CapEx Planning with Excel? | Blog Series Part 2

Capex Excel

[Blog Article | Reading Time: 3 mins] In the second part of our CapEx planning blog series, we feel for all those who, year after year, have to process countless tables in Excel to plan investments and spend many, many hours doing so. It doesn’t matter if the lists first have to be laboriously prepared and then distributed throughout the company, or whether it is “just” a matter of laboriously copying together hundreds or thousands of investment projects. Ultimately, the “Excel Master List” is always a time-consuming Sisyphean task. Not to mention the cut and revision rounds when the planning is actually already finished.

The spectre of investment planning?

Anyone who’s been responsible for investments knows the levels of stress and anxiety that accompany the investment planning period. As the head of controlling of a large German medium-sized company once said so beautifully: “Stop planning investments. It’s June and planning hasn’t even started yet. But I’m sick and tired of the whole ‘Excel sliding’ thing and my annoyed employees.” Actually, the overriding goal is extremely banal: Controlling and management need an overview of the planned investments of the individual divisions and plants in the company. These are collected, prioritized and released in a master list in Microsoft Excel. But this is not the end of the story. After that, this list has to “live on” due to cutbacks and changes.

Annoyances for (central) controllers

On the way to a master list in Excel, controlling departments prepare individual lists for each division and each company that already contain the (overhang) investments from previous years. Actually, the divisions and companies only need to supplement these lists. But now the annoyances begin: Incorrect/old versions of Excel files are sent back. Cells and columns are added, so that macros and formulas are broken, and so on. You know that. This makes the subsequent merging of the many Excel files into one master file a time waster. The files need to be repaired, macros need to be reset and, in the worst case, data needs to be manually copied together. This manual transfer of data into Excel causes errors when planning investments, which even CTRL+C and CTRL+V cannot prevent.

When all this is finally done and the master list is completed, the challenges continue. Now, for example, cutback rounds are being carried out, as less investment budget is available than originally planned and released due to poorer economic forecasts. A “10% reduction over the entire investment budget” comes as a guideline from the management. Now the controlling employees have to get in touch with all departments and companies and laboriously save 10 %. Another example is the colleague who, shortly after the adoption of the investment plan, remembers that he now prefers the requested machine in yellow instead of blue. And so on. The investment plan must therefore “live on”. In Excel, this is not so easy, because the list is actually “released, done and forgotten”. Even if this does not reflect reality.

“But Excel is so fast and we are so flexible.”

So what could a solution look like that reduces these errors to a minimum and at best takes over the time-consuming tasks? Well, errors and time wasters are mainly due to the freedom that users enjoy in the Excel lists. Despite all the speed and flexibility that makes Excel so attractive, incorrect data formats, for example, can be entered and rows inserted in the wrong place. In addition, users make careless mistakes, such as sending the wrong file.

Central system as a solution

If you want to avoid these errors, which cause a lot of time when merging the Excel files, you can transfer the planning of investments into a central system or a central database. A place far away from Excel, where all data is stored and to which all participants – naturally within their authorizations – have permanent access. Controlling defines default settings and thus ensures that no errors can occur during input.

Firstly, such errors cost a lot of time (and money). This means they not only lose the speed comparison with a systematic business process, but also the cost comparison. Secondly, where people work, mistakes happen. Those who are involved in the planning of investments are no more immune to this than the author of this blog post. But wouldn’t it be great to do everything possible to at least avoid careless mistakes? The possibilities are there these days.

A new part of the blog series will be published every week until October.

Already published:
Part 1: Simple CapEx Planning
Part 2: CapEx Planning with Excel?
Part 3: On the Way to the Perfect CapEx Plan
Part 4: Intrayear Forecast – Always Know the Score
Part 5: Budget Allowance, or Make a Wish?

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