Four tips for a future proof management reporting!
Entrepreneurs expect more and more input from the finance department in their company. The modern CFO is a partner of the business, feeding the management with the insights they need to steer their business. New technologies that increase the efficiency of the finance department are mushrooming. Just think of the many Fintech start-ups that automate a part of the administrative and accounting processes each time. This digital transformation creates an exciting challenge in finance. The time-consuming input work is increasingly falling away and more attention is being paid to the processing and analysis of financial and operational data. As a result, entrepreneurs will be able to steer the company in the right direction in a much more focused way in the future.
In this article we give a few tips to transform the finance department into a high-performance business partner and automation of internal reporting and provision of management information.
Tip 1: Combine financial and operational data in management reporting.
In the past, finance departments often focused on compliance and the production of reliable financial figures. The end product is the annual accounts, which provide insight into how the company has performed over the past year. To the outside world, this statutory information is therefore very important, but for the manager/manager it is insufficient as a working tool to for decision making.
Functional management reporting combines operational and financial data, is future-oriented and helps the entrepreneur to make the right decisions. By monitoring the financial impact of operational decisions, you learn a lot about the efficiency of the company. Measuring and benchmarking the turnaround time of a product line, for example, provides a clear picture of where possible efficiency gains lie and where savings can be made as an entrepreneur.
Tip 2: Translate the business strategy into the right KPIs and objectives
Starting from the strategy you can define the key success factors that need to be met in order to realise the strategy. By defining the right KPI's (Key Performance Indicators) you can then monitor how well your company succeeds in achieving the set objectives. These KPIs are preferably followed up in a clear dashboard, which allows you to draw the right conclusions at a glance.
Tip 3: Enrich the financial figures
In order to really understand how and why your company spends and receives money, analytical accounting is indispensable. For example, analytical accounting allows you to monitor the costs incurred to achieve a certain turnover per product segment.
Tip 4: Automate your reporting process
All too often, reports are built up in Excel. However, reporting in Excel is a very labour-intensive and error-prone exercise, in which one wrong formula quickly leads to unreliable figures.
As a result, cloud-based reporting tools (such as PowerBI) are rapidly gaining in popularity. These tools synchronise the data from your accounting package, ERP, CRM... almost in real time and visualise the figures very clearly in reports or dashboards. By consolidating the financial figures of a group of companies, you, as an entrepreneur, also have a continuous insight into the performance of the entire group. These tools thus automate the data input and free up more time for analysis.
Would you like to know more about setting up automated real-time management reporting? Contact our consultants.
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