Your finances are your business's lifeblood. They're not the kind of thing you should leave up to chance. Having a complete understanding enables you to make smarter decisions by better evaluating your risks and capabilities.
Amazingly, even in today's tech-driven world, many businesses continue to create their financial reports and budgets manually. While working with data in Google Sheets or Excel may seem like a step up from paper recording, it still isn't your best option.
Problem #1 - The rise of errors
While some aspects of tracking financial information can be automated using tools like Google Sheets and Excel, it is incredibly easy for this process to go wrong. There's a reason why Microsoft has a full support page dedicated to detecting errors in Excel formulas.
Problems with source-data links, formula breaks, or transposition errors could lead to dramatically inaccurate final calculations or error values.
While an error message is relatively easy to notice, a faulty manually developed formula could return numbers that look legitimate — even though they aren't. Business executives could as a result obtain a very erroneous impression of the state of their company's finances.
Problem #2 - Steering away from data analytics
Due to the greater likelihood of errors in the manual-reporting process, those involved in reporting are frequently required to spend a significant amount of their time validating the data and ensuring that it is correct.
By taking away the opportunity to analyze financial information, businesses can miss out on crucial insights that would affect key decisions. Even while the data may be accurate, it cannot be used to its full potential without more in-depth analytics.
Problem #3 - Too much time and resources
Manual financial reporting places a heavy demand on your team's time and resources. Staff members are required to gather and input financial data from various platforms, and to validate that data to make sure it is accurate.
Team members frequently need to use various software programs to gather, manipulate, and present data, creating numerous touchpoints where errors could happen. Validation is therefore required at every step, from transferring data to an Excel spreadsheet to uploading it as part of a presentation.
It goes without saying that this can consume a lot of time that could be spent on more important duties, including examining what the financial data actually means for the health of your company as a whole. In fact, according to research from SmartSheet, "Nearly 70% of workers say the biggest opportunity of automation lies in reducing time wasted on repetitive work," with 55% specifically citing data collection as a productivity killer.
CloudPay said enough to manual reporting
CloudPay, an online payroll company, increased the accuracy, reliability, and granularity of their data by implementing Datarails’ FP&A solution, allowing them to invest in the company’s growth and receiving $2 million to develop a stronger payroll engine as a result of the board's increased confidence in their figures.
The budgeting and reporting processes at CloudPay, prior to using Datarails, were time-consuming, and the management and board lacked visibility and confidence in the financials.
Staying in control over the distribution of budget files was another challenge CloudPay encountered. They had many different versions and different formats, often riddled with errors. Any changes that needed addressing, such as resolving an error or updating a number, needed to be done manually on over a dozen spreadsheets, which were then to be manually shared with each department head.
Because of this, after Craig Morrow took over as head of FP&A at CloudPay, he made it his top priority to update the technology of the finance team as soon as possible.
The structure of the company was changing rapidly, and offline financial reporting methods just couldn’t keep up. There was no easy way to keep track of CloudPay’s financial data and no time to compare budgets to actuals or create forecasts.
CloudPay needed a solution that could bring together different types of data in order to streamline each financial process – and they needed it fast.
Datarails met those needs – and had the added benefit of enabling the finance team to continue using Excel.
“I compared other solutions too, but I didn’t really want to look at them anyway because most of them were all about replacing Excel instead of enhancing Excel,” said Morrow. “It’s almost impossible to replace Excel in an organization such as CloudPay. The beauty of Datarails is when I was training our budget holders on the system, everything looked familiar to them because they’re used to using Excel.”
The ease of use also made it easy for the company to adopt Datarails – and provided ROI from Day 1.
“The functionality within the solution is exactly what any FP&A professional should be looking for in a solution,” said Morrow. “The implementation was extremely efficient as you start to build out real-life business processes from the outset, which means you get a return on investment from Day 1.”
Having all the financial and operational information in one place also reduces the risk of inaccurate reporting, both by exposing discrepancies in data, and by providing the information necessary to account for them.
Financial reporting done better
Technology has made financial reporting more efficient than ever before, just like it has with so many other facets of conducting business. By taking advantage of automated tools and dashboards that incorporate real-time data, decision-makers can gain access to accurate, insightful information to guide the way they manage their finances.