You just got a call from a C-suite executive asking for up-to-the-minute information on cash flow. This time there is a twist, though: You need to produce a worst-case projection based on some new assumptions, including a 20 percent drop in revenue and a 15-day slowdown in collections. Although you have produced cash flow reports hundreds of times before, you have never been asked for this exact version until now. It requires some additional information, including some sales pipeline analysis and some adjustments to the aging report. It’s Thursday afternoon, and the IT specialist who works on report formats is out sick. The boss wants that information by tomorrow morning. What can you do?
Virtually everyone who has ever worked in finance and accounting has experienced this kind of scenario at one time or another. For many, it may have happened quite recently. In March 2020, as the gravity of the coronavirus crisis was first becoming clear, C-level executives around the world were asking precisely these kinds of questions. As business leaders struggled to assess the situation and respond quickly, they simply could not afford to have bottlenecks slowing down their access to information.
Eliminate the Chokepoints
Historically, the finance and accounting department has relied on IT specialists or expensive outside consultants to create or modify system reports. The report design tools that come with most accounting and ERP systems are often inflexible, and they require a steep learning curve. This represents multiple challenges.
First, it creates a dependency on an external department. Cross-team dependencies are typical in most organizations, but when one department has different priorities from others, it creates friction or chokepoints that prevent things from getting done quickly and efficiently.
Problems can also arise when a single department is overwhelmed with competing priorities. As the coronavirus crisis began to unfold, for example, many IT departments were consumed with tasks related to the enablement of remote workers. This happened at precisely the same time that C-level executives most needed quick access to financial information and analysis.
As a long-term strategy, companies should strive to eliminate these kinds of dependencies wherever possible so that cross-functional collaboration efforts can focus on areas where teamwork and multiple perspectives add real value.
The second problem with traditional reporting tools is that they usually lack the flexibility that users in the finance and accounting department truly need. Most F&A users prefer to work in Excel because of its tremendous power and flexibility. Excel provides a robust platform for manipulating, analyzing, and visualizing information. Virtually every finance professional knows how to use it effectively.
By making it possible to access real-time data from multiple software systems directly within Excel, the finance and accounting department can kill two birds with one stone. First, they can eliminate the dependency on IT. Second, they can empower F&A professionals to design reports and perform analysis within one single, powerful, and familiar tool.
Many organizations have also seen value in deploying web-based dashboards so that leaders across the organization can have up-to-the-minute visibility to a common set of business metrics. Some of these web-based dashboard tools, as well, operate around a similar philosophy of user-empowerment, enabling the finance department to set the agenda and execute a plan for rolling out corporate dashboards without creating a long-term dependency on the IT department.
When finance takes ownership of the reporting function, it can potentially solve another problem that is very familiar to most F&A teams. Historically, reporting and analysis has often required a manual copy/paste process to move information extracted from ERP, CRM, or other internal systems into Excel.
This is a very tedious process; it is also highly likely to introduce errors into the reporting process. If source data formats change at all (for example, if a new row is added to a General Ledger report), it can result in data being pasted incorrectly into a pre-defined Excel template. Skilled spreadsheet users will often add error checking formulas or workarounds to prevent this kind of problem from producing erroneous results, but such strategies are certainly not foolproof.
The copy/paste method has another significant drawback. It produces reports that are based on outdated information. As soon as data is extracted from the source system such as ERP, it no longer represents an accurate, up-to-the-minute view of what is happening in the business. To update reports, data must be refreshed, and the copy/paste process must be repeated. A better alternative is to build a reporting strategy based on real-time access to data.
There Is a Better Way
Consider this alternative approach, in which data is immediately made available, in real time, by linking to the various source systems across the entire organization. When the finance department can build reports directly in a familiar tool such as Excel without the need to copy and paste data extracted from other systems, it can focus on what it does best: assembling and analyzing information to support better business decisions.
Because this approach allows for real-time access to information, there is no need to refresh content periodically. Data can be automatically refreshed through direct links to the source systems such as ERP or CRM (or both). Everyone gets a real-time view of what’s happening in the business, with less work, fewer cross-team dependencies, and a far lower likelihood of errors.
With powerful reporting tools from insightsoftware, all of these benefits are available to organizations running a wide range of off-the-shelf ERP, CRM, and other software systems. Reports can be designed, modified, and securely distributed across the organization. Built-in data security ensures that users only have access to information that they are authorized to see.
2020 has brought a new focus on software automation tools. As organizations are looking to do more with less, and as remote workers strive to collaborate effectively and efficiently with other team members, automation of reporting and related tasks is a natural first step for companies aiming to improve efficiencies.
Read our case studies to learn more about how insightsoftware’s tools help finance and accounting teams access real-time reporting features that lead to actionable business insights.