How technology can radically improve your reporting process.
Let’s face it, month-end reporting can be a huge pain. This is especially true for middle market companies. As your business grows and becomes more complex, so do your monthly reporting packages. Oftentimes, this involves the painstaking process of tying together multiple data sources and heavy manual labor in Excel. Simply gathering all the data and ensuring 2+2=4 eats all of your time, and in the end, you may not have any time left for actual analysis.
That last part can be especially sticky for private equity CFOs, who are under immense pressure to find insights and pilot the transformation from fresh acquisition to a profitable asset. Boards want to see the data that will guide the way, and reporting is dead center in the equation.
So, what happens? Late nights, lost family time and mountains of stress every month, with little headway to show for it. But what can be done?
While other arms of the business have been quick to adopt digital transformation, finance departments are only recently beginning to reap the benefits of things like automation, Big Data analytics, machine learning and AI. Many CFOs are now finding there is much headway to be gained by embracing these technologies to simplify existing processes and open new doors of opportunity to drive meaningful change for the business.
With that in mind, here are our top 3 ways digital transformation can radically improve your reporting process.
1. Shrink the reporting cycle from weeks to days
The first, and arguably most important benefit is time. Using anecdotal evidence from our own experience, our clients typically see a 60-80% decrease in the amount of time spent on typical month-end reporting tasks when they start to employ automated systems.
Instead of swapping between multiple programs, downloading a mountain of spreadsheets and trying to tie it up in a neat little bow in Excel, all systems can feed into a centralized location where you can easily report on anything and marry up multiple data sources – a task which is often too big or too messy for Excel. There’s no more need to consolidate, convert or tie-out the data – all of the time-sucking tasks are quietly automated out of your life forever.
2. Get deeper insights
While some CFOs may scoff at these tools as unnecessary novelties, many others are beginning to realize the truth: by outsourcing low-value tasks to technology, you’re regaining time for the very human tasks of analysis and insight.
The simple fact is, no human can be as fast or as accurate as a computer. And no computer possesses the creativity and nuanced knowledge of the business to pilot a truly meaningful transformation the way a good CFO can.
Time saved by removing low-value, time-eating tasks can now be reallocated to asking better questions and digging deeper for insights. With more powerful technology, you can start drilling into variables that would normally require a one-time, third-party analysis with just a couple clicks. Examine customer & SKU profitability. Look at rate/volume/mix effects. Find the leaky pipes and inefficiencies and transform your organization’s inner workings into a well-oiled, profit-driving machine.
3. Empower your team with intelligence
A third, and especially powerful way technology can improve your reporting process is through the democratization of data. Data-driven decision making doesn’t have to be reserved for the board and the C-suite. If your reporting & analysis tool happens to come with an unlimited user base, other teams in your organization can leverage reporting to drive continuous improvement, as well. Best of all, they can do it without constantly hounding the finance team, which can be prohibitive for both sides.
Some of our clients have found this to be particularly helpful for their sales teams, who can now perform their own analytics, freeing up more time in the finance department, and allowing the sales people to craft better, more profitable deals.
We’ve also seen plant operations use reporting to drive better efficiency with several of our manufacturing clients. Powerful insights that opened up a path to greater profitability.
Ultimately the idea is to equip you with the time and the insight it takes to make change possible. Value creation doesn’t just happen on its own, it takes considerable time and effort to see it through. If you’re losing time every month by “toughing it out” with low-value reporting tasks, that is time you’re simply throwing away.