5 Ways to Improve Financial Reporting Efficiency (+ Case Study)
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Published:
October 13, 2023
Reading Time:
6 minutes
Ever wondered why some companies can get their financial reporting done effortlessly while others struggle to keep up?
Or why do some businesses consistently provide stakeholders with timely and accurate financial insights, while others struggle with manual processes and data discrepancies?
You see, in the corporate world, financial reporting is key to decision-making. Whether you want to expand the business overseas, launch a new product, or hire more talent, youâll need to look at your finances first. This means that almost everything else in business depends on finance. Therefore, your financial reporting processes must be as efficient as possible.
In this article, we will explore the five innovative ways to modernize and streamline your financial reporting. This will enable you to provide more accurate and timely information while reducing the burden on your finance team.
So, letâs dive into it.
Or why do some businesses consistently provide stakeholders with timely and accurate financial insights, while others struggle with manual processes and data discrepancies?
You see, in the corporate world, financial reporting is key to decision-making. Whether you want to expand the business overseas, launch a new product, or hire more talent, youâll need to look at your finances first. This means that almost everything else in business depends on finance. Therefore, your financial reporting processes must be as efficient as possible.
In this article, we will explore the five innovative ways to modernize and streamline your financial reporting. This will enable you to provide more accurate and timely information while reducing the burden on your finance team.
So, letâs dive into it.
KEY TAKEAWAYS
- Efficient financial reporting is very important in the corporate world as it plays a key role in decision-making and business operations.
1. Use Financial Reporting Software
In this digital age, thereâs software for almost every aspect of business. And guess what? Financial reporting is no exception. Imagine compiling huge sets of data with a click of a button and using an array of templates to create sharp and professional reports.
Now, selecting the best financial reporting software depends on your specific needs and the size of your organization. But here are some of the most popular ones:
Besides these, you could also try QuickBooks, FreshBooks, Zoho Books, Oracle NetSuite, Board, and Multiview ERP, to name a few.
Automation not only improves efficiency but also liberates your finance team to focus on more strategic and value-added tasks. Believe it or not, in this day and age, even your team doesnât want to engage in manual, repetitive tasks.
Tools like Xero, Expensify, and SAP Business One allow you to automatically gather data from various sources, ensuring accuracy and saving precious time. Imagine the freedom of not having to copy-paste your way through spreadsheets or chase down elusive numbersâhow convenient!
For example, "Cleaning Supplies" could be listed as "Office Expenses" in one department and "Supplies" in another. This minor inconsistency can make it challenging to compare and consolidate financial data accurately. Also, without a standard COA, manual errors in data entry and categorization are more likely to occur.
Thatâs why standardizing COA is the right step towards superior financial reporting. When everyone follows the same set of rules for categorizing expenses, income, and assets, the finance team has a clear roadmap through the financial landscape.
Data visualization in financial reporting involves turning complex financial data into an insightful story.
Imagine this: Instead of drowning in rows and columns of numbers, stakeholders are greeted with colorful, dynamic graphs and charts. These visuals can make financial reporting a heck of a lot of fun by making it easy to spot trends, outliers, and key insights at a glance.
Remember this: It's not just about aesthetics, it's also about clarity and efficiency. Data visualization is all about turning complex financial data into an easily digestible version. The type that stakeholders can quickly grasp without wading through pages of text and tables.
This is why high-grade security measures are key in financial reporting. Financial data is a treasure trove for cybercriminals, and without proper security measures, your organization can be vulnerable to data breaches. These breaches can not only cause huge financial losses but can also result in legal troubles and a tarnished reputation.
There are several steps that you can take to protect your financial data. First, you can invest in strong encryption, which involves scrambling your sensitive information into an unreadable format using complex algorithms.
Secondly, you can use multi-factor authentication (MFA) to add an extra hurdle for potential attackers. Moreover, strict access controls can ensure that only trusted, authorized personnel can access financial data.
Now, selecting the best financial reporting software depends on your specific needs and the size of your organization. But here are some of the most popular ones:
- Xero: If youâre a small business that wants to automate admin and save hours of paperwork, Xero is the platform for you.
- NetSuite: Okay, so NetSuite is a comprehensive cloud-based ERP system with robust financial reporting features. This one is for the big players.
- Tableau: Although itâs primarily a data visualization tool, Tableau can also be used for in-depth financial reporting and analysis when integrated with financial data sources.
- MYOB: MYOB Advanced Business, as the name suggests, is an advanced piece of software that can handle more complex financial issues across your business.
Besides these, you could also try QuickBooks, FreshBooks, Zoho Books, Oracle NetSuite, Board, and Multiview ERP, to name a few.
