Welcome to The Ledger where we sum up the latest finance and accounting news and trends for you. On this week’s entry, we’re diving into the topic of accounting reporting and how to successfully utilize it to increase your company’s bottom line. Read on to explore why accurate accounting reporting is at risk during the Great Resignation, how to ensure error-free and timely reports, why you should stop creating financial reports manually and what reporting issues CFOs are facing.
Rethink Your Financial Reporting: Why Your Internal Controls May Be at Risk
Accounting professionals are leaving their jobs in droves thanks to the Great Resignation. Workers are demanding more from their employers – higher salary, flexible work arrangements, etc. And with a shortage of staff on hand, many managers are scrambling to fill the gaps and deliver accurate financial statements to their clients. Paul Knopp, CEO of KPMG LLP addressed this issue: “We are not immune from what many people are calling the ‘great resignation’” Unfortunately, small to mid-sized companies are now at a disadvantage compared to larger firms as employee turnover hits new record highs. And according to Daniel Taylor, Associate Accounting Professor at the University of Pennsylvnia, “The fear is that an internal control weakness leads to a material misstatement or that is leads to a possibility of something greater, like fraud.”
To learn more about how firms and companies alike are facing this busy season shorthanded and how that affects financial reporting, read the full article on News.BloombergTax.com.
How to Ensure Error-Free, Accurate, and Timely Accounting Reporting
Accurate reporting is key to a successful business. However, making sure that they are updated or delivered at the right time is just as important to stakeholders. Take note of the following tips (that even the busiest leaders can appreciate):
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Identify critical information. Figure out what documents you need to make data-driven decisions.
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Utilize digital tools that foster collaboration. Automating your low-impact tasks can ease the stress that comes along with running a company.
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Set up a calendar of events. The easiest way to stay on track is by creating a simple schedule.
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Tailor your reports to your company and industry. Your reports should provide benchmarks and KPIs.
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Reconcile transactions periodically. Don’t wait until the last minute to settle your books.
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Implement a delivery schedule. Develop a detailed close schedule so that each member of your team knows what needs to get done.
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Pull data in real time. If you want to remain relevant in this volatile economy, you need to leverage this type of technology.
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Optimize workflows for flexibility. Do your workflows and processes allow for flexibility? If not, you need to rethink your tech stack.
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Set up automated financial reports. Manual reporting is a thing of the past. Let your software do the grunt work.
To explore more about the best practices in financial reporting and how to ensure leaders have the information they need to make educated decisions, head over to Forbes.com to read the full article.
Stop Creating Financial Reports Manually (to Achieve Accurate Accounting Reporting)
Seriously… just stop. In a world dominated by technology, there’s no reason to leave your finances to chance. Still, many companies continue to build their reports manually and while Google Sheets and Excel are sufficient, you could be doing better. Here are a few manual financial reporting challenges that businesses are facing:
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Your reports contain issues – transposition errors and faulty formulas.
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You’re spending much of your time reviewing information rather than analyzing information.
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You’re wasting valuable time and resources.
And here’s why automation is the solution to the above problems:
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You can quickly produce reports on any schedule you set forth – weekly, monthly or even quarterly.
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Non-finance departments can get information without having to rely on members of the accounting team.
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Makes forecasting easier and more accurate for leaders to make better business decisions.
To learn why technology is the key to managing your financial reporting better, check out the full article on Entrepreneur.com.
Financial Reporting Issues That CFOs are Facing (& How to Overcome Them)
As head of all things accounting, you probably know what it takes to keep your organization running smoothly. But what happens when you’re faced with new hurdles that impact your business’s bottom line? Here are a few financial reporting obstacles that CFOs will inevitably come across during their careers:
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Data overload. A Workday global survey showed that 32 percent of CFO respondents cited data gathering as the greatest challenge they faced for reporting. The solution? Utilize software that automatically collects information into a single report.
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Keeping up with regulatory changes. Accounting leaders have to be aware of regulatory standards such as U.S. GAAP and International Financial Reporting Standards. The solution? Be proactive by prepping your company with the right tech tools and embracing AI and analytics.
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Taking action. Your financial data should provide insight into the health of your company. Moreover, your financial data should tell a story – one that drives decisions. The solution? Present financial data in a clear and actionable manner, such as visual dashboards.
To understand how CFOs can optimize their financial reporting process, take a look at the full article on InnoTechToday.com.
