In this third part of our monthly accounts review series, we examine the critical process that takes place before financial statements are finalized. This review is triggered by Josh Aramova, whose webinar with Daniel I recall discussing similar themes.
The Final Stage vs. The Creative Process
Most finance and accounting webinars, tutorials, and courses focus on the last stage of the process—structuring and formatting financial data into a profit and loss statement and then publishing it in a static form. Any dynamic aspect of this is limited to slicing and dicing subsets of the data, such as consolidated subgroups.
To illustrate this contrast, consider the Mona Lisa. The final painting in the Louvre is the result of Leonardo da Vinci’s creative genius. Now imagine buying a paint-by-numbers kit from a joke shop, completing it, and then claiming to have painted the Mona Lisa. That’s the difference between true creative financial analysis and the surface-level reporting often taught in finance courses.
What Happens Before the Financial Statements?
The real work takes place in the week or two leading up to the finalization of financial figures. This process ensures that the numbers published on the profit and loss statement are accurate and credible. In Part 2 of this series, we framed this as a challenge: How do you ensure that the reported figures are correct?
If errors slip through, the consequences are severe—incorrect financials can lead to misplaced promotions, terminations, or worse, a complete loss of trust in the accounting process. The finance team, CFO, and financial controllers must guarantee the reliability of these numbers, as investors, shareholders, and stakeholders depend on them to guide business decisions.
The Three Approaches to the Review Process
There are three broad approaches to solving this problem, each reflecting a different level of sophistication and effectiveness.
1. The Manual Approach (Outdated and Impractical)
In traditional setups, budget holders are expected to review accounts manually. If an organization has 400 operating units, this means creating 400 separate workbooks, each containing exported financial figures and breakdowns of transactions. These workbooks are then sent out, manually reviewed, and returned with comments.
The sheer scale of this process makes it impractical. Copying and pasting data, reconciling different reports, and managing returned spreadsheets become an enormous, error-prone task. No CFO or manager in their right mind would willingly set up such an inefficient system.
2. The ‘Power Excel’ Hype (Promoted but Unproven)
The Excel influencer ecosystem promotes the idea that all manual processes should be automated using advanced Excel features like Power Query, dynamic arrays, and Lambda functions. These techniques are hyped on social media, but there is little to no evidence that they can be effectively applied to real-world finance operations at scale.
We put out a call to 50 Excel MVPs from the Financial Modeling World Cup to demonstrate a practical solution to this problem, and not one responded. If these techniques truly worked in an enterprise setting, surely someone would have stepped forward to showcase them. This silence speaks volumes.
Moreover, while these influencers may lack firsthand experience in CFO or financial controller roles, one would expect some anecdotal evidence from their followers. But even that is absent. Despite their vast audiences, no one is sharing real-world success stories of using Power Excel techniques to streamline financial reporting in a way that truly eliminates inefficiencies.
3. The Enterprise Data Flow Solution (Efficient and Scalable)
The solution I implemented at EdExcel—and later refined in other organizations—takes a radically different approach. Instead of exporting and circulating spreadsheets, everything happens within a single, centrally controlled workbook.
- The profit and loss statement is structured, but initially empty.
- Budget holders select their region, country, or operating unit using a cascading, dynamic dropdown.
- Clicking ‘Get’ automatically populates the sheet with the latest draft accounts.
- If discrepancies arise, the budget holder double-clicks on a figure to drill down into the underlying transactions.
- If an adjustment is needed (e.g., reclassifying a prepayment), they enter a note and click ‘Save.’
- No spreadsheets are sent or received—everything is updated in real time through a centralized data flow.
- The finance team can then access all budget holder comments instantly and take corrective action as needed.
This method ensures that feedback loops are closed efficiently. Unlike the manual method, it eliminates unnecessary file management. Unlike Power Excel automation, it has been proven in live enterprise environments.
Why Is No One Else Doing This?
Despite the clear advantages, this approach is not widely discussed. None of the major accounting bodies—except for the Certified Management Accountants of Australia—have acknowledged the need for such solutions. Instead, companies are told to either invest millions into ERP and FP&A tools or rely on inefficient Excel-based processes that ultimately fail.
If you are reading this and recognize the opportunity, you stand to gain enormously. Your ability to solve a problem that management assumes would cost millions makes you incredibly valuable. Implementing this solution by Friday could position you as an indispensable asset to your organization.
It’s time to challenge the status quo. We need thought leadership and engagement on this issue. If you’re in finance, accounting, or FP&A, let’s start a conversation about real, scalable solutions. This is not just about fixing financial reporting—it’s about revolutionizing it.
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