If you have been working in finance for a long time, you would know that financial reporting goes a step beyond just maintaining your books. Nevertheless, accounting and bookkeeping lays the foundation of a strong financial base. From this base, you go forth to create financial reports that bring value to the table.
Good financial reporting can help to track a business for more profitability and guide it through good decision-making for the future. Numerous small businesses struggle to really take full advantage of their financial reporting. However, here are certain tips that could bring a difference in whether your financial reports just tick boxes or truly help to drive the growth.
Identifying primary business drivers
When you create standard reports, you will get standard outputs, but each individual industry and business will have its own key business drivers, and you must ensure that the financial reporting offers useful information about those drivers. Some of the common business drivers are production rate for manufacturing, exchange rates, efficiency rates and downtime, and so on.
As your business too has these different drivers, you would want to ensure that your financial reports describe these drivers rather than just the typical standard ones.
Optimizing the chart of accounts
If you are using any accounting software, it will help you create a Chart of Accounts and populate the same with things such as assets, cost of goods sold, liabilities, and expenses. All these things are organized from the accounting perspective keeping in mind the generally accepted accounting principles. Management of your accounting function is to inform your management about certain things that will help them understand and improve the business. Create a meaningful Chat of Accounts designed that allows you to track the information you need.
If you cannot handle the accounting function on your own, you can take help from accounting services in London.
Financial reporting is all about recording everything in a manner that the complete financial picture is clearly visible from the report. We know that the entire process seems a little overwhelming but with the right team in hand, this is very much achievable. The more details you can record with your financial report, the better it will turn out to be. Latest technologies will help you track these small details in the financial report.
Automate as much as possible
Reports delivering numbers on a page is okay, but applying data visualization with the numbers will offer greater value for management teams. Such explosion of big data along with the development of visualization and analytical tools will interpret better and it will continue to filter down to small businesses via apps.
If you need reliable accounting services in London, talk to us.