Having access to data is one of the most important factors that come into play when running a business. Technology has made it easier over the years when it comes to collecting and presenting data, but having the most current and advanced technology will keep a company's reporting on top.
All systems are not created equal and choosing the wrong solution can severely limit an organization's ability to leverage the information they have and ultimately impact performance. With this in mind, here are some signs that a company's analytics capabilities may be holding it back.
Using the wrong tools. Aside from the typical financial reports that a come standard with an accounting or ERP system, most companies will always need to create custom financial reports for specific scenarios or metrics. In the past, creating as-hoc reports was a very technical and labor-intensive process. If creating these reports is still labor-intensive and time-consuming, the company is using the wrong tools for reporting.
Utilizing spreadsheets for report creation is also a dated method. Working with spreadsheets increases the risk of reporting errors and does not pull data from other software without doing it manually. Spreadsheets utilize static data, rather than real-time data. Almost immediately after a report is created on a spreadsheet, it is out of date. To ensure accuracy, they must be updated regularly which tends to be a manual process that is not efficient for the company.
Inflexible reports. Pre-formatted reports are usually available through accounting and ERP software, however not all businesses are structured the same way. While these pre-formatted reports are good starting points, changes must be made to be tailored toward a specific company. Financial statements may need to be tailored to present data in different ways for different audiences. Different levels of detail within reports vary across areas of a company. Utilizing an accounting software or ERP system is very important to allow easy changes and modifications to the reports a company will run for its internal staff, shareholders, clients, etc.
Inaccessible data. The ease of accessing data for reporting directly affects how smoothly and quickly a company can compile these reports. By providing centralized access to data from different departments, an ERP system makes this easy. If information is being captured within the system, it should be available for analysis by all parties that would benefit. If a business is using separate systems that do not mesh, or spreadsheets, this may not be possible. The analytics ability of a company may just be limited to basic financial reports that are generated by the accounting software and it would be difficult to take other factors into consideration.
Limited Key Performance Indicators. Key performance indicators (KPI) are important management tools that help organizations focus on achieving specific objectives. They allow managers visibility to performance and progress toward certain targets. No two companies are the same and KPIs are typically tailored to an individual company. Having a system in place that allows you to track industry-specific KPIs is crucial to reporting. You can't manage what you can't measure, so having the right KPIs is essential.
Lack of Dashboards. With dashboards, you are ensured the virtual accounting insight and analysis you need through easy-to-understand, real-time, dynamic displays. Having the main hub of information that is easily visible the time it takes to search for information is greatly reduced for increased efficiencies in financial reporting. Accuracy is also increased due to the real-time data on hand, rather than having to update spreadsheets or other records on a daily, weekly, or monthly basis.
A comprehensive business management software is the key to stepping up your financial reporting game. Systems like NetSuite gives companies the tools needed to produce meaningful reports, track KPIs, and keep records up to date in real-time with clear visibility.