Are your financial reports causing you undue stress? If you’re like most leaders, you know that accounting reporting challenges can be a nightmare to deal with. Moreover, reporting takes both time and resources – things that you and your team lack. The truth is, consolidating data and information from systems and clients alike can seem like a revolving door of mistakes. Whether you’re compiling the necessary financial documents, pulling data from your general ledger or preparing a statement, accounting reporting can include some sizable challenges.
As CFO or accounting executive, these challenges hinder the business more often than not and in today’s market, that’s something you can’t afford to risk. Read on to see how your team can tackle accounting reporting challenges within the finance function.
Challenge #1: Lack of Financial Reporting
Investing in Tools That Streamline Collaboration and Ensure Consistency in Accounting Reporting
In an ideal scenario, stakeholders and chief executives would have full assurance in their company’s financial statements. They could review the numbers to make well-informed decisions and go about their day. But that is often not the case. Numbers can be misinterpreted, small errors can be overlooked and data can be tampered-with. Or worse, there could be an absence of reporting happening within your department. And it’s hard to improve on your reporting if there’s no process. There are a few ways to avoid this issue:
Move to a robust ERP system. Choosing the best software for your accounting function is something that shouldn’t be taken lightly or decided upon in the spur of a moment. Make it a point to figure out how this software fits your department’s goals before you hand over your money and data.
Allow for full visibility with collaboration software. When teams operate in silos, it’s a sure-fire way for operations and processes to be brushed aside or disrupted. Even more, your employees may find themselves repeating the same work, which can affect the accuracy of financial reports. Tools such as Trello and Slack can help get everyone on the same page.
Challenge #2: Keeping Financial Data Secure
Moving to Cloud-Based Accounting Software
Every industry has a reason to concern itself with cybersecurity, and that includes accounting. It isn’t enough to assume that since each of your computers contains anti-virus software that you’re safeguarded against potential breaches. Where’s there’s money involved, there are bad actors. Here’s how to ease your concerns and protect your financial information:
Utilize cloud-based accounting software. Run, don’t walk. Dispel the myth that the cloud is not secure. The reality is, the cloud is considerably more secure than any on-premise system – a win for companies looking to store sensitive data. Besides the security it provides, cloud-based solutions also:
Can be accessed anywhere. Working remotely? No problem. On your phone? No sweat.
Saves your company time. Worried about keeping up your finances? Working in the cloud allows you to automate tasks that slow you down.
Reduces expenses. Pay only for what you need, whether you’re adding a new team member or removing a former team member. In addition, there’s no need to store your data on outside servers.
Challenge #3: Data Overload
Choosing the Right Metrics and Reports to Analyze to Beat your Reporting Challenges
If you’ve been in the industry long, you’re probably well aware of the impact of metrics. And not just any metrics, but the right metrics. Picture this: setting up a meeting with stakeholders, clients or investors only for them to stop you short during your presentation because the data you provided is irrelevant. Not only is it embarrassing, but it gives your audience the wrong impression about your organization.
On the flip side, there is much to be said about data being the driving factor behind company growth. But what happens when you’re engulfed by a plethora of information? As Helen Lloyd, Dext Precision co-founder, once said: “Bad data is a bigger challenge than many accountants and bookkeepers initially realize.” So how can accountants choose the right benchmarks? Ask yourself:
What do I want to measure?
Do these metrics align with the company’s overall goals?
Can these metrics help make informed and strategic decisions?
For a complete list of top accounting KPIs, check out this article: How to Measure Success in the Accounting Department: What are the Top KPIs?
Challenge #4: Shortage of Qualified Talent
Outsourcing Your Accounting and Finance Functions to Overcome Challenges
Ask any accounting executive and they’ll tell you the same thing: a scarcity of talent is a growing trend. And we can’t put the whole blame on the pandemic when this problem began well before the onset of COVID. We conducted a survey that found 81 percent of financial leaders polled pointed to difficulties in finding qualified low-and high-level accounting talent.
Just like any department, throughout every industry, accounting needs the right people in the right positions for everything to run efficiently. Imagine having a dedicated team at your disposal without the hassles of recruiting. Finding and hiring the right talent can drain your resources – the endless sourcing and screening, interviewing and training can take as much time as the reporting itself. The talent shortage combined with the growing trend of remote work means that outsourcing is even more attainable (and needed) than ever before.
If you’re wasting more time than you’d like to admit on monthly reporting and still not getting the results you’d expect, partnering with a virtual accounting provider may be the next step. Find out more about how to overcome accounting reporting challenges by getting in touch with our experts.
Enjoy this article? Then you’ll appreciate our latest infographic on accounting trends and what to keep on your radar this year: The Future of Finance: Forward-Looking Accounting in 2023. View now.