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How to Control the Real Cost of Financial Reporting

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insightsoftware is a global provider of reporting, analytics, and performance management solutions, empowering organizations to unlock business data and transform the way finance and data teams operate.

Pen on a document.

Companies implementing a new ERP system may spend as much as 25 percent of their total budget developing reports. Unfortunately, most ERP software publishers don’t provide user-friendly tools for reporting. That means bringing in high-cost consultants to make modifications and build custom reports or training internal IT staff and allocating a large chunk of their valuable time to the task.

To make matters worse, the job of customizing and fine-tuning reports never seems to end. As the business changes, as the software evolves, and as new information requirements emerge, many organizations find themselves playing a constant game of catch-up.

It’s an expensive process. For many finance teams, it feels a bit like owning a classic British sports car; life is great when it’s running well, but it seems to be in the shop half of the time. Expert mechanics are hard to find, and the parts are unreasonably expensive. Using the wrong reporting tools can be much the same.

There are, however, alternative approaches to reporting that can save substantial amounts of money while providing for much faster delivery of information to those who need it. That means greater business agility, which is a necessity in the age of COVID-19.

Problem 1: The Business Changes

Has your business changed substantially in the past year? If your organization is like most others, recent events have led to an increased focus on cash flow, aggressive inventory optimization, reallocation of staff, and diversification of revenue streams.

Pointing to charts and graphs.

What happens if cash flow is suddenly in the spotlight? When the CFO wants to see a rolling 90-day cash flow broken down by week, instead of by month as the current report shows it, someone needs to build a new version of that report. That usually takes time, and it always takes resources.

For companies that have their own in-house IT experts, requests like that usually go into a queue. If there’s a backlog, it could mean waiting days or weeks to get that new report. Many companies end up outsourcing the job to external consultants, which is expensive, and it might not be any faster.

In the era of COVID-19, business leaders don’t have the luxury of waiting. In the US, when the first round of Paycheck Protection Program (PPP) funds were released, for example, proactive businesses were quick to apply, and they received funds. Those who hesitated, even briefly, were left to wait for round two. When the wheels of business turn slowly, the actual negative implications are real and immediate.

Project managers are keen to point out that there are three constraints to every project: time, resources, and scope. If you need something done fast, you can either expend more resources on it or narrow the scope. Because the latter is usually not an option, most companies end up spending far more than they should for accurate and timely information.

Of course when there’s a way to work smarter instead of harder, the equation changes. That’s where better, more efficient reporting tools come into play.

Problem 2: The Software Changes

The second problem is related to changes to the software. This can take on many different forms, the most common of which is a version upgrade to the ERP system.

ERP upgrades can be a painful process. At the very least, changes to the data model necessitate changes to many of the reports that come out of the ERP system. If you have developed multiple variants of the same report (for example, the two versions of the rolling 90-day cash flow report mentioned above), someone will need to modify both reports. Multiply that effort by every report in your system, and it adds up to a massive project.

Are you running third-party add-ons alongside your ERP software? If so, add another variable to the mix. Even if your core ERP software has not changed, updates to third-party products could trigger additional reporting changes.

Open book.

If your ERP vendor changes its reporting toolset, things can get even more complicated. Reports will likely need to be rebuilt from scratch. Microsoft’s transition to Power BI as the reporting tool of choice for its various ERP offerings has profound implications for the company’s customers. At the same time, with its latest cloud ERP offerings, Microsoft is shutting off direct access to the underlying databases, rendering the process of extracting data and building reports more difficult now and potentially resulting in additional challenges when it’s time to upgrade.

Then there is the challenge of reporting against multiple software systems. In some cases, an organization might have subsidiaries or business units running different software. Another scenario might involve multiple systems such as ERP, CRM, and other enterprise software such as a specialized billing system, for example. The built-in reporting capabilities for most ERP systems are not designed to access multiple systems out of the box. Using built-in reporting tools for that kind of reporting usually requires a great deal more sophistication if it can be done at all.

Sometimes software changes are prompted by mergers and acquisitions, which require organizations to harmonize and integrate information from two or more IT systems. That usually entails a data migration of some sort and a decision about what to do with the large volume of historical data from systems that are being retired. Managers want access to that history, but using the built-in tools that come with your ERP system, it’s virtually impossible to include that historical data alongside current information. There are ways of doing it, but not with your standard ERP reporting tools.

Problem 3: Information Requirements Change

Very often, reporting needs are simply driven by a demand for new information or to access existing information in a new format.

US businesses that recently applied for PPP loan forgiveness were required to provide information on rent, mortgage, and utilities expenses, as well as a detailed analysis of full-time equivalent employees both before and after the onset of the COVID crisis. That’s a report that virtually no one had needed to produce before, and it doesn’t necessarily lend itself easily to standard reporting tools.

Then there are cases in which executives simply want new information. When the CEO asks for a change to the weekly sales report, how likely is it that he or she might follow-up with a request for “just one more thing”?

Information requirements are always evolving. Unfortunately, most companies are using reporting tools that require continuous investment to address those evolving requirements.

The Solution: Information at the Speed of Business

To solve the problems of new business processes, changes to the software, and evolving information requirements, companies need to free themselves from the built-in reporting tools that come with most ERP systems. Because those tools are “free,” they end up being the go-to choice for most customers.

Unfortunately, free can be extraordinarily expensive. When reporting becomes a money pit, it’s time to look for a new solution. Here’s what the right reporting tool can do.

The right reporting tool empowers end-users. With insightsoftware’s reporting tools, anyone who knows Excel and has a basic understanding of the ERP system can create a report, without any outside help from the IT department. In most organizations, financial analysts prefer to work in Excel because of its flexibility and ease of use.

Unfortunately, typical ERP reporting tools stand in the way of using Excel. Users end up copying and pasting exported data from system reports into spreadsheets. This not only introduces the possibility of errors, but it results in a static report that cannot easily be updated with fresh ERP data.

Most importantly, with the right reporting tool, all of this can be accomplished without IT experts. There is no backlog, no delay, and no expensive consulting fees.

The right reporting tool provides access to multiple systems. insightsoftware’s Excel-based tools enable authorized users to link directly to live ERP data. By combining this with links to data contained in other business systems throughout the organization, you can create reports that provide a holistic view of information. That’s simply not possible with out-of-the-box ERP reporting tools.

Globe surrounded by a circle of laptops.

The right reporting tool works in real time. Live links to multiple systems mean that reports can provide up-to-the-minute information. Instead of making management decisions based on outdated information, business leaders can have the insights they need based on what is happening now.

The right reporting tool immunizes you against underlying changes to the software. Because insightsoftware handles data access automatically, you don’t need to be concerned about underlying changes to the data model. With standard ERP reporting tools, a software version upgrade often requires reports to be rewritten. With insightsoftware reporting tools, we accommodate those changes behind the scenes. The information end-users see is the same, regardless of how complex data access might be.

With powerful and flexible reporting tools from insightsoftware, all of these benefits are available to organizations running a wide range of ERP, CRM, and other business software systems. Reports can be designed, modified, and securely distributed throughout the organization. To learn more about how insightsoftware can help you lower your costs and increase agility, contact us for a free demo.

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