How to improve financial clarity through reporting

25th Oct 2021
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Financial reporting, whether for internal or external consumption, has long been one of the most challenging and costly processes for finance teams. It’s also the most important.

It has become increasingly important for finance teams to ensure they are at the forefront of financial reporting, strategic planning and business decisions. To emphasise the value of financial data, CFOs and Finance Directors need to be able to predict and forecast financial health over time to help guide how the organisation moves forward.

Finance teams continue to face competing challenges while trying to maintain workplace productivity when delivering accurate management information across an entire business in real-time.

It embraces many interwoven and complex details which hold the capacity to disturb the smooth sailing of information presented. When done right, your numbers will tell the story of your past, present, and strong future determined by agile and strategic decision-making. However, failure to mind the details of your financial reports can impact business strategy and hold lasting consequences such as business closure should money run out.

CFOs and Finance Directors reading this guide will already know the bread and butter of financial reporting tools. However, utilising the strengths of these tools to aid business strategy are still areas from which can be learnt from.

This is why we have devised a practical and comprehensive guide on financial reporting and clarity to steer you in the right direction for getting reports right first time, every time.

What is clarity in finance reporting?

The Oxford Dictionary defines clarity as “the state or quality of being clear or transparent to the eye.” For finance teams, the accuracy of reporting the right figures and numbers is paramount.

The finance function of any organisation is always at the centre of every strategic move. This is why there can be no room for error in financial reporting as the figures paint the bigger picture of your organisation’s financial results and trends. It delivers insights and informs the decisions made.

The CEO, executives, board members and department-level staff all rely on the numbers revealed within your financial reporting.

Contrary to a straightforward solution to a math equation, determining the answers within financial reporting depends on many factors. Will HR be able to hire? Will sales be able to buy equipment?  Will the CEO be able to open a new office? The metrics you choose to report on will determine the answers.

Metrics to measure for clarity in financial reporting

Finance reporting provides a comprehensive picture of your business’s financial results and everything around it. This is why clarity in your reporting process is crucial.

Financial reports are built around three initial statements:

  • Income statement
  • Balance sheet
  • Cash flow statement

These three statements inform your tax filings, creditor reports, regulatory reporting, internal reporting and business strategy and continuity decisions.

Keeping up with the demand for financial reporting and balancing this with your operational and managerial reporting needs can come with its challenges.

In the past, traditional accounting software made financial reporting a manual, mundane and time-consuming process with the potential for human error and inaccuracies, which could sometimes be incompatible with deeper analysis. 

Upgrading your system to a Cloud accounting software solution can create a more efficient and accurate reporting process. Dashboards, set up with the right set of metrics, can help you better understand and communicate your business performance to key stakeholders.

It also allows you to track the ongoing health of your organisation in real-time to understand how well you’re keeping up with your business strategies and values. Automation, on the other hand, can also help streamline your financial reporting process.

Overall, achieving financial clarity is essential if you want your business to beat the increasing UK business failure rate. Regardless of the size of your business, having the right finance reporting tools plays a crucial role when focusing on understanding your numbers in real-time to actively support your organisations’ growth vision.

How to meet finance reporting standards

To meet finance reporting standards, it’s essential that you understand what the numbers actually mean for full financial clarity. It’s not enough to just simply look at your numbers; you should adjust your business strategy and decisions accordingly where required.

To run a successful and productive finance team, you need to be able to communicate across departments, translating complex financial data into consumable information to help the business navigate rapidly changing economies and markets, providing foresight to minimise risk.

Unlike traditional accounting software, Cloud technology goes a step further with financial reporting via real-time access to data which can be automated and presented in customisable reports at the click of a button.

Real-time access to your data doesn’t mean obsessing over cash flow, processing receipts or tracking expenses. Simply put, it gives you the ability to monitor your business performance live online with information accessible at your fingertips.

These powerful Cloud accounting software tools eliminate human error in reporting and simplify invoice and receipt processing, expense tracking facilities to spot any unnecessary subscriptions and reliable business forecasts to help obtain cash for development. These benefits allow for accurate decision-making and ultimately provide you more time to focus on high-value tasks.

What are finance reporting tools?

Since the start of the pandemic back in March 2020, the role of the CFO has evolved overnight. Digital transformation accelerated from a 3-year plan to a 2-month implementation to keep up with business demand for real-time reporting and agile decision-making.

Your numbers tell the story of your organisation’s past, present and future. Powerful Cloud accounting software presents you with this information in real-time. However, for CFOs and Finance Directors hesitant to embrace the shift to Cloud technology will face having their processes become outdated and unable to meet business demand in the near future.

Investing in Cloud accounting software and tools will give you and your finance team accurate, real-time information of your finances so you can make strategic decisions. If you’re unable to see your numbers live, you can’t identify issues that may significantly affect your future business success.

Using Cloud accounting software reporting across your entire business allows you to:

  • Track performance against key KPIs real time
  • Cash flow forecasts for best and worst-case scenarios so you can plan accordingly
  • View robust, versatile, customisable dashboards and reports
  • Have access to relevant information needed to make timely management decisions
  • Use configurable reports that can be emailed with automation options

What are the benefits of automated financial reporting?

It may seem risky to switch over to a Cloud accounting software solution after years of using locally installed traditional accounting software. However, there are many benefits of making such a switch. All of which can help you up your financial reporting by getting to the truth behind the numbers faster and more effectively.

The right tools can help your team streamline your financial reporting as well as your managerial and operational reporting—and bring everything together through effective and meaningful dashboards.

Automating repetitive manual tasks also allow you to get more done in less time and provides key focus on analysing the numbers, uncovering new information and shaping the strategic direction of your business through forecasting.

Don’t just take our word for it, here are some of the benefits:

The bigger picture

Gain a comprehensive overview of your business’s financial results and everything around it thanks to accessible dashboards available all in one place.

Data integrity and improved accuracy

Ensure your data is sourced accurately, so nothing gets lost in translation or missed due to human error.

Make agile decisions faster

Transform your data and numbers into insights to make the right decisions for business strategy and continuity.

Instantly meet stakeholder requests

 Automation will allow you to deliver more accurate data and powerful insights to your stakeholders in a more timely manner.

Build a better audit trail through automation

Access a seamless log of your data, workflows and processes, which help identify any potential errors to be resolved in good time.

Spend less time on manual tasks

By automating the repeatable tasks, you’ll be able to spend more time developing actionable insights for your business based on agile decision-making.

Choosing your finance reporting tools

At Advanced, we understand that finance teams need to translate complex financial data into consumable information to help navigate changing economies and markets and minimise risk. Our cloud-based business management solution provides finance leaders with one accessible view of their business performance, anywhere, anytime, on one piece of software.

Powerful financial reporting meets clarity in numbers thanks to sophisticated functionality that is built for the future. It enables organisations to manage their multiple business units and view data from across the company, with legislative compliance built-in

Take the next steps…

Businesses today are most likely to succeed if they can make faster and more informed decisions. For this, you need quick, easy and accurate insights from your financial data.

We are here to help CFOs and Finance Directors understand, predict and weather the storms ahead through clarity in financial reporting. So, be sure to read more about Business Cloud Essentials. The system is particularly suited for small-medium sized manufacturers, that are looking to grow and integrate all the functions of their company.