Financial reporting teams face a lot of challenges every passing year with an increasing volume of data reconciliations, report consolidation, spreadsheet searches, evaluations, error correction, approvals, and other tasks as firms gather data from many systems and departments. In addition, the frustrations and hours spent owing to manual activities involving numerous employees, from updating multiple spreadsheets to managing multiple PDFs and so much more come along.
The expanding firm operating structures are a significant driver of data demands. A survey of 500 large corporations stated that more than half of them have more than ten business units. In the meantime, over 60% of them have formed new legal companies or moved to different countries in the last three years. As a result, three-quarters of businesses use more than five financial reporting systems, and more than 66% file more financial reports now than they did three years ago.
Suppose manual processes are still the primary means of driving the information pipeline from companies and subsidiaries to the parent firm. In that case, that complexity is sure to create data governance and data transfer concerns.
Six steps to strengthen your processes:
You must consider some basic concepts for enhancing the financial reporting process, regardless of how experienced your team is. Following are the six processes that every well-designed financial reporting framework must include:
1. Gather and standardize your information:
- Create a set of adaptable templates that allow contributors to contribute both unstructured and structured data consistently.
- Use a consistent data gathering procedure to normalize your data and eliminate the need for reformatting.
2. Make a list of all the information you have:
- Create and construct datasets that can be controlled using tags, filters, and other metadata controls.
- Create a set of report guidelines, templates, or standard formats that may be used throughout your company.
- To maintain data integrity, use permissions to limit who can view and edit specific documents, pages, or spreadsheet cells.
- Many of us produce material that fails to effectively represent our point of view because we don’t know how to explain such complex concepts. Hence to present and explain the complex business concepts and findings, consider incorporating Harvey Balls.
3. Work with data from a single source:
- Keep all of your info in one location.
- Create linkages between source data and all connected destinations to propagate any changes to a figure to all destinations.
- To avoid errors and omissions, ensure everyone downloads information from the source repository.
4. Collaborate with people from different parts of the company:
- Establish a secure financial reporting environment in which users can operate simultaneously rather than one at a time.
- Avoid processes that involve shared discs, checkout systems to save time.
- Instead of renaming and resaving files, answer version control queries with a single complete document with an independent audit into modifications.
5. Review, get approved, and sign off on the same document:
- Create a collaborative environment where remote authors, editors, reviewers, and auditors can collaborate on the content rather than work in isolation.
- Set expectations that everyone will leave input in the document rather than in emails or over the phone so that everyone can keep track of the group’s queries, responses, and remedies.
6. Keep all final reports in one place:
- Provide everyone with the financial reporting team access to the same source data.
- Streamline the process of finding the most up-to-date information for dashboards, narrative reports, workbooks, and presentations.
- Use a report from the prior period as your starting point for the current one to enable rolling forward easier.
Ways in which Business Reports Help Your Business Grow:
Business reports are beneficial, but do you know why? Business reports can tell you so much about your business, not only this, but they can help you operate your business more efficiently and profitably—given all the other duties that go into running your firm. The daily business data you collect may be utilized to create a variety of reports, among which few are as follows:
1. Employee Return on Investment:
Return on investment is indeed difficult to track, but a Revenue by Employee report can showcase who is your most valuable asset and who has to improve. Having it, you will not only get to know who your most valued employees are, it will also enable you to start a conversation with one who is underperforming. You can easily find if they require the addition of a team member to their project? Or maybe some extra tools to help you be more efficient? It is always less expensive to assist an existing employee than to hire a new one!
2. Discovering Profitable Products:
Analyzing the rate of sales for the service bundles or products you sell can be extremely useful. You may have underpriced a product if it is flying off the shelves. It could also be time to change the services included in a not selling bundle. This information may not be visible unless you compare the performance of your items in a business report side by side.
3. Cash Flow Management:
Businesses have expenses that they can not afford to pay if they don’t have consistent income. A Cash Flow Statement is a financial statement that shows how much money is coming in and going out of your company. Having a business report, You will get a feel of how well your company is doing and how quickly you will be able to adjust to market developments. In contrast, A loss and profit statement illustrates your revenue minus your expenses over time. You can look at the Expense Detail if your business expenses are very high. This way, you will immediately know which category is the most expensive—enabling you to make required adjustments. Knowing when the project is ready to be invoiced is another advantage of using business reports to track your cash flow.
4. Monitoring Client Performance:
Have you felt that your client is unjust, like having been paid for 6-8 hours because your estimate was too low; however you are working for 12 hours? Or are the project’s unbilled expenses so large that there is no profit? What about clients that are always late with their payments? There is so much to answer in this concern.
Having an Income Client report can record everything. For instance, it showcases the total revenue made by each client for the period you specify, while an Accounts Aging report will tell you who requires to have a late payment penalty clause added to their contract right away!
5. Keeping an Eye on Sales Trends:
You probably think you know why and when your business grows or shrinks, but compiling a report may reveal sales trends you had not seen before. For example, make sales of a certain product increase at certain times of the year? Is there a spike in demand for higher-priced service packages around tax season? If this is the case, you may need to change inventory, recruit temporary workers, or hold a sale. You’ll also have useful data to help you decide when and how to spend your marketing budget.
A bookkeeper, of course, may assist with any further data entry that is required. Still, Organization reports are the best investment in helping your business thrive since they provide accurate, dependable data and a way to arrange it.
Conclusion:
Summing this essay here hoping that the discussion above has answered any questions you may have about your worry. We promise you that considering this content will not harm you but will enhance your professional performance.
