Every business needs financial reporting software. Yes, even yours! There’s no shortage of accounting software and almost all of them offer financial reporting – so how do you choose the right one? Well, details are everything in financial management. To understand business performance and how to create effective strategies, you need a tool that helps you draw financial analysis from every angle. Let’s take a look at the best financial reporting features to look for in accounting software.
Why Financial Reporting is Mission Critical
Financial reporting can answer all of the crucial questions of managing your business. The numbers don’t lie. At the end of the day, your business is powered by the finances generated from and consumed by operations. This is true for every business model, type, and industry. Understanding your business’ finances and recognizing revenue patterns is mission-critical. Software, vendors, resources, projects – all these, and more, are influencing business decisions at an accelerated rate because of our digitally connected world. Financial reporting lets you drill down into what’s causing the numbers. Financial analysis like this is powerful because you can rework strategies to transform and empower your whole organization.
Eliminate Guesswork. Build Winning Strategies
Let’s face it, uncertainty is bad for business strategy. Stop guessing what’s driving expenses and income. This won’t properly address financial or operational issues. Financial reporting helps you build actionable plans by eliminating the uncertainties around financial performance.
Knowing your exact monetary status means you can apply targeted improvements – no more wasting money and time on efforts that don’t produce results. To do this, you need detailed reports that help you identify exactly what you need to know.
Choosing Financial Reporting Software
Financial reporting software should fit your business’ specific needs. Therefore, look for a solution that is flexible and easily tailored to suit your individual business needs. Let’s take a look at other software features we recommend for generating the best financial reports.
Naturally, you’ll want accounting software that’s equipped with a strong set of financial reports. Flexibility is an important software feature because every successful company utilizes custom financial reporting. The way your data is compiled and presented is crucial.
A strong financial reporting software should let you modify rows and columns to compare and analyze finances in a way that fully addresses how you operate. Adding custom calculations and formatting lets you target specific data. This also helps maintain accuracy and helps you compare your business financials more effectively, particularly for these reports:
- Comparative of budget to actual
- Comparative of budget to budget
- Comparative of actual to actual
- Year-to-date reporting
- Month-to-date reporting
- Report on relative accounting periods
Some additional financial reports you need are:
- Profit and Loss
- Profit and Loss Versus Budget
- Balance Sheet
- Trial Balance
- Cash Flow Statement
- Ledger Inquiry
All these reports are valuable because they can be tailored to answer broad or specific questions. Through profit and loss reports you can determine if certain expenses actually bring a return on investment or if they’re just contributing to revenue drain. Cash flow statements let you see how efficient money is being handled throughout the company. Wondering how your business is doing compared to last year? Run a year-to-date report. All of these details give you the 360-degree view of your company’s performance. This robust financial report set is also important for creating documents needed for taxes and legal audits.
Developing a financial report might seem complicated, but not with an automated accounting system. Manually entering and re-entering transaction details from your other apps is a pain. It also jeopardizes your reports’ accuracy. An automated system captures and records your data instantly and populates the details correctly into the report. Just a few clicks and your report is ready – no more tedious spreadsheets!
Connected to Your Operations Software
To provide the high-quality reports you need, your accounting system needs to be connected with your management system. Apps that record sales, plan for projects, and even manage inventory control impact your finances. To compile accurate reports, transactions generated by other tools must flow into the accounting system. This also saves you valuable time.
Collaboration and Visibility
Financial management and decision making should be a collaborative effort. Your accounting software should enable your whole team to review or participate in the reporting process. This allows for a more accurate reporting and ensures that the team can visualize the finances impacting operations, and results. Additionally, your reporting system should have functionalities to let you search for specific criteria. This saves you time looking for key financial details, users, or product info.
Invest for the Future
To guide the growth and security of your company, managing your finances is essential. Cloud-based financial reporting software is vital because you can use it to find the best strategies for your business. Whether you’re looking to reduce costs, scale operations, or take on new opportunities, insightful financial reports will help you find the info you need to achieve your goals.