In a world long ago, spreadsheets ruled over all companies like kings. Every business – large or small, private or public – used Excel for tracking normal activities and projecting future financial goals. Unfortunately, not much has changed.

Spreadsheets in fact still remain the standard financial modeling tool for most businesses. The companies that use them seem to think they have a comprehensive way to project the future of their business just by stringing together a few rows worth of projections.

This simply does not work anymore. And it’s time to quit trying. Seriously, stop.

Why use a Two-Dimensional Solution for Your Multi-Dimensional Business?

Excel models do still hold value for some undertakings, but they are not capable of fully portraying your modern dynamic business nor evolving with it. Several of you have likely looked at the wide number of Excel-based financial model templates out there right now. Admittedly, some of them are very useful, but none of them work to grow with your company. They are only used to establish your plan from a single point in time.

What happens when you look at that same plan six or twelve months later? More importantly, how did you use it to make decisions in your business during that interim period?  If you were not using it then, why is it useful to you now?

Many are not satisfied with using Excel for financial modeling. In a survey by Ventana Research, 49% of respondents knew there must be better alternatives to Excel for performing critical finance functions.

No Magic in Spreadsheets

Most business owners are in search of an all-in-one spreadsheet solution where you can plug in a few inputs and watch your entire financial future unfold right before your eyes.  The charts get automatically created, the cells magically filled in – this is spreadsheet euphoria!  It all seems to work up until the point where you want to inspect the details of your model, and you find that your financial picture looks oddly similar to the average view of every other business using the same old spreadsheet template.

Alternatively, spreadsheets tend to produce errors in data more often than not. Many users find their spreadsheet has so many variable factors they quickly get lost in a deep sea of manual inputs and corresponding miscalculations. In fact, studies have shown 88% of all spreadsheets contain some sort of error.

The Static Spreadsheet Dilemma

When you look back at your most recent quarter or the quarter prior, did it match the financial model you had created at the time? Did you change prices? Add staff? Get an unexpected bill from your accountant?

With a spreadsheet, you only have inputs at a particular point in time to create a forecast into the future. In theory, these inputs are your most accurate assumptions based on historical financial data, or potentially just pure speculation for the financial results you hope to achieve. You can create a magnificent looking forecast for the future of your business in a spreadsheet, but what happens when the future becomes the present? What happens to your forecast and everything you have already presented to your investors, creditors, and board of directors?

If you are constantly changing your actual financial results from your initial forecast, then why even have a forecast at all?

Your forecast needs to evolve with your business and provide the ability for you to make changes over time to meet specific goals. Perhaps you want to make revenue growth your primary target, or maybe you are focused on maintaining strong margins. As your business continues its operations throughout the year, you should also be able to see what levers you can adjust to increase those revenues or improve those margins. Your forecast is a dynamic tool used repeatedly throughout the year to track and manage your business operations, not just a one-time financial projection.

You can build out a quick five-year forecast in Excel, but what do you tell your stakeholders – who expect you to meet that exact forecast? What do you tell them when you need to make adjustments to your forecasted revenue or expenses? What is the expected return on making that change? How have your assumptions changed? Why are you looking at a static revenue growth number when you have 10 different marketing campaigns driving varying numbers of leads at various conversion rates? These are all things you will have to be able to explain to your stakeholders, and are also all things that would be highly difficult to portray through an excel-based template. Excel might do a good job of summarizing your business, but it simply does not help you run your business.

See: Spreadsheets Are Destroying Your Business. Here’s How

Everyone Knows the Forecast Will Change – Why Bother Making One?

Let’s be real, financial models are rarely as accurate as we initially project, whether for better or worse. The reason we create them is not so that we can stay exactly in line with what some spreadsheet is demanding us to do. The reason we create financial models is to develop an understanding of where a business’s growth is derived – so that once your future financial projections become actual financial results, your business can adjust its model accordingly and continue operating smoothly.

The Tool Your Business Needs

Your business is a progressive adventure that needs more than what the traditional spreadsheet-based financial model can offer.

At Hivemetric, we have your answer.

Hivemetric is your financial modeling solution that evolves with your business. One that will integrate with your accounting systems, while also staying connected to the rest of your business’s operations – from sales and marketing to recruiting and training. We know your business is much more complex than a basic spreadsheet model. At Hivemetric, it is our goal to get you out of spreadsheets and onto the platform that can fully project your business’s entire story as it is being written.