The Midland, Texas-based company, which this year will make more than 5 billion plastic bottles for Coca-Cola Enterprises Inc., was spending all its money on robotic and other manufacturing equipment, not "cool" accounting software, Hosack says. Hosack's finance team detected the error when it uploaded the budget -- a labyrinth of Lotus 1-2-3 spreadsheets -- into the general ledger system, an old "green screen" system called Infinium. After running the actuals in January 2004, the team discovered that a calculation in a spreadsheet cell had omitted freight expenses for a product line for the entire year. The cost of the error: $1 million.
The budget process had long proved problematic. Some documents had a whopping 52 tabs. Changing one cell precipitated hours of checking. A spreadsheet guru had to manually input data. Not surprisingly, the job turned over frequently, Hosack says.
Hosack needed more modern tools. He talked to peers, attended a webinar and soon chose Microsoft Forecaster, a budgeting and planning tool from FRx Software, a wholly owned subsidiary of Microsoft. "After a million-dollar error, the CEO signs off on a $25,000 capex [capital expenditure] pretty easily," he says.
Now plant managers input financial data over the Web using simple menus. Hosack gets more detail and higher accuracy from his numbers. The former budget spreadsheet person is now a controller for two plants. And as budget season rolls around, Hosack is actually looking forward to it. "It's going to be really fun this year, [and you don't usually hear] 'budgets' and 'fun' in the same sentence," he says. Problem solved.
This was first published in August 2005