Accurate financial reporting is one of the foundation stones of financial stability and success. However, it can be difficult to ensure both timeliness and accuracy. Maintaining a high quality of reporting is necessary, not only for things like tax compliance, but to ensure you have the information you need to make better business decisions.
Since market conditions change daily, stakeholders require access to updated financial reports on a regular basis in order to make these decisions. This is why businesses need to follow certain best practices to get their financial reporting right. Whether you’re in senior management, a new business owner, or any professional level in-between, timely, accurate financial reporting is a skill worthy of your best efforts. Let’s look now at 8 tips to ensure accurate reports.
1. Identify Critical Information
One of the most important tips that you have to consider if you want to create financial reports on time is to identify critical information. Start by evaluating which documents are necessary for making data-driven decisions. Then, you must prioritize these documents accordingly. Simplify all of your deliverables so that every piece of critical information is provided on time.
Besides, you don’t need an extensive profit-and-loss statement every month. Instead, a simple profit-and-loss statement will sometimes suffice. The same goes for your balance sheet and the statement of cash flows.
2. Use Collaborative Digital Tools
In order to create financial statements on time, give collaborative digital tools a try. They will make your life a lot easier. Go through the digital tools available to you to determine which ones to use for automating tasks.
These tools will also help reduce costs and allow you to get more accomplished. Some of the tasks that you can easily automate include inventory management, tracking receipts, making certain payments, tracking expenses, and other important functions.
Besides, you can turn to bookkeeping platforms for centralizing data and generating financial reports with minimal time. There is just so much that you can do on your own. This is why you have to take advantage of the latest technologies. This will help you improve your reporting practices, easily create needed forms and documentation, gain quick access to any evidence of financial errors, stay on top of your pre-determined control criteria.
3. Create a Calendar of Events
To stay on top of financial reporting, you are going to need to prepare a schedule for all the activities you expect to occur in a month. Before the start of a new month, go through your calendar to determine what events will take place and make sure there aren’t any necessary changes that need to be made.
Even the simplest of schedules will make it a lot easier for you to manage your work, finances, and financial reporting. This is part of your control framework. You must ensure your team understands and agrees to the timeline so you can maintain consistency.
Speak with your bookkeeper, audit committee, CFO, and other key decision makers in advance to clarify the scope of work for each month. During your meeting, set the specific parameters of key projects before you work on your financial statements. This will ensure every person is on the same page with regard to financial decisions, goals, and reporting.
4. Tailor the Reports for Your Industry
The next tip that you have to keep in mind if you want to prepare financial reports on time and ensure that they are accurate is to tailor the reports to meet the requirements of your particular industry. Since every industry is different, you are going to need to make changes to your financial reports to meet these unique requirements.
Financial statements make for excellent tools when running a business. They enable business owners to make decisions proactively. Your focus should be on reliability and fulfilling the needs of your industry. Your stakeholders need to compare the financial statements of your company with other similar companies in your field or similar fields to be as relevant and productive as possible.
5. Reconcile Your Transactions Regularly
A great tip that will help you improve your financial reporting is reconciling transactions on a regular basis. The last thing you want is to have to make reconciliations at the end of the month. It will only make things a lot more difficult for you, as you would have to recall certain facts and figures and put in the extra effort to ensure accuracy.
In fact, successful businesses know the importance of tracking and recording operational transactions daily. You also need to reconcile general and subsidiary ledgers every week to save a ton of time. If you fail to do so, you will have a lot on your plate and you will struggle with creating timely and accurate financial reports. The more regularly you reconcile transactions, the easier life will be for you.
6. Prepare a Delivery Schedule
In addition to the above, you need to come up with a delivery schedule to create your financial reports on time. It is best to dedicate plenty of time to building a detailed close schedule, as it will guarantee that everyone has an idea of what and when things need to be done.
Setting a deadline for each task will ensure adherence to the objectives that guide your long-term goals. Most entries, schedules, and reconciliations should be completed before the period ends, so that you can focus on performing accuracy checks. Reviewers need to perform reviews early on instead of waiting.
