Making the kind of well-informed judgements needed to manage a successful business requires the use of financial reports. But the manual, slow, laborious, and error-prone financial reporting procedure is common in many businesses.
Collecting, aggregating, and reporting financial data from many sources gets increasingly difficult when your company becomes more sophisticated and runs multiple divisions, business lines, or locations. End users, meanwhile, don’t always have access to the data they require to make wise decisions.
These 5 tips can help you make your financial reporting better, ensuring that it is accurate, timely, and efficient in providing the information your end users require across the company.
1. Recognising the needs of your audience
In your firm, many functional groups will probably want access to various types of financial data in order to make choices that are pertinent to their areas of responsibility. What a department head might need to know is significantly different from what the board of directors anticipates.
Engage them in discovery dialogues to establish what data they need to see, how often, and at what level of detail they need to see it in order to make sure each end user group in your business has access to the information it needs to function properly.
Discover how each end user group plans to use those financial reports by going a bit further. This understanding will enable you to carry out advice #2.
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Personalise Your Reporting
Once you have a solid grasp of the requirements and preferences of each user group, you can customise their financial reports to best meet their requirements, use data visualisation to highlight the information they want to see most, and remove extraneous information that just adds clutter.
For instance
- Every quarter, the board of directors will usually demand a thorough presentation deck. A balance sheet, income statement, cash flow statement, and a statement of actual results vs. budget are likely to be included in the deck’s financial reporting section. The deck will be more helpful if you can emphasise the information that the board needs to see using dashboards and data visualisations.
Standard financial statements such an income statement, balance sheet, and cash flow statement should be sent to senior management at least quarterly. Additionally, they could require financial models that enable them to compare actual performance over time to estimates at the corporate level. They can focus on the things that need the most attention by using data visualisations that direct their attention to the most pertinent patterns or exceptions.
Reviewing the budget variance for their department can help department leaders identify whether and how real spending surpassed or fell short of budget and whether cost-cutting is necessary. Other financial reports can assist department managers in determining the efficacy of a strategy and making adjustments to improve results, which is crucial for activities like marketing.
Investors will require a pitch deck with precise, readable financials. Investors frequently demand to see key performance indicators (KPI) pertinent to your industry in addition to the income statement, cash flow forecast, and sales forecast. The average revenue per user and the monthly churn rate are two examples of metrics that a SaaS technology company will need to report on.
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Create efficient, standardised reporting processes
- Your financial reporting procedures will be more accurate and timely as long as they are effective and consistent. These best practises can assist your accounting and FP&A teams in streamlining and improving their financial reporting processes:
- Create procedures that guarantee all parties engaged in financial reporting are operating from a single, reliable data source. Use technology to speed up the process and guarantee accuracy if you need to gather data from several sources (as mentioned in tip #4).
- Use collaboration technologies that let several people working on the same documents simultaneously in the accounting, finance, or other fields. For improved version control, this offers an efficient audit record of the changes made during the report generation process
- Avoid using shared drives that make it difficult for teams to work together and that simply complicate and slow down the financial reporting process.
- Don’t just use Microsoft Excel for financial reporting. Spreadsheets demand a lot of ineffective manual labour in addition to the high danger of errors, inaccuracies, and data integrity problems, opening your firm to financial and reputational concerns. Additionally, they slow down the procedure, delaying the delivery of timely, useful information to decision-makers.
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Utilise technology
With the correct technology, you can do away with time-consuming manual tasks, expedite the reporting procedure, and provide useful, actionable financial reports. The secret is to select the technological options that best suit your requirements. just like a recruiter chooses a recruitment platform to hire candidates
Because they’re simple to use, don’t need software administration activities like backups and installs, and automate routine tasks like bank reconciliation and transaction importing, cloud-based accounting solutions like Sage Intacct are popular choices among businesses.
It can be advantageous to link your accounting solution with a reporting platform that offers more sophisticated features and flexibility as your organisation expands and becomes more complex. For instance, cloud-based systems for custom dashboards make it simple to handle currency conversions and collect and combine financial data from many sources and businesses.
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Data visualisation can be used to provide insights.
Have you ever pondered, “Exactly what is this report telling me?” after viewing a financial report? Data visualisation is becoming into a must-have skill as senior management, investors, and the board want finance to give actionable insights that may advance the business.
Charts, infographics, maps, and other visual elements are used in data visualisation to tell a captivating story that goes beyond the numbers. It’s perfect for assisting executives in finding trends, patterns, exceptions, and opportunities—exactly what you need to find to make the best choices.
As examples like these show, data visualisations can assist you in quickly and confidently interpreting and comprehending huge amounts of financial data. They may also quickly combine data from many sources and automatically produce important metrics and ratios, such as growth or decrease rates based on fresh data inputs (which is critical if your business uses multiple financial systems across different business units or geographic regions).
Who we are
Itas is a multi-award-winning Sage partner. Having started in 1995 with just one customer, we now support over 200 clients nationwide. They know we are always there to provide a helping hand, whenever they need us. Trusted by our customers for over 20 years, Itas has been built on referrals from customers and IT professionals that love the expert yet personal service that we offer.
The only business financial solution suggested by the AICPA is Sage Intacct, the best in-breed financial management tool ranked No. 1 in customer satisfaction. Perhaps this explains why firms providing professional services, including Tandem HR, Cameo Global, Smith Systems, and others, rely on Sage Intacct to streamline, automate, and speed up their accounting processes and propel their businesses to new heights of success.
If you would like to know more about how Itas can help your business with finance automation, Sage implementation and improve purchasing control, you can get in touch at info@itassolutions.co.uk, call us on +44 (0) 1824 780 000 or contact us via our website at itassolutions.co.uk.
