The biblical text is often misquoted “…. money is the root of all evil” as it’s “The love of money” that is the correct wording.
However, as far as business is concerned, money is the root of all good! It brings businesses and people together, to do good things and often makes our lives physically better. It’s therefore reasonable to assume that the finance department is linked inextricably to every other part of your business.
From the advent of 'big business' traced back to the late 1800s, the connection between finance and other business functions has evolved and expanded. It’s hard for new budding accountants to imagine what it took to do large-scale accounting, before computerised spreadsheets became popular. I remember my introduction to spreadsheets, first with Lotus 1-2-3 in the 1980s and then with Microsoft Excel from the early 90s to today.
As businesses grew and joined forces, some into large corporations, paper accounting became an increasingly gruelling and arduous task. What Excel can do in a second, which is basically any calculation imaginable after you’ve fed it the data it needs to do its calculations, had to be done with painstaking accuracy, and enormous patience, by large teams of junior and budding accountants, hoping to shine and progress to the next level of seniority.
With the amount of time and human effort that was used just to carry out the standard accounting function, it’s easy to understand why complex “financial models” and “financial analysis” were given little to no thought.
The arrival of the computerised spreadsheet was met by the junior accountants with both relief and despair. On the one hand some saw an end of tediously calculating figures in a darkened room. For others it was the thought of “your services are no longer required”!
Yet, for those who embraced this transition from paper to electronic accounting, it wasn’t necessarily business as usual. Excel was much more than just a digital version of the traditional paper spreadsheet; it was more like a place for accountants to go and play, and get lost in the world of formulas, statistics, and financial models. “What if” vocabularies had arrived in the finance department!
With a computer friendly accountant that just loves manipulating figures it was now possible to quickly analyse data, and help management find how to improve the financial position of the business. The accounting department had started to play a more influential role, over business decisions within the boardroom.
Two decades on, it’s remarkable that many of us in the business and finance worlds now see Excel as something that’s “manual,” “static,” and “slow.” It still has uses in areas where little else can match it – it’s a fantastically powerful tool for data scientists – but it seems out of place in a digital business world, that’s striving to become “instant.”
Although the pace of life has accelerated over the past 20 years, come the weekend, many people look forward to that stress free, slow paced, lazy weekend. However, in business it’s not about what you want, it is about becoming instant – or “live” – to keep up and survive. We hear of how weak or slow decisions, caused by a lack of sufficient business insight, lead to uncertainty and often business difficulties.
The difference between Excel and modern business intelligence tools that the leading financial management software solutions deliver, is that the former delivers instant calculations, but the latter delivers instant insight. It’s this that allows the finance team to go beyond simply reporting past results, and touching every part of the business with answers to immediate questions, whether they’re about production, R&D, purchasing, HR, or marketing.
The seemingly subtle but practically enormous difference between having instant calculations or instant insights at hand might just turn out to be what saves your business.
:: Trevor Bingham (editorial@ itfuel.com) is business relationship manager at ItFuel in Craigavon. Follow them on Twitter @itfuel.