Prep work can make all the difference. That way, you no longer need to check on everyone constantly. Instead, your team members can come to you whenever they have issues.
7. Leverage Data in Real-Time
One secret to creating accurate financial statements is using data in real-time. Since most software packages integrate APIs, you should be able to extract all the data you need to create the reports. In fact, you can rely on software to make quick changes to reports and to save you time.
The past few years have seen an improvement in the way people use technology. Remaining competitive and relevant in today’s world means choosing the right tools and making the most of available data-driven technologies.
Data is your biggest asset. You have to use it to get the results you are looking for. The latest software allows you to obtain data in real-time with ease. Don’t hesitate to use it so you can unleash your organization’s full potential.
8. Focus on Flexibility
Lastly, you have to improve flexibility. It is only possible when you optimize your workflow. Staying flexible, agile, and adaptive is important in every aspect of business, even in your bookkeeping, money management, and financial statements.
These statements are more than just reports for filing taxes and attending board meetings. They serve as effective tools for making the right decisions. You want to be sure your workflow, data collection, and reporting methods meet the current needs of your company and your objectives and be ready to change some of them when they do not.
A quick way to get on top of flexibility issues is by automating much of the work. It is important that you use a modern cloud application for accessing accounting data and automating the creation of financial reports.
It can be very time-consuming to sift through everything to create various financial reports. Also, automation helps reduce the possibility of making errors. You will save money and manage your company with greater confidence. Software is there for a reason. Use it to take care of some of the heavy lifting.
Conclusion
Creating timely and useful financial reports shouldn’t be difficult. It also shouldn’t be something you undervalue. It needs to be a key component in your financial goals and in the way you plan each month.
If you are struggling to keep up with your company’s accounts, find yourself overwhelmed with more bookkeeping that you ever wanted to be, outsourcing to an experienced bookkeeping service provider may be your way out. It will, instead, allow you to focus on core objectives, like innovation, talent acquisition, training, operations, and growth.
Sound Accounts helps business owners achieve more and do so with less stress every day, by providing individually tailored bookkeeping support plans that meet the needs of companies in every market. Connect with us today to learn more and see if you qualify for 6 months of free QuickBooks.
To learn more about good financial reporting, check out our frequently asked questions below.
FAQ
How do you ensure timely and accurate reporting?
If you want to ensure timely and accurate reporting, you need to employ a bookkeeper or partner with a bookkeeping service provider to handle your accounts and allow you and your key players to focus on their strengths and goals.
Additionally, make sure you’re using the latest accounting technologies, reconciling accounts regularly, recording information immediately, reviewing your bookkeeping, reporting, and financial goals on an ongoing basis, and training your team to gather and provide the information you need to create accurate reports and projections.
Why is it important to provide accurate and timely reports?
The main reason why you need accurate and timely reports is that they help you, your management team, and all stakeholders to make important decisions when they need to. Accounting is the language of business. By presenting the right financial statements, owners, board members, key investors, and your financial management team will have the right information to steer the company exactly where it needs to go.
Some good reporting habits include:
- Hire an external auditor.
- Adopt strict internal controls.
- Ensure accurate data entry by employing an experienced bookkeeper.
- Reconcile internal and external records regularly to save time and effort.
- Check the income statement and balance sheet to find out if any errors have been made and make necessary changes.
What are some other helpful financial, organizational, and management habits to keep in mind?
Studying consistently to make the most of business insights and for making improvements in management decision-making, the testing of controls, and providing reference standards for accounting.
It’s important to make the most of annual reports, along with monthly, weekly, and daily reporting. Don’t miss staying on of your credit score, credit report, and credit history, maximizing your financial status and agility within your field, and owning up to the practice of transparent reporting. Use consumer reports, audit reports, and error reports to refine your practices, and make the most of technology and data to improve accuracy standards, while using your money to achieve the goals you set out from the beginning.