High-quality financial information is the key to successfully managing your company. Financial reporting provides exactly the information that is crucial for you to get an accurate picture of the company’s situation and decide whether it is developing in accordance with management’s goals.
However, it is not enough to simply generate this financial information. The data on which the reporting is based must also be complete, i.e. error-free. In addition, the report information must meet the following criteria to enable rapid decision-making:
- Expedient
- Timely
- Adaptable
- Scalable
- Clear
What is financial reporting?
Financial reporting is reporting on the company’s most important activities or internal processes. This information can be displayed as tables, KPIs or graphically.
The main goal of reporting is to provide a quick overview of the company’s situation in order to optimize decision-making and create short, medium and long-term forecasts.
The reports are usually created once a month. This means that the relevant stakeholders receive a monthly snapshot and the data can be compared better and the budget can be monitored more closely.
To optimize your company’s reporting, you should consider nine important points in your practice:
1. Current and error-free accounting
It is important that the accounting documents and management information that underpin the reporting are free of errors. Accounting should reflect a true picture of the company and provide financial reports that facilitate decision making. In addition, accounting must always be up to date to enable timely financial reporting. In other words, reports must be complete, relevant and up-to-date.
2. Automation of accounting tasks
Automating routine accounting tasks proves to be the key to streamlining processes, especially in large companies. For this reason, many companies of a certain size have professional accounting software. This makes it possible to make certain bookings automatically, such as: B. Bank transactions or the digitization and automatic posting of supplier invoices.
3. Easy export of data
In order to create reports, dashboards and annual budgets, the required information often first has to be exported. Many CFOs and accountants use Excel or Netsuite Power BI as solutions for this. However, with professional financial software, important reports for management can be created directly. This means that fewer and fewer CFOs have to use external software such as Excel for reporting. More information on data export can be found on Acterys.
4. Full integration with management reporting software
Converting financial data outside of accounting software is prone to errors and slows down the entire reporting process. Therefore, the creation of financial reports should ideally be integrated directly into the overall process.
5. Continuous improvement of reporting
Reporting must constantly adapt to management’s new information needs and innovations. In addition to the data that is collected and published as part of the regular annual financial statements, financial data must also be created for the specific needs of management reporting. In addition, any innovations must be taken into account, such as: B. Open Banking, which makes it easier to integrate banking information and transactions into accounting software.
6. Provision of information at both consolidated and individual financial statement levels
Some companies prepare their financial statements in consolidated form. A good accounting software should therefore make it possible to create both reports
- level of the consolidated financial statements as well
- to prepare the individual financial statements of each individual company.
Consolidation should be possible not only between companies, but also between different departments and segments of the company.
7. Clarity
To facilitate analysis of report information and enable rapid decision-making, the data should be simplified and summarized into metrics or KPIs and presented graphically or in tabular form.
8. Adaptability
The information must be adaptable to the needs of the different recipients to whom it is addressed. So can e.g. For example, a department manager may require very detailed information about his area, while general management needs an overview of certain key figures summarized in the form of a dashboard.
9. Scalability
Reporting should be scalable so that the details of the data from which the metrics were derived can be viewed from the level of specific metrics or KPIs.
Top 5 Advantages of Professional Disclosure Management Software
Advantage 1: Flexible interfaces
A professional disclosure management solution is characterized by the fact that all data from common consolidation and ERP systems can be easily transferred into the business reports using flexible interfaces. This replaces manual data transfer and ensures that the correct numbers are shown in the report – both in tables and diagrams as well as in continuous text.
Advantage 2: Full MS Office integration
It is also important that the software has full MS Office integration, so that companies can create their reports as usual in MS Excel, MS Word and MS PowerPoint. Employees can continue to easily use their extensive knowledge of using the MS Office package and do not have to change.
Advantage 3: Automatic validation
Expert software for disclosure management makes automatic validation possible. The validation rules stored in the tool directly evaluate the processed data in the annual report and provide detailed feedback on a position-by-position basis about how valid the data in the report is. Numbers in tables and diagrams as well as numbers in continuous text are automatically evaluated.
Advantage 4: Mapping of company-specific requirements
Ideally, the software can be expanded with additional helpful modules. This means that special requirements for the creation of business reports can also be met. Here are some examples:
A corresponding layout module should enable companies to easily generate MS Word-compatible, print-ready business reports. The corporate design can also be implemented independently in the annual report without an external agency.
Ideally, the software tool supports companies in automatically generating many similar business reports (e.g. individual financial statements) on an “assembly line”. This simplifies the comprehensive preparation of individual financial statements.
An integrated ESEF module serves as a solution for companies that need to add XBRL tags to ESEF-compliant annual financial reports.
Advantage 5: Flexible output formats
When choosing the right disclosure management tool, make sure that it is able to generate your desired output format at the push of a button: both MS Excel, MS PowerPoint and MS Word.
Conclusion on optimized financial reporting
In addition to professional software, there must also be sufficient human resources at all levels, as everyone involved in the process is important to ensure reliable and appropriate reporting. Accountants ensure the integrity of accounting information, managers utilize the full potential of reporting and can engage in important analysis of the financial data provided. In the end, those responsible make the best decisions for the company.
And even though all of these points are important, they can be summarized in one thing: When it comes to management reporting, rely on professional software that delivers high-quality reports and that meets the requirements of the various decision-makers in your company.
