Traditionally in financial accounting, reporting was a quarterly or annual affair. These days companies are expected to have a real-time pulse on their financial reports.
Automated financial reporting allows startups to keep pace with the rapidly changing data and work across multiple platforms in real time.
With the right automated solutions, these teams can rely on an automated reporting system to support repetitive work elements while they shift their focus to strategizing on more urgent and complex needs.
Here's what to know about automated financial reporting and how to implement it in your financial team.
What Is Automated Financial Reporting?
Automated financial reporting uses software to generate reports. Previously, finance teams or accountants would have to reconcile books or manually transfer data from records to spreadsheets.
Automated reporting gathers and organizes data for financial statements, management reports, balance sheets, and cash flow statements. They can also generate presentation reports, leaving finance teams with more time to understand the reports.
The top 25th percentile of organizations can put together monthly financial reports in just four days. The lowest 25th percentile can take up to ten days.
A six-day lead with investors and market changes can give businesses a serious competitive edge.
Features Of Automated Financial Reporting
There are many reasons automated financial reporting is attractive to businesses. The most attractive include smart forecasting and a single finance dashboard.
Automated financial reporting makes it possible to engage in smart forecasting. When automating financial data collection and presentation, you can rely on forecasting tools to extrapolate from it.
This smart forecasting saves time and allows financial teams to focus on what financial forecasts say rather than putting them together.
Automated financial reporting usually sits within a dashboard. This unified platform enables businesses to view all facets of their financial profile in a single program, including:
- Burn rate
- Cash zero date
- Accounts payable
- Outstanding invoices
Likewise, a finance dashboard allows team members to collaborate and access data in real time. This can help speed up interactions and leave more time for discussing what data means for business plans rather than how to collect and document it.
Benefits Of Implementing Financial Reporting Automation
CFOs, financial teams, and accountants benefit from implementing financial reporting automation in several ways. These include real-time insights, fast budget and planning tools, a reduction of errors, and time to focus on strategy.
One of the most significant benefits of implementing financial reporting automation is gaining real-time insights. By having up-to-the-minute documentation of each financial transaction your team has the best data to make decisions.
With manual processes, it may take too long to calculate some data. This may lead to overspending or underestimating things like a cash zero date. But when automation collects, assesses, and assembles the data, you always know your key financial numbers.
Some of the most essential real-time insights to automate reporting include burn rate, operating expenses, and revenue.
Automated cash burn rate reporting helps assess how quickly you are spending your available funds. Knowing this rate prevents you from running out of money. This helps with spending plans and projections.
With automated burn rate reporting, you are better prepared to track your spending, assess your budget, and forecast your upcoming financial needs.
Tracking operating expenses is vital for balancing your costs and sticking to a business budget plan. When automated, it lets you know how much you are spending without manually documenting each purchase.
In programs that track expenses, you can designate your main operating expenses. Automation tools will recognize these categories when organizing future expense reports, automatically assembling a report of what you spent on operations. Comparing these reports to revenue reports can help you assess profit.
Revenue reports contain the most important numbers a financial team can gather: how much money the company is making. Using automated balance sheet software to get final numbers eliminates a wide range of manual accounting tasks that assessing revenue may usually take.
Revenue reports impact many facets of the business and decisions. Having automated reports ready for meetings with investors or internal forecasting meetings is a big help. Automation can help produce these reports quickly and more accurately, meaning you can impress investors with high-quality reports and quickly serve up the information they need to make decisions.
Budget And Plan In Minutes
In the past, finance teams needed to pull data and write financial reports from scratch. Now with automated reporting, teams can pull a complete report directly from their financial platform.
This means that budget work and planning happen in minutes. Teams increase their efficiency by putting the bulk of report creation onto an automated system.
Since automated reporting works with real-time financial data compiled in a unified financial platform, there is less need for human interventions and less risk of human error.
Artificial intelligence tools won't accidentally transpose numbers while moving from spreadsheet to word processing document. They also won't miscalculate entries.
Fewer errors mean less time spent on correcting mistakes. It also means more trustworthy information to make decisions.
More Time To Focus On Strategy
Automated financial reporting claws back time that may have previously gone towards creating the report. This means that CFOs and their teams get to focus on strategy instead of reports.
When you have more time to focus on strategy, you have time for innovation. Efficiency means you invest more in your employees' forward-looking, revenue-generating actions and less in busy work.
How To Implement Automated Financial Reporting Software
When it's time to implement automated financial reporting software, prepare your team for a transition period.
You may wish to run side-by-side reports to compare your automated report to old manual ones until everyone feels confident using new software.
Working with a provider can help clarify your needs and offer guidance where needed.
Clarify Your Needs And Technical Considerations
Before buying into new automated financial reporting software, pinpoint your team's needs and specify any technical considerations.
Your team may want software that they can use remotely. They may also want a cloud-based program that can let them collaborate on reports in real time.
The need for automated reports may stem from a thinly-spread finance team looking to augment their computing power. Perhaps they are finding the time they have to spend on developing financial strategy hobbled by the time-intensive practices of manual reporting.
Discuss what kinds of goals you'd like to achieve with the software and what kind of technical options you have.
Test Before Committing
Automation solutions help many companies improve their efficiency and accuracy. But testing before you commit can make the transition easier.
When you work with an experienced financial platform provider, they can assist you with testing and training your team on using new financial reporting software.
Find a provider with technical experts ready to run demos and training meetings so that your full launch into the automated financial reporting process gives you the time-saving, error-reducing effect you were looking for.
Get Started With Automated Financial Reporting
Transitioning to an automated financial reporting software is a no-brainer for cutting-edge startups looking to modernize their business operations.
The benefits of real-time insights, fast planning, reduced errors, and more bandwidth to dedicate to strategy can help a startup reach a new level of financial health.
What was once assembled over a series of tedious, manual tasks now automatically populate in software made to serve finance teams on the go.
Get started with automated financial reporting by contacting a provider. Request a demo to see how your team can benefit from utilizing these financial reporting solutions.
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