The reporting cycle can be a stressful time. No matter how well executed, any last-minute surprises can send you and the team back to the drawing board. We discuss how to avoid these and minimize their impact in the article below.
The reporting cycle is the time of the year, often more than one, in which presentations must be given to stakeholders. It involves preparing and analyzing both financial information and other sources. For a Chief Financial Officer, this can be one of the most stressful work-related events they will endure, especially when last-minute surprises are in store. So how can you avoid them?
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Why Is Accurate Reporting Essential?
In both small and large businesses, accurate reporting for finances and other matters is essential. Not only do they allow owners to make decisions based on long-term goals, but they also allow them to be conveyed to stakeholders with evidence that is backed up. They can provide a look into everything from efficiency to profitability and liquidity. By understanding the money coming in and out, companies can plan their upcoming expenses and any investment capital they need.
Reporting is also like an interim business plan. It can flag up any issues, showing both strengths and weaknesses. They should be used to inform decision-making and should always be taken at face value. Never should a report be made to look better than it actually is, as at some point it will come undone.
Have Clear Goals and Objectives
When the reporting cycle approaches, it helps to know exactly what your goals are. This may be to predict upcoming finances and income, or it may be for something else like growth. If you are combining them, you may need to break them down into separate areas.
All of these goals should follow the SMART protocol, no matter how simple it is and no matter how lofty or ambitious your reporting cycle may be. If you do this at the start, it helps minimize the surprises that may crop up. SMART targets are: Specific, Measurable, Achievable, Relevant, and time-based. It is also a good idea to enclose these in any reporting you may attempt.
Ensure You Have Internal Systems in Place
Your internal system is the procedures an organization goes through every day, week, month and year that keep it running. When you have clear systems in place, then everything is mapped and recorded. Issues are flagged and can be addressed. This means you are likely to get fewer surprises when the reporting cycle deadline arrives.
A perfect example of this is getting the month end checklist watertight. This helps keep track of incoming and outgoing funds, and spending and helps reconcile accounts more regularly. With this comes accurate and up-to-date financial records, allowing you to make better decisions and to be more accurate when reporting comes. It can also help to identify areas of improvement.
Meet Reviewers Ahead of Schedule
The final reviewer is the person who signs off the final completed report. When they decide to make changes right at the end, it can mean going back and altering a range of things. This takes time and adds pressure. This can further impact other reports that have been using the original report itself, causing waves across the organization.
If you can manage to establish a meeting ahead of time, these changes can be nipped in the bud. They can be made as the report is in process. This means that everyone is part of the process, with no going back to change small issues or wording that may cause ripples and add to the workload.
Run Scenarios
Getting the true top-line figure for the next cycle is almost impossible. You can not predict many of the things that will come your way, such is the nature of finance. However, there are many you can see coming that will help you get a more accurate top line. This will take time and effort, looking at post and past revenue performance and running multiple scenarios.
In economic climates like this one, your stakeholders will understand the level of unpredictability you have to work with. The actions of the Fed, the government, and the global economy are all in the air. You can use these differing possible outcomes either to get a middle ground or present the differing scenarios are a series of options.
By implementing these strategies, you should be able to minimize many of the surprises that can occur. There will be betimes this is impossible. New challenges will always crop up, and goals for reporting will change. It is not uncommon to have reporting thrust on you out of the blue either. With these factors in place, you are sure to have a much better chance of getting through them with accuracy and efficiency.
