How Causal plans to eradicate Excel spreadsheetsby
UK Startup Causal plans to succeed Excel with a more data-driven collaborative approach. Nick Levine investigates whether Causal has the goods to meets its ambitions.
Causal is a new venture-backed UK startup seeking to replace Excel by creating a collaborative, data-driven cloud-based tool. Investors include Passion Capital, who provided Monzo’s seed capital.
The spreadsheet software enables accountants and finance teams (alongside several other user cases) to complete financial analysis with a similar level of functionality to spreadsheets but in a much more user-friendly way.
The tool aims to make it easier and faster for users to create financial models, forecasts and provide business insights. From a client perspective, it potentially creates better opportunities for engagement through collaboration features and visualising data in different ways at the click of a button.
While there are many cloud tools delivering forecasting, cashflow and reporting (ie Spotlight, Futrli, and Fathom), Excel (alongside Google Sheets) is still an essential tool for accountants to have within their armoury.
Is Causal an Excel killer or a cloud-based tool that under-delivers on its promises?
What is Causal trying to achieve, and how is it different to Excel and other cloud tools?
As a Nested data scientist, Taimur Abdaal’s role was heavily geared toward financial modelling. His frustration with the lack of collaboration options with Excel modelling’s lead to founding Causal. Proptech Nested’s forecasts were consequently siloed within the finance team alongside, and missed functions providing inputs related to revenue drivers.
Casual creates cloud-based models that are easily shareable across various stakeholders. Unlike other tools, it allows shared models to be edited and saved as new versions securely. This enables individuals to make changes based on their own specialist knowledge, ie sales teams having up-to-date visibility on future revenues.
Additionally, Causal aims to save significant time for its users through automation by connecting and pulling data from a number of different sources. It is differentiated from other cloud forecasting and reporting players by having connections to a number of non-accounting integrations, including Salesforce, Google Analytics and Hubspot. The functionality appears to overcome the limitation of cloud tools of only importing operational data through fiddly CSV spreadsheet uploads or manual entry.
How can accountants incorporate Casual into their workflows?
Casual may be suitable for firms with a strong advisory function related to forecasting and fundraising.
Causal is designed to be easy to use, and “has the familiarity of spreadsheet rows and takes users six to eight hours to get comfortable” with the software, according to Abdaal.
Similar to other cloud providers, Causal lets users build formulas by using named line items in the financial statements and blending them with non-financial data (ie revenues multiplied by customer numbers).
While it can configure any type of financial model, utilising it for cashflow forecasting for an SME may be over-engineering a user case. Instead, it is likely to be more suitable for accountants to build and maintain detailed multi-year models for clients, monitor business performance, or raise additional funding.
For firms using Causal for CFO type services, the key benefit is time saved from importing and entering data, and incorporating complex adjustable assumptions around revenue and costs.
“Most finance teams spend at least five to ten hours every month pulling in data. Causal lets accountants and finance teams automate tedious work and work on the more strategic parts of their roles,” said Abdaal.
Attivo Partners, a US-based accounting firm that specialises in servicing growth companies use Causal to support annual planning and fundraising activities. Once Causal models are set up, the firm uses it to provide monthly forecasts to actual analysis at client board meetings.
“As client business models evolve and become more complicated, Excel becomes harder to manage and maintain. The formulas and file sizes can become unwieldy. Causal provides a more stable and easier modelling platform to work with,” commented Attivo Partners VP of finance Scot Mollot.
How likely are accountants to consider switching to Causal?
While Causal gives Excel a run for its money in terms of its ease of use, functionality and collaboration features, it is unlikely to replace Excel, Google Sheets or cloud forecasting tools in most firms.
Aside from not specifically targeting accountants in practice, its pricing structure is relatively prohibitive. The Pro version costs $50 per month per user, and the superior Business version is priced on a bespoke basis starting at $1000 per month.
It is currently marketed as a premium product for enterprise-level companies in industry. However, Excel and other cloud providers are likely to be better suited to most firms, given the needs of most clients are likely to be around cashflow and relatively simple forecasting than complex modelling.
While the editable collaboration features are value-adding, these are unlikely to be used by clients unless firms are truly embedded within their businesses.
Causal is still a relatively young company, so it will be worthwhile following how the product develops over the coming years and months to see if it is likely to generate significant uptake with accounting practices
You might also be interested in
Nick Levine is a chartered accountant and journalist, with a particular interest in fintech. He was formerly the Advisory Lead at Deloitte’s Propel and the Head of Enterprise for ICAEW. His writing portfolio includes The Times, Wired and Real Business.