A growing number of businesses are switching from manual preparation of financial statements to financial reporting solutions that automate the process. For those that have not yet made the switch and are curious about the benefits offered by an automated financial reporting tool, this article will help.
It outlines eight key benefits of using software or cloud applications to automate accounting and financial report generation. Some of the financial reporting tool benefits discussed in this article include time savings, cost savings, risk reduction, improved efficiency, increased regulatory compliance, audit preparation, reduced turnaround time and cost effectiveness.
External reporting requirements for businesses continue to increase every year with new dictates constantly being passed for regulatory reports, quarterly and annual reports, shareholder communications and more. Companies wanting to improve compliance yet simplify the reporting process are turning to new financial reporting tools such as automated financial reporting software and cloud solutions.
Here is a list of eight key benefits of financial reporting software that is designed to add automation to the process of generating financial statements:
- Automated Reporting Saves Time
Manually generating financial reports is a complex and time-consuming process. On the other hand, with an automated financial reporting tool users can link source data to report data, combine data from different systems and set rules for creating reports. These are features that reduce the time needed to gather data and generate reports.
- Automated Reporting Saves Money
In addition to saving time, financial reporting solutions can also lead to significant cost savings. They reduce the workload for employees who once manually created reports and often cut overtime hours paid during crunch times when reports come due.
- Automated Reporting Reduces Risks
Let’s face it. Even the smartest, most detailed oriented people make mistakes. And, when financial reporting is done manually, it can often lead to some costly errors. With an automated financial reporting tool, all data is linked back to original data sources providing a consistent and transparent system that reduces several risks. These risks include errors, late filing, non-compliance and insider leaks.
- Automated Reporting Improves Efficiency
Automated financial tools are designed to improve the efficiency of a company, organization or firm’s accounting system. They speed up the process of gathering data and generating reports so employees can focus on other duties.
- Automated Reporting Increases Regulatory Compliance
Automated financial reporting solutions put the user in control of the process. They define who gets access rights and how protocols are followed. This results in fewer errors and a lower probability of fraud since the financial reporting tool keeps track of each transaction and who was involved.
- Automated Reporting Prepares Businesses for Audits
One of the drawbacks with manual preparation of financial reports is that there is no audit trail that records who made changes to the data. No business wants to be audited but if an audit occurs, an automated financial reporting tool can insure the business is properly prepared. Financial reporting solutions create tight audit trails that allow users to compare versions of a document to see who made the changes, what they were and when they occurred.
- Automated Reporting Reduces Turnaround Time
With manual preparation, so much time goes into preparing the financial statements that there is little time left to evaluate the reports. Automated financial reporting solutions ensure reports are generated quicker. This leaves more time to review the financial statements, analyze the data and use that data to make informed business decisions.
- Financial Reporting Solutions Are User-Friendly and Cost-Effective
Many businesses continue to rely on preparing financial reports manually because it’s familiar. and making the change to an automated financial reporting tool can be intimidating. However, one of the benefits of financial reporting software is that these programs offer an intuitive interface and the ability to customize reports to the needs of the individual business. Many financial reporting solutions are also very cost-effective and actually represent a significant savings over continuing to prepare reports manually. With the right financial reporting tool, a business can save time and money while boosting the productivity of its operations.