Reporting still plays an integral role in the finance department. CFOs focus their attention on managing and analyzing the financial activities of the business – a crucial part for any contemporary business and an excellent way to understand the overall performance of the business better.
Regardless if CFOs have compiled these statements by themselves or have appointed others to create the statements on their behalf, their duties don’t stop after issuing the numbers. CFOs are also responsible for making reports that are useful to key stakeholders and leadership. They understand the targets, indicators, and performance metrics that the organization needs to hit for it to move forward.
Ordinarily, CFOs had a look at their rearview mirror since they had to review balance sheets and financial reports that will be used to indicate the business’ financial state at the end of a fiscal year.
Well, the world has evolved. Financial reporting is still very integral, but accessibility to data and technology has made it simple for organizations to get real-time data regarding the performance of the company and even show its would-be performance in the future. There is a limitless pool of untapped potential and power in this digital revolution in what is a legal prerequisite in many countries.
Due to this, the functions of a CFO have altered. Rather than just being a financial leader, they are now required to drive progressive change in business finance. They currently have various tools that are focused on intelligence and predictive analytics, with artificial intelligence and machine learning that could potentially change the game for the long haul.
The impact of automation on financial reporting
Reporting financial status is integral for any business as well as its performance. It is required for areas like investor relations and regulatory compliance. Consequently, there are certain pressures which CFOs and their subsequent departments could feel from the organization, when it comes retrieving better financial information like:
- A corporate authority for improving the quality of accounting and financial data
- A management focus that improves the financial/accounting staff productivity
- Stakeholders demanding for financial information access, and the necessity for regular disclosure (monthly rather than it being quarterly or annually for example)
- Need for augmenting financial reporting with non-financial performance information
Business establishments should view automation as a dependable way for improving the quality of financial information and increasing the overall productivity of accounting/financial staff.
Instead of getting preoccupied with acquiring data and time-consuming transactional tasks, automation provides a viable solution. 2017 PWC’s Finance Effectiveness Benchmark Report suggests that automation can reduce up to 46% of the total cost and time required for essential processes like management reporting, accounting and budgeting, and billing.
Automation will allow businesses to:
Reduce the manual intervention required in accounting and financial related tasks, like reconciliations and ledger entries
Eliminate the potentiality for human error
Enhance the use of staff time efficiently through cutting down on manual processes
Raise and expedite business turn-around
Through the use of business integrated systems and automation that function as an auditable system of recording, CFOs and their corresponding departments can make usage of technical capabilities that make them of use to the business and are generally more effective.
Narrative analysis is included in automated financial reporting. Financial information with a clear story and context can prove to be very useful.
Financial metrics real-time updates. With real-time metrics, the efficiency of prepared reports and quality of related data is improved. Real-time uploading avoids gaps in financial data and reduces the turn-around time for reporting.
Multi-dimensional reporting. It enables multiple codes to be utilized to generate charts and models from sets of compounded data. Analytics and data from different transactions can be aggregated.