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Why real-time reporting is the holy grail of finance

Just how difficult is it to achieve real-time reporting in the finance function of 2021? Our CFO, Jenny Himsley, assesses how and why it has eluded finance for so long.


The finance department has always aimed to be a strategic partner to businesses, helping to inform company decisions and measure their effectiveness. Unfortunately, this has been retrospectively looking at historical data and information and providing feedback sometime later, possibly weeks or months.


Now as other functions within businesses are harnessing the power of technology to speed up operations and improve efficiency, finance has an opportunity to close the gap between data input and analysis and feedback. In an ideal world, within minutes or hours, new data should be able to be fed into the system and updated forecasting and projections supplied based on the new information. However, in many organisations, there still appears to be a lag between data in and out of complex finance systems.


Shifting towards real-time reporting

Does this process look familiar? Extracting data from multiple ERP's and using an Excel doc, likely with an absurd number of tabs and complex formulas, to alter the data in order to get the desired result. If you answered yes, you're not alone. Numerous finance departments are performing this process to get results but it has two main issues.


Copy and paste an incorrect number or formula or input a digit into the wrong cell and you've got a problem on your hands. Manually entering data into Excel is prone to errors. This is the first issue. The second is that copy, pasting and cutting are incredibly manual and time-consuming which takes valuable time away from analysing the results you've so painstakingly worked on.


Now, when the right technology is implemented, finance can begin to move towards a more real-time view of the organisation's financial position. In many instances, it's being demanded from c-suite and board-level executives who want increased visibility to make better decisions. The assumption being that, if other functions have leveraged technology to make improvements, why is finance lagging behind?


What's needed from future finance software?

When assessing useful features that would be required for a robust finance platform that offers real-time reporting, one of the most important factors is its support of a company's processes and its flexibility to build workflows that enhance what’s currently in place.


Generally, the foundational workflow that a business has set up is correct. However, they’ve been in place for multiple years and need updating. The issue now arises that a process has been established and works, although it may not be the most efficient, it is one that the finance department are comfortable with and are reluctant to change.


Here at ARKK we've done our share of ARKK Automation implementations and have built a platform that from the ground up can be tailored to the specific needs of a company. With automated workflows, processes and calculations managed within for:sight it means that the time from data input to output is significantly reduced, helping businesses achieve a closer to real-time view of their financial position.


Why isn't everyone jumping onboard finance technology?

One of the first things to mention here is that Excel still remains the lifeblood of finance teams and for good reason. It’s the universal application that everyone in finance around the world knows how to use. No matter what company you work for, it's guaranteed that they'll have Excel and you’ll be familiar with how they use it. Little need for training or learning a new, potentially unintuitive software, if you've got Excel. Although, using Microsoft's spreadsheet program for numerous large complex calculations and adjustments does come with its own risks of inaccuracy and some spreadsheets can be incredibly bespoke to a user.


Another reason why finance may initially seem reluctant to jump on board is the perceived upfront cost and implementation time of finance technology. Although the overall time and cost savings will be beneficial, as well as general workflow enhancements, the initial pain can be off-putting. Times have changed though and cloud-based platforms such as for:sight, significantly reduce upfront costs and implementation is extremely simple with little involvement from IT.


A third factor is that historically, finance and accounting software hasn't been intuitive and a far cry from aesthetically pleasing. Designed, built and used by accountants it was function over frills, with complex navigation and user interfaces that weren't for the faint-hearted.


Move along to 2021 and we've come a long way. Modern finance platforms are designed to be functional but also with the end-user in mind, keeping the interface clean and intuitive yet powerful. This is a win-win situation as it makes the software more accessible meaning finance professionals are more inclined to use it.


Finance has strived for real-time reporting for many years and with the adoption of technology, it's becoming a reality. Alongside real-time reporting, technology also offers a huge range of benefits that make it an appealing option. If you haven't already, there's no time like the present to invest in a digital solution that will empower your finance function and give you improved financial visibility.


If you'd like to know more about financial automation and technology, have a read through the ARKK blog.