Businesses depend on accuracy in their financial reporting, but ensuring that reports are timely is equally important. Market conditions and individual business financials can change on a daily basis, and stakeholders need access to verified, fully updated financial reports to make the decisions most likely to encourage continued financial success or to correct course if needed.
Following best practices in financial reporting can ensure that even the busiest entrepreneurs have the information they need to make well-informed decisions. Below, nine Forbes Finance Council members share their top tips for accurate and timely financial reporting.
1. Simplify By Identifying Truly Critical Information
Determine the documents you need to make data-driven decisions one, five, ten, and 15 days after the end of the month. Prioritize them accordingly. Then, simplify the deliverables to include the critical few pieces of information that you actually need. Do you really need that line-item P&L with 100 rows, or can you get by with a topline version that includes ten rows? – Anthony Bahr, Strategex
2. Leverage Collaborative Digital Tools
Timely and accurate financial reporting can be a way to reduce business costs. Leveraging existing digital tools that automate tasks, such as tracking receipts and inventory management, can ease small-business operations. Many bookkeeping platforms can also sync with these tools, centralizing all your data and making timely financial reporting that much easier. – Luz Urrutia, Accion Opportunity Fund
3. Set Up A Calendar Of Events
Preparing a schedule of activities and tasks with a calendar of events is paramount. A simple schedule becomes an important management tool. Get buy-in from the CFO, audit committee, auditors or other senior officers who have agreed to the timeline and clarified the scope of work and project parameters for preparing financial statements. This helps in creating team alignment and accountability. – Peter Goldstein, Exchange Listing LLC
4. Ensure Reports Are Tailored To Your Company And Industry
Your financial statements should be tools that allow you to run the business and make decisions proactively. They should be reliable, timely (created within ten to 15 days of the end of each month), and tailored to your industry, stage of the company and goals for the future. They should compare you to others in your industry, provide benchmarks and report on key performance indicators. – Leslie Heimer, American Liberty Mortgage | Stockworth
5. Reconcile Transactions Throughout The Month
One way to deliver timely financial reports is to reconcile transactions consistently throughout the month. For example, you could track and record your operational transactions on a daily basis. Similarly, reconciling subsidiary and general ledgers each week can save considerable time at the end of the month. Additionally, one could use automation within technology to simplify this chore further. – Justin Goodbread, WealthSource Partners, LLC
6. Implement A Delivery Schedule
In advance of the period end, build a very detailed close schedule so that everyone knows what they are supposed to deliver and when it is to be completed. Many reconciliations, schedules and entries can be completed prior to the end of the period, extending your resources. Reviewers should not wait until the end to review, either. Organization and prep work are important. – David Kelley, Mailprotector
7. Pull Data In Real Time
I think it is most important to leverage the integrations and APIs built into software packages to pull data in real time and update it quickly for client-related pieces. The news cycle has compressed tremendously in the past ten years, and leveraging technology—especially in the financial services world—is mandatory to remain relevant and competitive in the marketplace. – Dan Cupkovic, ARGI Financial Group
8. Optimize Workflows For Flexibility
If the last few years have taught us anything, it is that we need data to make decisions immediately in our businesses. A lot of companies look at their financial reporting as primarily needed for tax purposes or board reviews and not as a tool for decision-making. Workflows and systems should support flexibility, and if they don’t, it is time for new tech and process consultants. – Marjorie Adams, Fourlane
9. Set Up Automated Financial Reports
Utilize modern cloud software to access your accounting data and automate your financial reporting. Rather than trying to scrape up everything needed for a financial report—which can be time-consuming and error-prone—using cloud software with direct data access can save you time and money by automating these tasks. Set up an automated financial report and let the software do the heavy lifting for you. – Nick Chandi, ForwardAI
