Reporting: 5 Reasons Financial Accounting Software Is a Must-Have
With several departments generating their own numbers using their own complex Excel formulas, it’s no wonder that small- and medium-sized businesses (SMBs) often struggle with finding a single clear version of the truth.
Who has the right numbers? Nobody knows!
The ability to communicate accurate financial data to lenders and stakeholders is critical. But how do you know which version of the truth to rely on? Excel and require manual actions, which can create issues and can be error-prone. They also can’t capture the discussions between managers about the results of reports. Nor do they contain automatic alarms that trigger management actions based on a threshold.
In order to achieve a single version of truth and process high-quality reporting actions, SMBs absolutely must use financial accounting software. It’s only with powerful tools like this that an entire company has full confidence in the numbers.
Here are five additional reasons why financial accounting software is the best way to generate financial reports for your company.
- The reports are more sophisticated: When it comes to tracking and monitoring the financial aspects of your business, it’s possible to combine several spreadsheets with complex formulas and produce information. But this can be difficult and error-prone. With financial accounting software, SMBs run reports about every aspect of the business, including the future. As a rule, the most important report for most SMBs is a reliable cash flow statement. Without this, it’s difficult for SMBs to know if and when they’ll run out of money. In addition to cash flow reports, here are the most common reports that SMBs need:
– Profit and loss: This report contains current month actuals, last month, last month prior year, budget, year-to-date and other common numbers.
– Key performance indicator scorecard: This report displays your top metrics, including sales numbers, inventory or whatever figures are critical to your business.
– Balance sheet
– Top 50 sales transactions for the month
– Payables report showing the largest payments made that month
– Receivables report showing outstanding bills
- It feels like Excel, but it’s better: SMBs aren’t armed with scores of accountants and IT professionals. They’re run by “regular people” who may not understand how to use complicated programming to crank out the necessary data to make decisions. With more than a billion Microsoft Office users, most business people heavily rely upon Excel. Great financial accounting software tools are capable of sophisticated data-crunching, but are also as easy to use and integrate with Excel. These tools allow nontechnical users to use their competencies around Excel formulas to build and run ad hoc reports. That saves time and speeds up decision-making.
- More accurate forecasting: Planning for the future requires advanced reporting that handles revenue, capital planning and personnel figures. Using finance tools to achieve these operational goals is critical because they’re able to establish parameters around the goals.
- It’s cloud-based: Unlike financial accounting software that is deployed on-premises, a cloud deployment provides additional benefits such as increased data and application security, mobility, disaster recovery and business continuity (should the unexpected happen); keeps your business on the latest technology and most recent application releases; and, if you select the right cloud-based solution, you can take advantage of an all-inclusive monthly subscription-based investment model rather than dealing with unexpected upfront and nonrecurring charges and fees.
- It’s automated: Unfortunately, many SMBs are still using spreadsheets or QuickBooks to manage their finances and a separate, industry-specific billing system to handle their payables and receivables. These companies must manually move batch data from the billing system into QuickBooks or the spreadsheets to generate reports. Financial accounting software does the transferring and calculating work for you. Plus, the software does it faster, and without the risk of human mistakes.
Your company deserves one version of the truth. It deserves to have insight into all aspects of the company. It deserves to eliminate mistakes, save time and move ahead of the competition. That’s why your company deserves the power of financial accounting software.