Excel Formula used to create reports

It is important to note that not all formulas are bad.  It just depends on where and how you use them.  Formula that define variances, percent of sales, totals, ratios and other logic are perfect for Excel – after all this is why we use Excel.  But formulas that reference the data source directly through a formula are problematic.  We refer to these as “base input cells” because they are the starting point or foundation for a report and the connection back to your ERP.  These cells should never be based off a formula as they can be calculated and controlled much better outside of Excel.

Many, if not all, of today’s Excel based financial reporting tools use some type of Excel formula logic to connect to the source and return results to Excel. The formulas query the data source and you copy them to all the cells of a report changing various parameters or references until the report is built. This approach has numerous drawbacks.

Here are the inherent problems with formula based reporting solutions:

• Formulas contain errors.  No matter how much you check a report as soon as you have 10 columns and 10 rows you have 100 cells and 100 formulas.  In accounting if even one cell is wrong the report is wrong and you are basing decisions off of bad information.
• Formulas are slow.  Each formula is an individual query making an individual call to the data source.  This is inefficient and puts undue stress on the server.  The real problem is that the formula is often very similar yet it has to be recreated over and over for each cell. The result is waiting for reports to refresh.
• Formulas get broken.  This is similar to an error but this type of error results when something outside of the Excel file changes such as a file name, folder name, or server name.  All of these things could cause a problem.
• Formulas are difficult to change.  It is often easier to build a formula when your report idea is fresh.  Later when you have to make a change you must interpret the formula and figure out how to change it.  If there are any exceptions you must ensure they are preserved.  The result is changing a bunch of formulas and often one at a time.  Be careful!
• Where is the security?  What if someone changes a formula to get different results?  All of the definitions are sitting in Excel and not on the server where they are secured.  These definitions are critical and they must remain consistent across reports.  This is famously referred to as “creating a single version of the truth”.
• Version control or out of control! – When you make a change to a formula, you are just changing a cell in Excel.  How do you keep track of that properly?  How can you easily replicate those changes to all of your other cells, worksheets, and files that rely on that same changed definition?  How do you know where each of those definitions are located?
• Compliance. How can you ensure those reports are accurate?  Do they meet SOX requirements?

We are a visual species, and the seemingly endless onslaught of data visualization BI tools would suggest that we are becoming even more accustomed to making business decisions with the help of pretty pictures.

I don’t mean to diminish the value of these types of tools. Without question, data visualization is a great way to merge all sorts of data together from disparate sources.  Until recently,  it was nearly impossible to provide decision makers with access to this variety of information in a format that was easy to configure and consume.

Data Visualization tools are helpful for presentation and analysis of both Flexible and Stuctured G/L based Reporting.  Unfortunately, you can’t file an Executive Dashboard with the IRS..

If Data Visualization is the Sizzle in Business Intelligence, Financial Reporting is the Steak. 

Structured Reporting is often left out of the BI discussion, yet all organizations require and rely on Financial Reports/Statements.

Your management team might like dashboards, but anyone responsible for the financial performance of the organization, in addition to your Shareholders, your Auditors, your Banker, your Government and others all require accurate financial reports.

Cash Flows, Balance Sheets, and P&L Statements are not going anywhere, and the preferred format for creating them is still Microsoft Excel. Admittedly, Excel isn’t perfect… Human error, Security, Version Control, Ability to Collaborate all present challenges to growing organizations.

That is why we created Vivid Reports. We encourage you to learn how we are helping organizations manage their businesses more efficiently, close month end faster, and produce accurate Financial Reports in a timely fashion. We even built in some Data Visualization Tools (Spinning Monkeys are in Development).

Executive Dashboards have become a very hot topic in the world of Business Intelligence, and have spawned an entire industry of it’s own.

The basic purpose of an Executive Dashboard is to provide key decision makers within an organization with a graphical representation (or visualization) of vital information at a glance.

