By Rob Douglas, Vice President, UKI & Nordics at Adaptive Insights
Many businesses are aware that their current financial reporting processes are not as effective as they could be. So much so that a CEB survey of accounting and finance professionals on their reporting skills found that only 46 percent believe they are effective in meeting stakeholder needs. For many finance teams, the reporting process is cumbersome. It includes manual gathering and verification of data, and re-keying and rolling up that data using spreadsheets. Dealing with a large number of spreadsheets means finance teams do not have the time they (and their bosses) would like to spend on analysing performance.
Yet finance is expected to play a strategic role, helping the organisation to drive performance. So, while change is hard, sticking with the same processes may be harder in the long run. By streamlining financial reporting processes, finance teams can free up time for the value-added analysis needed for strategic decision making.
Here are four steps to streamline financial reporting:
- Move financial data to the cloud
While spreadsheets are low-cost and easy to use, the time that staff spend on building reports comes at a cost to the business and ends up leaving money on the table. This is not least because staff have the pain of gathering data from a plethora of sources.Additionally, they are having to wait as staff from across the business manually integrates and reconciles data, creates and checks formulas, updates charts, and formats reports. Then there is the inevitable questions and change requests to come as the report or report book is circulated.
The first step towards effective financial reporting is to make all the relevant financial data available in the cloud. By making sure that data is not buried in separate reports and spreadsheets that need to be continuously hunted down, everyone involved can have easy access to only the most up-to-date information. This way, finance teams can spend more time making well-informed business decisions.
- Empower users with self-service
The more systems, people, and data in an organisation can all slow reporting down. Indeed, reporting that once took a few days, suddenly takes a few weeks. In addition, instead of two business analysts, it's now four…or six…or eight or more. This can be attributed to two factors; having multiple systems that are not integrated and redundancy caused by users throughout the organisation that repeat the same data-gathering tasks.
One way to improve financial reporting processes is to empower users through self-service solutions. By allowing users to instantly retrieve the report they need themselves, instead of relying on others, they can have real-time access to business-critical data—and it does not matter how big the company gets. This is not only beneficial in terms of productivity, but also in terms of a business' bottom line.
- Provide a single source of truth
Relying on manual, spreadsheet-based reporting exposes business to substantial risks, as it allows for minor errors to cause big problems. While time efficiency is a great asset to the reporting process, it will not be beneficial unless the quality of the financial data is robust.
According to Accenture, 84 percent of organisations struggle to guarantee the quality of their data*.One way for them to gain confidence in their data is to move all their hierarchies, calculations, data, and security to a place accessible by everyone who needs it. This way, if an error is detected, one person can correct it swiftly and in one place only. To put it simply, everyone has the same view and is checking the same data for quality.
- Work in concert with other departments
To make strategic business decisions based on the data available, finance teams can't only look backwards. Instead, they should look at the entire picture, including the past, present, and future clearly and accurately.This means combining effective reporting and analysis with planning and forecasting. While this requires collaboration with other departments and teams, it is also critical to get a holistic view of the organisation. And, instead of constantly producing data, get everyone to agree on the same KPIs, metrics, calculations, and reports, streamlining the process.
Ultimately, finance teams play a strategic role in driving business performance, but manual financial reporting procedures are slowing them down. Leaders need to take stock of their processes and technology so that they can concentrate on what really matters—driving the business forward.