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Preparing Financial Reporting for Senior Corporate Leadership

Keeping company leadership up-to-date on financial operations is integral to running any business. Accurate and timely financial reporting allows leadership to monitor performance and make informed decisions.

Financial reporting for company leadership should summarize performance. Reporting tools need to contain enough information so readers can understand trends as a success or failure from a very high level. As more details are required, this information should be available in financial systems. Alternatively, a more efficient use of time would involve a member of their team putting a detailed report together. Detailed reviews should be for a specific purpose and not the go-to method to review results. It would not make sense to sift through customer-level sales when the more pressing question is to find out how a particular region or the overall organization is performing.

Most companies put together their financial data in Excel. It is a significant time saver and often overlooked option when working with an accounting system. Excel files are great for analysis, or choose a PDF when data should not be editable. Also, auto-generating reports are the quickest way to put anything together and a preferred method over Excel-based models.

There are also numerous choices when it comes to software. QuickBooks is a solid choice for most companies under $3 to $5 Million. The flexibility and reporting options make it manageable for whoever is responsible for the accounting software. Custom reports can be built and automated beyond traditional financial statements that give a clearer picture of what’s going on with the business. A benefit of QuickBooks is that companies switching from a Cash to an Accrual basis will find it possible to run reports in either method. Quick and easy options would include an analysis of historical performance against current results. Without going too in-depth about implementing accrual accounting, entries and accounts need to be categorized to support the change. Excel no longer needs to be used to convert data. It is worth mentioning that US GAAP requires companies to switch from a Cash to an Accrual basis when they are publicly traded or have $25M in sales. Read an overview of the two methods and when it might be a good time to switch.

Another consideration is to add relevant graphs or visual representations to the automated reports; after all, not everyone loves to stare at spreadsheets and endless rows of data. Graphs can condense several different comparisons helping to make results easier to digest for most readers. The system-generated component reduces the need to re-link graphs to new data improving accuracy and saving time. Board reporting would benefit from this structure as these reports are made infrequently but must be as accurate as possible. This audience needs to know how the company is performing and tends not to focus on the specifics of the business very often. Anyone who wants to take this to the next level can also add heat maps that show specific metrics. Sales revenue or vendor costs based on a geographic location are often popular options.

Another milestone is to get the process streamlined or system-generated where possible. Accounting software generates formatted reports. A significant benefit is that they won’t be prone to human error. It also shortens the turnaround time when it’s time to update results for the next period and is a victory for any team under a tight deadline.

Financial reporting looks different depending on the intended user. Senior leadership might need to know how much the next payroll will cost for the organization, but only on a summary level. The head of HR would be interested in a detailed version. A department head should only see the costs of their direct employees. It’s critical to know the target audience of the reports and how to best present the data.

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