2. Automate Data Collection and Entry
Are you still entering loads of data manually? The manual data entry grind, while once a necessary evil, can now be a thing of the past. With the right software and tools at your disposal, you can streamline this boring and time-consuming process and reduce errors.Automation not only improves efficiency but also liberates your finance team to focus on more strategic and value-added tasks. Believe it or not, in this day and age, even your team doesnât want to engage in manual, repetitive tasks.
Tools like Xero, Expensify, and SAP Business One allow you to automatically gather data from various sources, ensuring accuracy and saving precious time. Imagine the freedom of not having to copy-paste your way through spreadsheets or chase down elusive numbersâhow convenient!
3. Create a Standard Chart of Accounts (COA)
The chart of accounts is your one-stop shop to view all the financial transactions for an accounting period. But hereâs the problem: Without a standardized Chart of Accounts (COA), financial data analysis and reporting can be a chaotic and error-prone process.For example, "Cleaning Supplies" could be listed as "Office Expenses" in one department and "Supplies" in another. This minor inconsistency can make it challenging to compare and consolidate financial data accurately. Also, without a standard COA, manual errors in data entry and categorization are more likely to occur.
Thatâs why standardizing COA is the right step towards superior financial reporting. When everyone follows the same set of rules for categorizing expenses, income, and assets, the finance team has a clear roadmap through the financial landscape.
4. Leverage Data Visualization
You see, even if you use the best software, data can still be overwhelming. This is because itâs usually filled with long numbers and percentages that might be complicated for stakeholders. This is when data visualization comes into play.Data visualization in financial reporting involves turning complex financial data into an insightful story.
Imagine this: Instead of drowning in rows and columns of numbers, stakeholders are greeted with colorful, dynamic graphs and charts. These visuals can make financial reporting a heck of a lot of fun by making it easy to spot trends, outliers, and key insights at a glance.
Remember this: It's not just about aesthetics, it's also about clarity and efficiency. Data visualization is all about turning complex financial data into an easily digestible version. The type that stakeholders can quickly grasp without wading through pages of text and tables.
5. Beef Up Financial Security
Since the beginning of time, finances and security go hand in hand. When thereâs money involved, there will always be some people around to misuse it. As they say, âThe good guys need to be lucky every single time, but the bad guys only need to be lucky once.âThis is why high-grade security measures are key in financial reporting. Financial data is a treasure trove for cybercriminals, and without proper security measures, your organization can be vulnerable to data breaches. These breaches can not only cause huge financial losses but can also result in legal troubles and a tarnished reputation.
There are several steps that you can take to protect your financial data. First, you can invest in strong encryption, which involves scrambling your sensitive information into an unreadable format using complex algorithms.
Secondly, you can use multi-factor authentication (MFA) to add an extra hurdle for potential attackers. Moreover, strict access controls can ensure that only trusted, authorized personnel can access financial data.
Bonus: Case Study | Improving Financial Reporting for Lighting Company
Surely, data visualization and security are great steps to improve your financial reporting. Also, automating data entry can also reduce risks of error significantly. But thereâs one more tip that weâd like to give when it comes to financial reportingâhire experienced freelance consultants.
Here at Consultport, the world's leading online consulting platform, we have over 10,000 experienced consultants in our talent pool. Recently, we helped a Netherlands-based company find a highly experienced interim Head of Controlling.
The client chose a candidate with a Big 4 background and over 15 years of experience in optimizing financial reporting and controlling processes. And 72 hours later, our interim Head of Controlling was on boardâtold you weâre quick!
This was just a small gist. In case you want to read the entire case study in detail, hereâs the link.
And if youâd like us to find you an experienced, senior consultant whoâs ready to solve your biggest problems, get in touch with us now.
Here at Consultport, the world's leading online consulting platform, we have over 10,000 experienced consultants in our talent pool. Recently, we helped a Netherlands-based company find a highly experienced interim Head of Controlling.
The problem
Imagine trying to find your way in the darkâthat's exactly how our client felt about their financial reporting process. Inefficiency was casting shadows on their ability to track financial performance effectively, and they needed an expert to fix this problem.Enter Consultport
Here at Consultport, we believe in quick results. So, we sprang into action quickly and presented two stellar candidates to the client within just 24 hours.The client chose a candidate with a Big 4 background and over 15 years of experience in optimizing financial reporting and controlling processes. And 72 hours later, our interim Head of Controlling was on boardâtold you weâre quick!
The result
Thanks to our interim Head of Controlling, our client's financial reporting process became more efficient than ever. Data entry errors were obliterated, employees became financial reporting wizards and the result? Well, more accurate, frequent, and on-time financial statements that could light up the darkest roomsâjust what a lighting company needs.This was just a small gist. In case you want to read the entire case study in detail, hereâs the link.
And if youâd like us to find you an experienced, senior consultant whoâs ready to solve your biggest problems, get in touch with us now.
