Budget Spreadsheet Upgrade Helps CUs Excel
When crunching budget numbers, complex credit unions with several branches and departments might feel like they are searching for a needle in a haystack. Error-prone Excel spreadsheets pose challenges with data integration, integrity and report publishing.
To combat those errors and inefficiencies, many credit unions are rethinking spreadsheets by implementing performance management platforms that assist with budgeting and strategic planning.
“With strategic plans increasingly based on their financial impact, the role of finance is quickly evolving from a back-office function to a more strategic advisory role, and at the same time, the finance department is being asked to be more agile and responsive to an institution’s needs,” said Ken Levey, vice president of financial institution solutions for Axiom EPM in Portland, Ore. “With these increased demands, it is critical that today’s financial institutions leverage more complex, sophisticated forecasting and planning models to drive a stronger link between strategy formulation and execution.”
Unfortunately, many credit unions spend too much time inputting data and not enough time analyzing the data and ensuring accuracy, according to Vanessa Lowe, an NCUA economic development specialist.
Budgeting and strategic planning must go hand in hand to maximize efficiency and mitigate risk, Lowe said during a recent webinar hosted by NCUA’s Office of Small Credit Union Initiatives.
In order to build stronger budgets, she said, credit unions need to adopt new methods of analyzing historic budget data. Excel spreadsheets can be cumbersome, and credit unions often lack the tools and methodology for important budgeting tasks such as accurately measuring net interest margin or conducting scenario modeling.
“Our credit union is fortunate that we don’t just have to rely on Excel spreadsheets,” said Bobbie Warner, accounting assistant manager with OSU Federal Credit Union.
Next Page: Leaving Legacy
The $818 million institution in Corvallis, Ore. decided several years ago to switch from a legacy budgeting platform to an enterprise performance management software solution, which has streamlined its monthly reporting and annual budgeting process while strengthening strategic planning, he said.
In order to migrate efficiently without needing to retrain staff, OSU opted for Axiom EPM, which embraces and extends familiar Excel spreadsheets, but manages the data in underlying database and builds security around the entire process, Warner said.
Levey said Axiom EPM can handle offline excel spreadsheets, improve the accuracy of net interest margin calculations, provide the ability to view alternative scenarios, and other common budgeting issues.
Warner said his credit union addressed workflow challenges where the use of offline Excel spreadsheets was redundant and inadequate. Since Axiom EPM reduced the time spent on unnecessary data entry, OSU has been able to shift more time to analyzing data and get the most out of their work, he said.
“Using Axiom EPM has given the finance department greater responsibility and control in the budgeting process, and it has helped us solve numerous interdepartmental data and speed issues, such as handing accounting calculations for real estate sales,” said Warner, who will be among the panelists during a free Sept. 26 Axiom-sponsored webinar entitled, “Ending the Debate on Excel for Enterprise Planning”.
Westerra Credit Union in Denver, Colo. was also searching for a way to eliminate manual consolidation of complex Excel spreadsheets, improve collaboration and optimize management reporting, according to a recent case study by Palo Alto, Calif.-based Adaptive Planning.
By implementing Adaptive Planning’s Corporate Performance Management system, the $1.2 billion Westerra has improved efficiency and strategic planning, the credit union said.
“On the capital and personnel budgeting sides, executive management is able to more quickly see how the budget proposals impact the operating results,” Jennifer Meyers, vice president of Finance for Westerra, said in the case study. “So, instead of waiting for someone to input data, they can immediately see the results if they adjust a particular assumption. I’ve already seen improved efficiency in terms of my ability to work with the team.”
When evaluating a performance management platform, critical financial management functions such as strategy formulating, strategy alignment and performance monitoring are key considerations, according to a new Axiom EPM white paper.
“(EPM) is used to reference a broad set of integrated financial planning and performance monitoring processes, including multi-year financial forecasting, capital planning, detailed budgeting, strategic planning, and financial and managerial reporting. However, in most financial institutions these functions aren’t well integrated at all,” the firm said in the paper.