4 Steps to Improve Your Business Reporting Process
Late nights. Working over the weekend. Learning the names of every barista within a quarter-mile radius of the office. If you’re in charge of creating financial reports, you don’t need me to tell you how much work it takes to keep information updated and accurate.
That’s because you’re likely logging into multiple systems to pull information while working with incredibly large amounts of data. The more systems and data, the more effort it takes to model and analyze for presentation.
You certainly have plenty of information to work with. In recent years, the amount of data available to finance departments has exploded. So why is it still so hard to create timely, accurate, consolidated, and easy-to-digest reports—reports that combine financial and non financial data to help leaders across the organization spot trends early?
In our survey on the topic of reporting, only 46% of accounting and reporting teams saw themselves as effectively meeting stakeholder needs. Why the poor marks—and what can you do to solve the problem?
At the same time, all this data is more valuable than ever. When done well, financial reports can provide insights into the past, present, and future, helping the entire company manage volatility, navigate organizational complexity, meet compliance requirements, and drive the direction of operations. As a result, financial reports have never been more necessary to run the company or more in demand by your boss.
What is at stake?
Instead of looking into the rear-view mirror—a static approach to planning that reports on what happened in the past—it’s far more effective for finance teams to look out the windshield and anticipate what’s ahead. This is doubly true if your competitor can spot a new market opportunity while you’re still running around trying to get accurate historical info.
Active planning not only changes how you do your job; it has the potential to recast how finance is viewed throughout the organization, strengthening relationships with business partners and shifting FP&A teams into a leadership and guidance role. In short, finance becomes a value-adding intelligence provider that the board and business units can depend on to support more informed decisions.
4 Reporting Challenges:
1. Verifying accuracy
The ability to quickly and consistently produce updated financial reports improves speed and accuracy.
In our report on the evolving role of the CFO, 13% of CFOs stated they will move their finance team to a shared service model, continuing the trend for teams to move automated finance processes to a centralized function to save time and resources and reduce errors. CFOs who automate data gathering can instill a greater level of trust in the data, while making it easier to reveal valuable insights.
2. Wrestling data from multiple systems
With more organizations tracking nonfinancial metrics, corporate reports include increasing amounts of operational data. Using traditional reporting methods to access and incorporate such information—usually housed outside of finance—creates an additional burden. Spending hours or days hunting down data, confirming its accuracy and consistency, and formatting reports so that they can be digested by those outside of finance drains FP&A productivity.
In our survey on the challenges of assembling corporate reports, respondents also identified data gathering as the reporting process most needing improvement (32%), followed by verifying data accuracy (21%). This is consistent with our report on breaking down silos, which revealed that 47% of CFOs continue to manually aggregate data from disparate systems.
Unifying operational and financial data into a single centralized repository can vastly decrease reporting time and improve accuracy. With a single source of truth, finance teams can refocus the conversation around insights and action instead of debating accountability and accuracy.
3. Lack of collaboration
Communication and collaboration are constant reporting challenges, especially when it comes to variance analysis. Does this scenario sound familiar? A report identifies a variance and is emailed out for review, triggering the inevitable volley of variance queries and change requests ... only to result in the report being forwarded to those closer to the business for answers. If variance explanations were included in the initial reporting, that would be true collaboration.
Nearly three-quarters of CFOs identified collaboration as a top initiative. Finance teams may benefit by developing or buying a tool that supports and controls collaboration, increasing company-wide engagement and accountability in the reporting process.
4. Data interpretation
The more the organization understands the story behind the numbers, the greater the chance it has to operate as a data-driven organization—and the more effective you can be in getting your message across to key stakeholders.
Consumers of finances’ insight seek more than just numbers; they want to understand the impact and implications of the data we present. According to our report on collaborative finance organizations, 53% of CFOs intended to formulate a data visualization strategy in the coming year.
Intuitive dashboards with data visualization are a great way to build a story that clearly shows current performance, future trends, and possible scenarios. Develop or choose a dashboard that allows finance the flexibility to quickly and easily deliver data in a range of formats desired by stakeholders.
So how can you make reporting more efficient, more effective, and less reliant on espresso?
4 steps you can take to improve your reporting process
Step 1. Centralize your data/Provide a single source of truth
It might sound scary, but without a central data system you’ll waste countless hours dealing with multiple source systems to pull information. And it’s only going to get worse. Industry experts predict that the digital universe is going to double in size every two years, growing from 4.4 trillion gigabytes in 2013 to 44 trillion gigabytes by 2020. As businesses introduce more and more systems to track every last bit of data, you’re going to simply run out of time if you keep trying to pull all that information separately and manually.
A core set of operational and financial data that’s common across the company enables greater visibility and facilitates consistent performance communication. A single source of truth allows finance to quickly gather data, eliminate spreadsheet proliferation, accelerate decision-making, and focus on data insights. In short, a single source of truth can not only help finance save time in reporting, but also free finance to generate keen insights and drive organizational alignment.
Step 2. Tailor your message
Not everyone speaks accountant. Your reports aren’t always going to be read by finance professionals. You need to understand the needs of your audience and create reports appropriately. That way, the reporting process becomes a strategic conversation instead of just a wall of numbers. For example, operational leaders might want detailed metrics on their unit, while executives may require a higher-level summary of the entire business. The more you can provide relevant information, the more value your reports will provide.
Step 3. Get visual
Ask any toddler at bedtime: Stories are always better with pictures. It’s no different in reporting. Data visualization, like charts and graphs, is crucial to good analysis. Not only is a picture worth a thousand words, but it can help you understand the worth of a thousand numbers.
Visually compelling dashboards give finance the power to tell the full story. Dashboards avoid the trap of overly detailed reports and data downloads, instead clearly showing data in formats that provide context and clarity. When data gets presented in highly visual and familiar formats, business users can quickly see challenges and opportunities that otherwise might have been missed. Rather than rely solely on weekly or monthly reports, finance can generate dashboards that provide fast feedback of financial results, summarized and shown as trends and moving averages. KPIs can give managers early warning when problems are brewing and action needs to be taken.
Step 4. Enable self-service reporting within a collaborative culture
If you had a nickel for every time you had to pull a report for another department, finance would be the most well-funded department in the company. Sure, you’re happy to help, but pulling reports for everyone else means less time to work on your own valuable strategic activities. By enabling self-service reporting and dashboards, the finance department can take its time back while empowering other departments to get the data they need in seconds instead of waiting for weeks.
Deep collaboration with operational departments generates effective decision support and drives improved performance, elevating finance to a true business partner rather than a back-room number cruncher.
You don’t need to invest in complex IT systems that consume valuable time and money without providing reasonable value. Instead, implement a dedicated system that uses cloud-based technology to enable unlimited numbers of managers to work together on driver-based forecasts, which are automatically aggregated at every level. And when you empower business users with self-service, they can get the reports they need themselves, freeing your team from producing manual monthly reports.
Smaller businesses may be able to manage this through process changes and closer collaboration. At some growth point, a Corporate Performance Management system that manages many of the error prone, time delay, data starved uses manual systems are plagued with will be worth looking into.
Overcome your reporting challenges and bring greater insight into your business by centralizing data with one source of truth, tailoring the messages to each of your audiences, using visualization to create quicker comprehension and creating a self-service but collaborative culture.
For more details on items italicized above and the eBook Plan to Win click on the bullet point links below:
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