7 Reasons to Use an Excel Template

7 Reasons to Use an Excel Template


Every day businesses face all kinds of challenges and managers of the business need to make different kinds of decisions. Shall we purchase products in larger quantities and lower the shipping costs and get a better price? Shall we buy or lease new equipment? How much money do we need to finance our expansion? How much can we reinvest out of profits and how much will we have to attract from investors?

Making a well-calculated strategic decision requires having a good financial model and here comes a very important question: shall we develop the model ourselves or shall we search for an Excel template and modify it according to our needs?

Based on the experience of our clients I have identified 7 situations when using a pre-built Excel template is the best option:

  1. Too simple task. Imagine that your company plans to take on a bank loan and you need to quickly create a loan repayment schedule to incorporate it into your business plan financials. There are tons of different templates on the Internet that would allow you to do that. So, why bother creating the schedule yourself when you can just download a Excel template?
  2. Too complex task. Complex problems like creation of a company’s budget or 5-year financial projections might turn out to be very time-consuming. On the other hand these calculations, if done correctly, would allow the company to avoid wrong business decisions that tend to be quite costly. Using Excel templates that are available on the internet, finance professionals and business owners can save time on the technical part of these projects and concentrate on the key things – projections themselves.
  3. New task. Think of a company that has been seen a successful organic growth for several years. Probably the people in the company’s finance department have established their routines in analyzing their daily activities, manufacturing/selling effectiveness, product group profitability, etc. But what happens if suddenly the company’s CEO spots an acquisition opportunity? The finance department will be required to make a valuation of the target company (at least initially, before calling in M&A professionals).A non-routine task like that will require the CFO to use some sort of financial model. Using a pre-built Excel template would not only save the CFO’s time, but would also allow using some ideas/know-how that were already incorporated in the Excel template by people who do company valuations every day.
  4. Too many hats worn. A CFO in an SME usually has to do tasks that would probably be outside his/her scope of responsibilities in a large company. It really depends on the company’s specifics, but I have heard stories of CFOs in small companies that were also fulfilling duties that would suit under the job description of an IT manager, purchasing manager, payroll clerk and even accountant’s assistant. A situation like this might be called ‘sitting on several chairs’ or ‘wearing too many hats’.The situation is even worse when there is no CFO in the company and the owner performs the CFO’s duties himself/herself. Sometimes the owners wear so many hats that they look like a dragonUsing and adjusting pre-developed financial models is a great way to save time for the super-busy CFOs and business owners that have to do things that go beyond their job descriptions.
  5. No financial background. That is usually the case of a business owner that is good enough in running the business but is not good at financial planning. Using a template would allow these people to use the financial planning tools for the benefit of their companies. Unfortunately, in most cases when business owners do not have financial background. Instead of doing at least some sort of financial planning they do not do any planning at all.Using financial planning templates is a great idea for those who have not received a formal education in finance.
  6. Average knowledge of excel. MS Excel is very powerful software, yet mastering Excel for financial planning and modeling might turn out to be quite time-consuming. Most people are able to enter numbers into Excel spreadsheets, however, it takes advanced knowledge of Excel to create financial models. Compared to static tables, financial models allow users to create and compare different scenarios of the future. Using a template would give CFOs and business owners more flexibility in their decision-making while not requiring them to master Excel.
  7. Limited resources to hire professionals. This might be especially true for startups and SME owners that are not yet capable to hire a full-time or even a part-time CFO. For example, when writing a business plan, the trickiest section of the plan for a business owner is usually the financial projection section. It is a good idea to get a template for the business plan financial part, to enter the numbers and to get neat reports that show consistent numbers. Hiring a professional consultant to do the business plan would cost the entrepreneur, depending on a country, hundreds to thousands of dollars. So getting an Excel template for free or for a single-digit amount of dollars is a very cost-effective option.

Where to look for professional excel templates? One option is to Google for Excel Templates for Finance or Financial Excel Templates. Another option that I would strongly recommend is to use a website that specializes in creating Excel templates for finance professionals and business owners –

This is a website that is run by a group of outsourced CFOs that have worked with hundreds of companies from different industries and different countries. Their experience as well as deep knowledge of Excel allows them to create professional financial excel templates for the needs of different industries.

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