The concept behind the Executive Dashboard is that they will provide decision makers with access to Key Performance Indicators in an easily digestible form without having to produce and review a traditional report.

In reality, an Executive Dashboard is merely a summary or high level view of a larger report or data set that will at some point need to be drilled into at a lower level of detail for analysis.

The information is often presented in a bar chart, bullet graph, pie chart, and the ever popular gauge with red, yellow, and green indicators mimicking the traffic light.

While spinning gauges and fancy graphics may look really cool, ultimately it comes down to executives being able to access meaningful information.  Did you ever hear the one about the CIO that spent a million dollars implementing a cutting edge dashboarding solution, only to find out that the CEO was colour blind? Okay, I don’t know if that is a true story, but since 8% of males in North America and nearly 1% of females can’t distinguish between red, yellow and green it is certainly something to consider before signing the check.

As is the case with all Business Intelligence solutions, the information presented in the dashboard is only as good as the information that has been captured or is accessible.

There are a number of different approaches to Executive Dashboards including standanlone applications and Web Based Portals which pull from a variety of data sources. All of these applications have their merit and place.

An often overlooked solution for creating Executive Dashboards, is Microsoft Excel. Excel’s rich “out of the box” user friendly graphing and charting capability make it an ideal presentation solution for many organizations.  There is a wealth of information available and in fact entire web sites and consulting practices devoted entirely to Excel Based Executive Dashboards.

Traditionally the tricky part with Excel Dashboards and Excel based reporting in general,  has been connecting to the data source.  IT involvement is usually required to connect or “make sense” of the data, and the connnections and the data transfer is often painstakingly slow.

Fortunately, Microsoft has been making it easier to access and report on information in Excel with their popular Power Pivot Tool, and the deeper integration of Excel with their Dynamics GP, SL, NAV, and AX ERP lines .

Powerful Excel Based Corporate Performance Management solutions like Vivid Reports make it even easier to build Excel Based Dashboards, as users never have to worry about connecting to the financial data in the ERP.

Excel Based Executive Dashboards are Briscoe Solution’s data visualization method of choice, as we feel it offers our users the most cost effective way to deliver a graphical “Snapshot”  of KPI’s to decision makers.

To learn more about Vivid Reports and to view a live demo of an interactive Excel Based Executive Dashboard please contact us or continue to explore our site.

In this brief article, Financial Reporting Expert James Briscoe examines the Multidimensional Chart of Accounts. Don’t forget to download the Free Top 10 Tips for Organizing your Chart of Accounts Document at the end of this article.

Over the years I have seen a lot of Chart-Of-Accounts (COA), and some are set up much better than others. There can be various reasons for this such as change in organizational focus, the length of time the system has been used, staff turnover, and a poor design.

The intent of this article and the accompanying “Top 10 Guide” is to provide some tips based on my own observations over the years related to the design that can hopefully save you time and help you get the most out of your financial reports and analysis.

A multidimensional Chart-Of-Accounts (COA) is an account numbering system that has multiple segments (aka dimensions) and is typically used by a larger organization.  These organizations are more complex (for example they have multiple physical locations or product lines) and need to track their Assets, Liabilities, Equity, Revenue, and Expense transactions from more than one perspective or identifier within the General Ledger.  They are also, of course, running an ERP that supports this enhanced structure such as Microsoft Dynamics NAV.

A typical example is an organization, such as a restaurant chain, that has many locations.  They cannot track revenue and expenses at just the account level but need to identify each transaction on a location by location basis so they can produce and analyze financial reports per location.  This will enable management to know which location is the most profitable, the most expensive, has the best margins, where physical assets are located, and so on.

This basic example would require each transaction to be keyed so that it identified two things: the main account (aka core, primary, object) segment and also the location number.  In figure #1 below there are three segments because this organization also wants to track things on a departmental basis.  This figure shows the “Full Account” (segment combinations that are used), the individual segment values and descriptions, and lastly the definition.

For additional Information Download the Free Top 10 Tips for Organizing Your Chart of Accounts .