Financial reporting requires the collating of some pretty important information, so you want to make sure the information youre getting across is easy to understand and relevant. Here are some top tips for producing financial reports using a modern accounting software system.
What am I trying to communicate anyway?
Weve all been there, youve been given a wide brief for a new report, and you dont know where to start. Most people then begin to panic, and try and collect every single detail from every single source of financial information to put in the report so that its all there for everyone to see.
The problem? No one would read your report, it would be massive. Accountants love detail, we want to know everything! However, that doesnt mean that we should share all of that detail in our weekly, monthly and quarterly reports.
Ask yourself only the most important questions. Whats the key number? Whats at the top of the tree?
Once youve decided what the really important, high-level information is then stick to it, and dont report on anything else.
When doing this, its always useful to keep these two thoughts at the back of your mind:
1. Its your job to make sure that the information is available to those who need it.
2. Dont make them think about what theyre seeing.
If you say these to yourself when compiling your data it will make the whole process much smoother, as the people looking at your report wont be bombarding you with any tedious questions such as What does that mean?, Is that good or bad?. This only adds to your workload.
Online accounting software, which has handy reporting dashboards, can give this top-level information instantly to those who need it. And as people update the system, these dashboards automatically update, no more waiting for the latest report, its there at your fingertips.
Agree the format
The nature of reporting financial (and non financial) information is that its not always going to be good news. Most likely, people will want to look at the data from a more favourable angle by changing the format of the report.
So whats the solution? Agree the format of any reports and only change it at an agreed point in time. This means you can focus on the content rather than how it is displayed.
With a piece of cloud-based accounting software, you can even set up report templates, so youll always know youve got the right information needed in the agreed format.
Everyone receives information differently
Your reports must look simple. Not brilliant, not dazzling, just simple! Sometimes, an image is much easier to interpret and is most often easier to receive. A simple line graph or a pie chart will instantly tell you whether something is good or bad, as long as the key is clear.
You should to keep the colours clean, simple and uniform. If red is target and blue is actual, then keep it that way for all graphs. Soon itll just sink in and the information will be absorbed quickly.
Dont forget to put a title on the information. You know what the information is showing, but you need the receiver to know what they are looking at too. It needs to be so obvious that they get it in the first 5 seconds.
The detail is in the detail
As Ive mentioned above, accountants love detail. However, its our job is to provide the appropriate level of information, in an easy to understand format. You can make this job even easier with the use of a cloud accounting system, which centres on a devolved way of accounting.
Departmental managers can enter their own data, meaning you have only one place to look for information. Plus, by having some handy reporting dashboards available to managers, they can have the most up to date reports in front of them. And for more detailed analysis, in depth reports could even be produced through the system automatically on a monthly basis, with an agreed format template.
So, by using all the points above, your reporting process will hopefully run smoothly, allowing your organisation to make swift decisions and ultimately, help you focus on the most important tasks for your department.