rest of the business.

To transform the finance function, CFOs must learn to say “no” to using antiquated, error-prone spreadsheets and “yes” to modern cloud-based financial planning, analysis, and reporting tools.