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Excel tools for financial statement analysis in practice
For banks, financial service suppliers and other companies, financial statement analysis is an important and regularly used instrument for the assessments of risks. Still today, highly complex Excel tables are often used, which continually causes problems for risk management departments. Flexible financial statement analysis software can provide help.
Excel is a powerful tool and offers a wide range of evaluation possibilities if you have knowledge of all the relevant functions. Nevertheless, when carrying out balance sheet analysis with Excel significant problems occur again and again.
For example, it is probable that in almost every company there are pitfalls in the file storage structure. Versions are saved with a new date in a different place but one of the colleagues does not know this. Filenames ending with "current" are stored multiple times in different places. Which "final version" is the real final version?
Even if one can assume that the file storage structure is clearly defined and is strictly observed by all members of staff: who has made changes most recently and where? Has someone changed a formula? And why doesn't the link to the other tables work anymore? The larger the number of people who work on the tables, the more confusing and open to errors the whole thing becomes.
A further difficulty comes up when responsibilities are passed on or, for example, a member of staff leaves the company: who is going to train the new colleague? If there is only one person with knowledge of the system and this person is no longer there, the colleagues could soon be faced with the task of reconstructing everything or starting from scratch. The time needed to understand Excel tables that someone else has created is often immense. Has anything been documented? But where? In Excel itself there are limited possibilities for this.
And here is a final example: the management needs a clear report for a meeting on the next day. With Excel, however, the requirements "clear" and "on the next day" can become completely irresolvable or at the least very time-intensive tasks. Anyone who has tried it knows that the transfer of key figures from Excel to Powerpoint is time-consuming and prone to errors.
Get more out of it!
"It grew like that historically." This answer is often heard to the question as to why financial statement analysis is being performed using Excel. "We don't have time" is the usual answer that you get when you ask why nothing is being changed. And also: "if it ain't broke don't fix it" is the typical attitude. But it is worth it; any employee who has spent time wrestling with Excel will be thankful for an alternative that is easy and intuitive to operate.
One thing is clear: inefficient processes, lack of transparency and the risk of making mistakes, with increasing cost pressure at the same time, are not acceptable for companies. Pushing forward digitalization and automation in balance sheet analysis as part of risk management is an important step on the way to digital transformation.
Financial statement analysis software makes your life easier
- Clear responsibilities
- Transparent processes
- Automatic plausibility checks
- Professionally presented reports
Since joining SCHUMANN, Christian Keufner has worked on SCHUMANN's solutions for balance sheet analysis and was responsible for their sales and marketing. He now works as a Business Development Manager in Financial Services in the area of leasing.
In addition to his work at SCHUMANN, he also studied the Master of Science "Taxation". As part of his Master of Science "Sustainable Management & Economics", he intensively works on the topics of sustainability and ESG.
Business Development Manager, SCHUMANN