6 Pitfalls of Relying on Spreadsheets for Financial Planning

Financial planning for your project is a critical step if you want the project to be a success. The process forces you to establish goals and then plan how to use your current resources to ensure those goals are met.

Effective financial planning pushes you to make more strategic decisions so that you rein in spending and ultimately increase your profitability. The key word here, however, is “effective.”

If you are still using spreadsheets for your financial planning, chances are you’re not being effective. Here’s why:

spreadsheets-mistakes

1.  Spreadsheets are riddled with mistakes

When you are planning for a project, you need accurate data on which to base your decisions. Unfortunately, humans are error prone, and they are the ones entering all that data. While a misaligned row or typo seems harmless, it can render an entire column or row inaccurate. What’s worse is that unlike other formats, errors in spreadsheets are hard to catch, so they can go undetected until it is too late.

spreadsheets-viruses

2.  Spreadsheets are susceptible to viruses and hardware failure

If your system is attacked by the latest virus or if your laptop fails, your spreadsheets could be affected, requiring you to redo all the work you’ve put in.

3.  Spreadsheets aren’t agile enough

You customize your spreadsheets to suit your needs and preferences, and that setup may not work if your project goes through a major change. Spreadsheets aren’t easy to consolidate, so all that data will need to be recreated.

4.  Spreadsheets don’t promote collaboration

When you are planning, budgeting and forecasting, you need the input of the rest of your team and other stakeholders. With spreadsheets, each person must work on an individual spreadsheet, then email it to the rest of the group. Stakeholders can misplace files, work off the wrong versions, duplicate content, or even share bad data. It is time-consuming to double-check data, verify accuracy and ensure that everyone is working off the correct version.

5.  Spreadsheets take away accountability

Most spreadsheets don’t offer a way to tell who changed the data and when they changed it. An employee could fill a spreadsheet with incorrect information, and you would have no way to track the mistakes back to that person. Using spreadsheets requires all users to be extra diligent when they enter data, and that isn’t always a guarantee. Some people will be sloppy; others simply don’t have the knowledge to use the spreadsheet correctly. Without the ability to find out who is making mistakes, you can’t bring the issue to their attention and correct the problem.

spreadsheets-slow-decision-making

6.  Spreadsheets slow your decision making

The content in spreadsheets takes a great deal of time to create, edit and verify. As a result, you may have to delay decision making because you can’t see a clear picture of where the project stands and your current financial situation. You may miss opportunities or delay progress as you burn up time deciphering data from a spreadsheet.

You just can’t risk your next project by relying on an outdated, unreliable process. It is time to do away with those spreadsheets and turn to a more dependable, flexible and user-friendly resource for all your financial planning.

TEMPO-Folio-logo

Tempo Folio is a better option

Take full control of your finances with Tempo Folio for JIRA‘s visual planning and budget management capabilities that enable you to see your full project and portfolio progress in real-time. Compare actual costs and revenues with your plans, allocate work, and capture the cost of employee compensation.

Gain feedback on past, current, and projected performance of projects, and evaluate the impact of changes before you make them. Both these aspects of Tempo Folio for JIRA will improve your decision making and ensure that your projects will end and deliver time and come in on budget.

Finally, because Tempo Folio allows you to tightly control who can see and edit your project’s information directly within JIRA, you can maintain control and drastically cut down on data mistakes that could threaten the success of your project. Integrate with JIRA Agile and start managing your Agile project’s financials like never before. Discover a better way to complete your financial planning and get things done.

Learn more about Tempo Folio for JIRA

Get started with Tempo Folio for JIRA

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Jessie
Jessie is a New York transplant living in Reykjavík. Her motto is #ABL—always be learning— and having some fun along the way. As the head of marketing, communications & legal initiatives at Tempo, Jessie thinking about storytelling, building a strong brand, growth, teamwork, and grit.

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