Global treasury teams are wasting an average of 4,812 hours per year using traditional spreadsheets to manage their cash, payments and accounting operations, according to a new survey of treasury professionals at more than 100 major brands in the US and Europe.
The latest survey from Kyriba, a leader in cloud treasury and financial management solutions, is the first of its kind to tally the number of hours that global treasurers are spending using spreadsheets on specific treasury-related tasks.
The biggest Excel time-waster, according to the survey, conducted earlier this year, was getting the daily global cash position, which sucks an average of 1,296 hours per year, followed by treasury-related accounting tasks (1,176), payment fund transfers (960), cash forecast generation (792), and 588 hours per year for other key tasks.
“The lost productivity due to spreadsheets is a huge opportunity cost for organizations,” said Dory Malouf, lead value engineer at Kyriba, who oversaw the research project. “Instead of focusing on value-add initiatives that help drive the business, treasurers and their teams, along with cash accounting managers, are stuck spending literally thousands of hours updating and manipulating spreadsheets.”
In addition to wasted resources, spreadsheets also introduce operational risk, including increased errors and “key person” risk, where a single master spreadsheet is owned by one person. Spreadsheets also lack security controls.
The lost productivity due to spreadsheets is a huge opportunity cost for organizations
The Kyriba survey spanned multiple categories, including real estate and construction, retail, technology, manufacturing, financial services and much more. In each case, participants were asked as part of a detailed business case analysis to estimate in detail how much time they spent using traditional spreadsheets to manage various key tasks. Their estimates were compared to the time required to complete the same task with Kyriba, a cloud-based treasury management platform, which automates and streamlines tedious manual reports, locks down data and offers significant benefits beyond data crunching.
The data puts a fresh spin on the debate over whether finance professionals are overly dependent on traditional, labor-intensive spreadsheets to accomplish modern duties. According to a recent survey from Boston-based Aite Group, “Moving from Electronic Spreadsheets to Treasury Management Systems,” about half of treasurers are still relying on the status quo.
In November, The Wall Street Journal published a seemingly innocuous article entitled, “Stop Using Excel, Finance Chiefs Tell Staffs,” in which CFOs lamented the time their teams waste on spreadsheets, including pulling data from disparate systems, instead of engaging in more strategic initiatives. The article ended up generating a firestorm of reader comments from finance professionals, prompting a second Journal story, “Finance Pros Say You’ll Have to Pry Excel Out of Their Cold, Dead Hands.”
“There is no question that finance professionals will not stop using spreadsheets in isolation, but what these numbers show, rather dramatically, is the cost of over-relying on spreadsheets to manage an entire finance function, like treasury,” Malouf said. “Spreadsheets are only effective to a certain extent, and cannot be counted on to scale to global requirements.”
Spreadsheets are only effective to a certain extent, and cannot be counted on to scale to global requirements
Meanwhile, organizations that embrace cloud-based treasury management systems can expect to recoup as much as 80% of those wasted hours per year, according to Kyriba customer research.
So, what else could treasurers be doing with the time they save by ditching spreadsheets in favor of scalable technology? What type of ROI can they expect?
Consumer goods giant Newell Brands was able to increase global cash visibility from 50% to 90% and saved at least 80 hours per month in the US when it swapped spreadsheets for a cloud-based TMS. This coincided with the acquisition of another company and the need to centralize global operations for cash management, payment management, hedge accounting and more. The move to a TMS enabled considerable more time for strategic analysis, according to Newell executives.
“Gathering and assimilating data was the biggest (resource) challenge – and that is where we are seeing the greatest benefits” of a TMS, said Amit Singh, the former SVP and treasurer at Newell Brands.
Meanwhile, the treasury executive at a major East Coast university estimated that moving to cloud technology from spreadsheets enabled his company to reduce operational risk by 5X, including wiping out key person risk, while boosting productivity by 2X. It also improved business continuity planning, and created time for more strategic initiatives, said the executive.
“In the end, the debate is not so much about Excel, as it about freeing-up finance staff from the shackles of burdensome data assembly and validation,” said Cheik Daddah, global vice president of Value Engineering at Kyriba.
“The most valuable asset for finance is time,” he said. “Freeing up time enables treasury finance professionals to focus on strategic analysis to uncover data and insights that help drive decision making and improve performance.”
Erik Bratt is senior director of corporate marketing at Kyriba, where he oversees branding, content and communications globally. Previously, Erik held senior-level positions at Microsoft, Tealium, Ensighten and WebSideStory (now part of Adobe Systems).