Best practices for Reporting Automation and Financial Analysis

Those who work in Management and Finance Departments know that the biggest challenge they face is having too much accounting information and not knowing what to do with it.  Automating the reporting and financial analysis represent the end of this nightmare.aplicaciones de Microsoft 365

The automation tools of reporting and financial analysis answer the questions that the people in charge of the management of the business’s finances face when dealing with the general balance of yearly earnings and losses:

  • How much has the net earning been by client during the year?
  • How has the evolution process been in sales by client, zone, department, services, etc.?
  • Which are the most requested services and products by our clients? Why?
  • Have we followed the forecasts of our budgets?
  • Are our expenses tied to the budgets that were developed?
  • Where do we generate more revenues, in clients by fee, by specific services or by other proposals?
  • How has the evolution of results been assigned by periods?

Nevertheless, automation of reporting requires a previous organization for it to fully fulfill its functions, which go from generating financial scenarios and reports that assist in making decisions.

Automation of reporting makes it possible to obtain complete and dynamic reports that condensate the critical points of the business related to budget generation and management to place them at the periodic service of those who need it to facilitate making informed decisions in each step of the road towards success.

Which are the objectives of the automation of financial reporting and analysis?

Likewise, automation of reporting and financial analysis of a business must guarantee:

  • Uniformity in the management processes of the corporate information
  • Availability and truthfulness of the accounting data relevant for making decisions
  • Methodology to facilitate the control and follow-up of possible deviations.
  • Materialization of processes for planning and forecasting.

In any case, good practices for automation of reporting allow us to organize the scenario in advance for its correct implementation.  Such good practices are the following:

Good practices for automation of reporting and financial analysis

  1. Applying the general principles of financial reporting

The first aspect to achieve a correct automation of reporting is complying with the general principles of reporting. Now, which are they?

Although there are many more, we can sum up in three the general principles of reporting:

  • Link the objectives of the business with the financial strategies.
  • Apply reporting as an instrument to manage and control the financial activity of the business.
  • Combine the business areas with the talent to take advantage of the growth factors, process improvement, and cost reduction.

These three fundamental pillars are oriented towards generating reports that faithfully reflect the real financial situation of the company; that it fulfills the organizing and supervising role that reporting tools have.

  1. Guaranteeing the availability and stability of the data through Auto Service

Caution and care are two of the qualities that we certainly look for in our financial managers. Endorsing the data is then a logical step that must be taken care of by those who are in charge; and our job is to ensure its integrity, availability, and stability.

For this reason, we must ensure the truthfulness of the financial data; its availability, updated and available before they get to the people in charge of finances.

In this sense, the concept of auto-service finds a new strength; Making sure that the data is correct for those who use it can use it according to their duties within the organization.

Technologies are a big ally to maintain the data all in one place and place it at the disposition of those who need it.

  1. Setting a joined work methodology

The adopted automation of financial reporting and analysis must serve as support for predicting the financial future of the business, even if it bases its predictions on actual and historic data through the different budgets.

In this sense, reporting automation must work as a strategic and operational pillar for integrating a collaborative work plan between budgets and departments.

In other words, automation of the financial reporting articulates all the financial data of all the areas and/or affiliates of your business; it creates a type of interdepartmental canvas that delivers reliable data about the economic health of the business and its budgetary compliance.

This way, a unique and uniform methodology is established that crosses all the fibers of the business in all the levels; and the noises and barriers are eliminated from the information for those who oversee the financial area.

  1. Organizing and optimizing the real financial data of the business

Automation of financial reporting helps to expand the base of knowledge regarding the causes that reveal your reality.  Based on past data, the current financial reality of the business is established to make accurate forecasts for the future.

In summary, reporting automation allows us to:

  • Know-how and where the money of the business is going
  • Lead the way to success through the evaluation of financial indicators
  • Follow in detail the compliance with the budget when facing real expenses
  • Give automatic alerts before possible deviations
  1. Enhancing reports and graphics

Among the good practices of financial reporting automation, presentation of financial statements is in a prominent position.  Reports will have more and better impact and acceptance if we make them more visual; with more interpretative figures, than with flat numbers.

Here the principle of an image is worth a thousand words applies.  Everyone processes an image more quickly than many words; it also minimizes the time invested in the individual analysis of each report.  And let us remember that there are many reports that must be revised before getting to the pertinent conclusions.

Graphs make understanding financial data faster and more fun; and those who oversee processing and analyzing it will have a better disposition to do it.

  1. Having a team of mixed experts

Your work team for financial management must know the traditional workflow as well as the automated one.

To achieve this, you must periodically update your base of knowledge as the updates in the automated tools of financial reporting keep coming in; and that your financial and IT teams share operations as well as experts for:

  • Implementing different models of Financial Reporting; and detecting which one works better for the company.
  • Training new talent in the Financial Reporting modeling tools.
  • Solving discrepancies.

The principles that the financial team, as well as the IT team, must discuss and determine are:

  • Analysis of the needs in:
    • Types and categories of final users.
    • Technological means available and necessary.
  • Necessary Permits and privileges
  • Display of different reports according to the needs of the different users.
  • Improving current processes vs. optimal processes.
  1. Having a complete solution for automation

There are many proposals and solutions for automating financial reporting.  In this sense, these are the most recommended to achieve the objective:

  • Tools for Enterprise Resource Planning (ERP), whose organizing features; conciliation and budget facilitate the creation of balances; operational reports; financial flow; variances and similarities analysis.
  • Solutions in Business Intelligence (BI); which also offer a lot of insight to achieve the business objectives facing the economic objectives of each business.

In any case, the characteristics that you must search in any of them are:

  • Friendly interfaces, simple; with the ability to operate on/offline and deliver key financial reports in a printable and virtual format.
  • Easy implementation and autonomy; with minimum interference in the normal display of daily operations of the business.
  • Great capacity for storage and back-up.
  • Displays in different environments, from any device.
  • Compatibility with your legacy systems.
  • Capacity for growth and adaptability.

Fusionworks has the best tools for the automation of financial reporting; at your reach and with all these fundamental characteristics to start your operations with the right foot. Contact us here to request a free demo.


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