Some of the most significant decisions companies face across the organization are centered around finances. Finances form the backbone of organizational health, and it’s increasingly important that every company has the ability to access timely and accurate financial reports through financial reporting automation.
Why has automated reporting become a must-have to operate today? Because the competitive business landscape is moving too fast for manual tracking and reporting. While finance departments have historically been able to get by with slow, time-consuming processes (and even slower decision-making), it’s no longer enough.
In fact, a study from the World Economic Forum shows that 50% of businesses are accelerating the automation of key tasks, including financial and payroll-related tasks.
Financial reporting automation solutions are designed to integrate with existing systems to seamlessly access data relating to accounts payable, invoicing and receivables, journal entries, payroll, and tax filings. But that’s just what these solutions are capable of—not the full range of benefits that come when organizations implement them.
Here are four critical outcomes financial reporting automation solutions provide to the whole organization:
Benefits of Financial Reporting Automation
- Real-Time Access
Automation software pulls data from multiple platforms, eliminating duplicate reporting efforts that can often lead to confusion and cause delays and bottlenecks in the financial reporting process. It’s possible to consolidate this information manually, but why would you? Doing so takes a significant amount of time and introduces a lot of opportunity for human error. As a result, there’s a lot of doubt about the accuracy of the data. In one survey by the New York State Society of Certified Public Accountants, 70% of CFOs revealed they are not confident that the financial data they use for analysis and forecasting is accurate.
Moreover, in another survey by BlackLine, the data shows that confidence in financial data is actually decreasing over time. C-level executives who are completely confident in the accuracy of their company’s financial data declined from 71% in 2018 to 56% in 2021, and finance and accounting executives who are completely confident declined from 38% to 30%.
Automation tools quickly and seamlessly integrate with existing software systems and allow reports to come from one centralized, trusted source. That data is then analyzed and interpreted into customizable dashboard views, providing the ultimate flexibility and insight to financial professionals.
2. Real-Time Access
Analyzing data from the past is like looking in a rearview mirror—it’s only helpful when it comes to predicting and making educated decisions about the future. Financial reporting automation is based on real-time data, which means that data is updated and organized as it enters the system. Key financial statements are readily accessible, enabling businesses to accelerate decision-making and speed up the necessary approval processes, all based on accurate data.
Additionally, integrated cloud-based automation systems promote collaboration by providing the entire organization with a centralized, cloud-based resource. Cloud solutions allow all business functions to have access to the same data at the same time, eliminating the lag time associated with manual reporting structures. Stakeholders across all departments have the ability to easily collaborate, regardless of location, time zone, or position within the company.
Accuracy in data collection is a challenge for every industry, but it’s especially critical in finance.
Financial reporting automation has a powerful effect on financial accuracy because it ultimately creates a single source of truth. It removes a significant amount of the risk of human error in data entry, as well as the potential for duplication. Software solutions with features like routine checks to remove redundancy, and real-time alerts help ensure reports are up-to-date, accurate, and complete.
In addition to preventing errors, automation reporting capabilities help companies maintain compliance by removing the need to manually compile data and submit filings necessary to adhere to various laws and regulations. Automation software with notification features to alert teams of upcoming deadlines helps to ensure filings are completed and submitted in a timely fashion in order to avoid costly penalties.
Gartner’s research shows that the average amount of avoidable rework caused by human error in accounting departments equates to 25,000 hours annually. That’s an incredible amount of time, talent, and resources wasted on avoidable mistakes. Because of how financial reporting automation benefits consolidation, timeliness, and accuracy, it ends up limiting the potential for human error and increasing the efficiency of finance teams. In one survey, finance professionals accelerated the reporting process by as much as 50%, and also saw time savings of 70% in their financial planning process.
It’s important to note that efficiency in the short-term leads to incredible gains in the long-term, as well. When less time is spent on the task of manually producing reports or correcting manual errors, financial professionals can shift their focus to analysis and strategy, ultimately making better, more strategic decisions on behalf of the organization.
Automated Financial Reporting Strengthens the Backbone of Your Organization
With reliable, accurate, and timely financial reporting, businesses have access to the information they need to make strategic decisions that propel the company forward. The right finance reporting automation solution will alleviate finance teams from the more mundane tasks, enabling them to shift their focus toward developing financial strategies to meet the needs of the business in order to achieve their identified goals and objectives.
Interested in learning more? Watch the Quartz Network presentation How CFOs Are Rethinking Status Quo Processes With Modern Fintech to see what role automated financial reporting solutions will play in the future of finance.