Signs You Need Better Portfolio Monitoring Than Excel

Eight Signs You’ve Outgrown Excel for Portfolio Monitoring

Excel has traditionally been an easy (and natural) way to track portfolio companies, particularly when your fund was smaller, and perhaps less complex.

As your fund grows, however, you are likely installing technology to manage back-office tasks (i.e. accounting software for finance and a CRM system for the deal team). But none of that manages your “crown-jewel” front-office information: the data showing your portfolio company performance metrics and valuations.

So how do you know it’s time to upgrade from Excel to a proper portfolio monitoring platform? Here are eight tell-tale signs that it’s time to do just that.

1. It takes longer than five minutes to find something.

“Yes, I know the LP is on the phone. That number is on one of these tabs. Or possibly on the other spreadsheet. Can you stall while I look.”

2. You want to evaluate your entire portfolio for risk.

“Don’t a few of our companies have factories where that war is about to escalate? Have we scenarioed how that could affect our results?”

3. You have to restart a meeting when you realize people are looking at different versions of a spreadsheet.

“It says here inventory is down to a 10-day supply…Wait, what update? I’m reading version 3.2, when was it changed?”

4. You’re worried about an upcoming audit.

“I’m sure that valuation was based on the revenue projection they gave us. You know, the one before they lowered it. Don’t we have a record of the old numbers somewhere?”

5. Only one person knows how your ‘master spreadsheet’ works.

“A three-week honeymoon? How will we get the reports out?”

6. Your investor reports look like they were made in Excel.

“What do you mean BlackRock doesn’t have grid lines on its reports?”

7. It takes weeks of chasing to get all the information for a quarterly report.

“I don’t care how good that oil-services business looks. No new deals if we can’t keep track of the ones we’ve done already. Get me those numbers now.”

8. Everyone knows you need a portfolio monitoring system, but you think it would be too difficult to set up.

“I’m sorry, but we just don’t have the bandwidth to accomodate a software install.”

If you’ve heard anything like the above at your firm, it’s time to check out portfolio monitoring software. Imagine being able to open your laptop, tap the name of one of your portfolio companies, and see all the information you want—up-to-date, consistent, and with all changes tracked. You’ll be able to analyze trends across the entire portfolio, identify risk, and compare each company’s performance to your investment thesis. And your LPs will notice that you answer their questions faster and send crisp, professional reports.

And about that install… Not every software package is a time-suck delivery system. Spend half a morning calling a few peers and you’ll quickly learn that some portfolio monitoring packages are surprisingly fast to install and easy to use. When you see how much time your team regains once it is freed from juggling those old-school spreadsheets, the only thing you’ll be wondering is why you stuck with Excel as long as you did.