There are many reasons and challenges that could lead to changing your corporate allocation tool, including: end of life allocation software, reliance upon multiple software solutions, substantial calculation times impacting book close, lack of flexibility to adjust post go-live, or the lack of ability to run what-if analysis for your organization. Unfortunately, yet understandable, a lot of organizations resort back to spreadsheets.
From spreadsheets to a corporate allocation tool
Increased transparency, faster analysis, and a higher degree of accuracy. This is what you would expect from a corporate allocation tool. Even better: predictive capabilities to simulate proposed changes to business processes before making decisions.
However, systems incapable of running modern predictive costing methods, and systems too rigid to provide meaningful information are blocking optimized enterprise cost management and an optimal corporate allocation tool.
In the absence of a workable corporate allocation tool, organizations tend to use spreadsheets. Why? They are cheap, flexible, easy to use and widely available. However, spreadsheets are not the long term solution to your problems like longer runtimes, no transparency and the ridigy of the solution. The use of spreadsheets as your corporate allocation tool comes with considerable disadvantages, as their usage over time is not sustainable and not meant to house mission-critical data.
The list of disadvantages continues with the lack of a single source of truth (because they are single use and have many versions), prone to errors and limited access controls can set an organization up for failure. Spreadsheets have their place in an organization, but they continue to prove they aren’t an actual corporate allocation tool. As a replacement, CostPerform is considered to be the most functional, flexible ánd affordable corporate allocation tool.
Benefits of a good corporate allocation tool
So, how does a corporate allocation tool benefit your book closing process, calculations and eventually, your business? We’ve listed 6 benefits for you, right here:
- Reduce complexity & the number of rules to produce the same outcome.
- Increased transparency in inter-entity charging and getting rid of the black box.
- Make enhancements and adjustments when you need to when circumstances force you to change the allocations.
- One stop shop for allocations, calculations, and reporting, creating a single source of truth.
- Transparent reporting for each step of the allocation cycle.
- Automate the entire process of data collection, allocation, invoicing and/or feeding journal posts to the general ledger and workflow.
