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Why Do You Need Financial Reporting Software in Your Company?

Posted on:  May 6, 2022

Running a business is no small feat, especially for a startup or an SMB trying to expand their horizons. A smart business owner understands the significance of having adequate financial management and reporting software in their arsenal. However, there is a common misconception that a financial reporting system is only for large-scale enterprises and giants leading in the industry. Well, that’s simply a fallacious theory! Every business deserves to manage all its incomes and expenses with ease, regardless of the type, size, and market value. In this article, we’ll explain why a financial reporting system is not only a necessity but also vital for your financial growth and business expansion.

What Is Financial Reporting Software?

Financial reporting software collects data from your company’s accounting system and/or ERP and assists with the preparation of different consolidated financial statements, including Income Statements and Balance Sheets. These reports provide a holistic view of all your financial data in one place and allow you to analyze how your company is performing. That way, you can ensure that the health of your company’s finances is always in peak condition.

Do I Need Financial Reporting Software for My Business?

As a business owner, you have a lot of responsibilities. You need to keep your customers happy, attract new ones, and ensure you have the right products and services in place to meet their needs. You want  to keep your employees satisfied, motivated, and performing at their best. You are also required to ensure that your company runs as smoothly as possible with all of its moving parts working together. While each of these tasks is important on its own, they all tie into one area: business performance. On top of that, you need to not only survive but also grow in today’s cut-throat competition. If your business isn’t performing well, it will be difficult for you to accomplish anything else. Therefore, you need to understand how your business is doing so that you can address areas where it’s struggling and improve its performance overall. And this is where financial reporting software can come in handy. With this tool, you can determine where your business stands financially at any given point in time.

7 Reasons You Need Financial Reporting Software in Your Company

1. Provides A Centralized View

Financial Reporting Software allows you to create and maintain all financial reports in one place, providing instant visibility through dashboards. Combining all your accounting, payroll, billing, and expense tracking data helps you maintain accurate records of your fiscal activities. The best bit of the reporting tool is that it’s simple to set up and easy to use. You don’t need to have the IT department go through extensive training or spend hours in meetings figuring out how to use the software – it’s as easy as pressing a button.

2. Streamlines Various Functions

Many businesses rely on Microsoft Excel for their financial reporting needs. Studies show that it takes 100 human hours per year to process payroll manually. Rather than focusing on what your business does best, you may find yourself stuck manually entering data into cells and trying to create charts and graphs from scratch. With a financial reporting tool, you don’t have to enter data into a spreadsheet manually. Instead, you simply have to connect your accounting and/or ERP software to it. The tool will then import your existing data and compile it into a spreadsheet-like format, allowing you to see your key metrics at a glance.

3. Reduces Errors and Contingencies

Many organizations use Excel spreadsheets to create and distribute financial reports. However, this method can be time-consuming and error-prone. You can’t afford to struggle with Excel spreadsheets or papers to keep track of your finances, even if your company is still a startup. In fact, if you happen to make a financial error, not only would your fiscal and business goals get affected, but your profits would take a huge dive too. Using financial reporting software enables companies to save time and reduce the risk of errors by automatically generating data-driven reports in a standardized format.

4. Provides Real-Time, Accurate Reports

Accounting software can only collect raw data from your company’s accounts. Without human intervention, it cannot transform this data into a more readable format. With financial reporting software, you can generate insightful reports automatically and accurately. Doing so provides you with a bird’s-eye view of your company’s financial performance and eliminates the possibility of any human error.

5. Improves Transparency

A well-designed reporting tool is a perfect way to strike a balance between the internal and external parties involved across your organization. You can gather information from general ledger systems, present it in a format that meets regulatory requirements, and easily share it with stakeholders and managers.

6. Offers Precise Predictions

Spreadsheets will never be able to give you accurate predictions or forecasts. You can enter formulas into spreadsheets, and they will try to come up with a projection based on what occurred in the past. But these projections are always flawed because they are based on historical data that doesn’t necessarily reflect future trends. A reporting tool can analyze real-time data and adjust its prediction accordingly. Furthermore, financial reporting software helps you grow your business by giving you an idea of which departments are working best for you and which ones could improve.

7. Helps Make Better, Informed Financial Decisions

To run your business profitably, every decision you make must drive your company’s financial growth. And that’s only possible if the management has reliable information they can trust. Financial reporting software consists of robust automation and financial intelligence tools that help prepare financial statements and reports. It helps you monitor your expenses closely, enabling you to cut down on excessive spending where required. You will also have a firm grip over your finances by being alerted whenever there is a deviation from the budgeted figures. With financial reports, you can determine whether or not you’re investing wisely and take corrective measures before it has an adverse impact on your bottom line. Are you still managing your purchases, sales, and expenses on paper or spending hours using spreadsheets to create your financial reports? It’s time to stop and invest in an effective reporting tool. To learn more about how our financial reporting software can help you manage all your finances and identify more opportunities for profit and growth, call 866-214-6008.

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