When Shakespeare warned that “past is prologue,” he was pointing to the fact that we can’t understand the present or the future without understanding what came before it. This advice is important for finance professionals now that so much emphasis is placed on predictive analysis and proactive strategizing. Companies want to become more forward-looking in order to avoid obstacles and seize opportunities. However, doing so requires them to be backward-looking as well, which is a lot harder than it seems.
Getting a historical perspective requires companies to “age” their reports, meaning they look at the same metrics and variables but use data that may be several quarters or years old. Comparing the past to the present is crucial for understanding how enterprise performance management is trending, whether positively or negatively.
The problem comes from the limitations of most financial analysis software. Popular products make it easy to report on the latest data. When users dive into the historical record, however, the built-in reporting capabilities prove a lot less useful. Finance professionals have to go hunting for the information they need because, due to its age, it hasn’t been included in the present reporting system. Then they have to manually integrate this data and often manually analyze it as well. At best this process is inefficient and annoying, but at worst it makes it impossible to “age” reports accurately.
Lacking historical perspective throws the entire decision-making process into turmoil. Finance leaders don’t have the context they need to make sense of the present performance metrics. As a result, they’re too uncertain about making bold decisions, or they make those decisions oblivious to the inherent risks. Neither situation is acceptable, particularly for finance departments trying to strike a careful balance between caution and courage.
Unfortunately, this problem is widespread, and too many accountants make the best of a bad situation rather than seeking out a solution. A lot more would if they knew how easy it actually was to age your reports
As noted earlier, this problem occurs when financial analysis software doesn’t integrate enough data. Therefore, relying on software that integrates more data in one place provides an immediate solution. For example, if users could generate reports by simply entering the parameters of the data they wanted to access, aging reports becomes as easy as changing the dates. With a few clicks, users have instant access to the data they need for thoughtful decision making.
Best-in-class financial analysis software integrates historical data with all the other data decision-makers may need. That includes performance metrics updated with real-time data, as well as operational data from outside the finance department. Crucially, users have access to all this data without needing the IT department to find it for them. In that way, users can age, expand, refine, or customize their reports in whatever way supports their objectives. Information becomes an asset instead of an obstacle.
insightsoftware is innovating new forms of financial analysis software that put all your data at your fingertips. If you struggle to age your reports or to generate them in the first place, it’s time to take a different approach to data. When you’re ready to explore all that we can offer, contact us.