Benefits of Standardized Financial Reporting

Time to Read: 2 ½ Minutes. As a finance professional reporting is one of the most important aspects of your job. It is the endpoint of the finance process; when all the hard work collating, synthesizing, and analyzing data is put in front of the C-Suite, shareholders, or other interested parties. Reports form the basis of strategic decision- making and leading an organization with either faulty or non-existent reporting is like sailing into a storm without a map.  

The pandemic and other business disruptions have combined to make commerce more unpredictable than ever. The department of finance is navigating through tough water, so reporting needs to be as accurate as possible to maintain cross-departmental trust. If someone reports figures or findings inaccurately, you could risk reputation, losses, or worse. Reporting processes need to be standardized to ensure accuracy and resiliency to disruptions in business. Through standardization, the benefits of data-backed decision-making can be distributed fully across the entire organization.  

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Organizations can start to standardize their reporting process by first switching to an ERP system and then using a Cloud-based FP&A system for reporting. Cloud FP&A software, like Limelight, produces reports of superior quality that can immediately generate value for your organization.  

Accuracy   

Because Cloud FP&A integrates directly with your ERP, the finance team can work with data that is accurate and current from across the organization. Using static spreadsheets for reporting can produce errors that create potentially catastrophic cascading effects throughout the spreadsheet and workbook. This can impact your business, without alerting departments, causing cross-departmental issues such as collaboration and data silos. Financial reporting needs to be as accurate as possible to connect strategy with reality and static spreadsheets cannot provide this level of accuracy. Accuracy in data ensures that your decisions are based on correct and current information and will have a more immediate positive impact on your organization. 

Standardization can also help elevate the finance office. If the finance office no longer needs to spend all its time correcting errors, the finance team can devote more resources to analysis and be elevated from data stewards to financial decision-makers and other influential positions. 

Transparency 

A major issue that organizations encounter regarding data and reporting is transparency, meaning the accessibility of data between departments. Well-functioning organizations need to be informed of how each department is performing and if key information is hidden in disparate silos, it makes having a holistic view of the organization next to impossible. Data silos are one of the key drawbacks of static spreadsheets, by switching to Cloud-based FP&A software this issue can be easily fixed. Cloud-based FP&A programs integrate directly with an organization’s ERP and provide a central workplace for data where everything is accessible. However, not everyone in the organization needs to have access to all information, solutions like Limelight have built-in security to provide users with the intended access. Giving departments key information for use in their planning and decision-making creates avenues for holistic planning and gives every department the ability to know how the organization is functioning. Fully transparent organizations increase trust and confidence in leadership from employees, customers, and shareholders.  

Legibility and Analysis 

Standardization also lends itself to another important attribute of reporting, legibility. Reports must be easy to read and understood for them to produce analytical value and actionable insights. Like any form of communication, reporting is only as valuable as its ability to convey the information that it contains in a way that is easily understood by all interested parties. Cloud FP&A platforms like Limelight are devoted to the principle of legibility and present financial data in a way that is understandable and actionable for all team members. 

Having accurate and current information that is legible and transparent makes decision-making easier. It gives the C-Suite confidence and assurance that their decisions are backed by accurate and current data that is accessible and easy to understand by their respective departments.  

Conclusion 

 One of the most important roles of the finance office is to furnish stakeholders with accurate reporting about the financial health and performance of the organization. This task is aided by the standardization of the reporting process provided by Cloud-based FP&A software like Limelight. 

To learn more about how Limelight can improve your reporting process, book a demo with us today.  

 

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