Disadvantages of using Excel for liquidity planning

Many controllers and treasurers of smaller and medium sized companies still use Excel to manage their treasury but there are many disadvantages of using Excel for liquidity planning. Of course, you can use Excel to manage some loans, FX contracts, Interest Rate Swaps and even do your liquidity planning and exposure management. But at a certain point it will cost too much time and the chances of errors using Excel for liquidity planning are getting higher. Usually the ‘spreadsheet’ is managed by one person, meaning that the knowledge isn’t deep embedded in the organization. Typical problems we encounter are:
  • Financial Transactions:
    • floating rates / holidays are difficult to manage in Excel
    • the calculation of market values is complex
    • Excel doesn’t generate journal entries
    • No 4 eyes principle
    • No generation of payment files (redemption & interest)
  • Liquidity planning
    • No drilldown possibility
    • No currency differentiation
    • Cash flows from transactions not automatically included in forecast.
    • Problems with version controls and comparison (Actual – Forecast)
  • Reporting
    • No standard reports available
    • Compliance and audit trail not available
When asking them if they have ever considered the use of a treasury management system, the answer is usually that they ‘do not have a budget’ and/or ‘do not have the time to implement it’. It seems that, two key-assumptions already have been made here: a treasury management system (TMS) is expensive and takes a lot of time to implement. Our sales team will be happy to prepare a solid business case together with you and prove that the above-mentioned assumptions are incorrect.


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