Improving financial reporting processes may not rank highly on many people’s lists of New Year’s resolutions. They might fall somewhere in between “go to the gym more” and “clean out the closet.” (And some of us may rather clean out the closet!) But if you play a role in financial reporting for your business, it’s probably wise to spend some time assessing your current financial accounting and reporting practices, then planning ways to improve them in 2019 and beyond
That’s true no matter how good your current financial reporting process is, so no one is off the hook for this particular New Year’s resolution. Embracing continuous improvement is essential for staying competitive in today’s business environment, and you should never settle for the status quo. Fortunately, there are some strategies that you can leverage right now to streamline your 2019 financial planning.
Continuous Financial Planning
Speaking of continuity, making your financial reporting and accounting processes continuous is one smart step you can take in 2019 to improve financial planning.
In this context, continuous means that reporting and accounting occur on an everyday, ongoing basis, rather than happening as one-off or ad hoc processes.
This strategy may seem counter-intuitive. You typically only deliver financial reports on a periodic basis, so it may seem best to prepare them according to the same rhythm. But by collecting financial data and merging it into reports on a continuous basis, you ensure that you have instant visibility into financial issues as they arise. You don’t want to wait for the next report cycle to discover that one of your departments has exhausted its annual budget a half-year early, or that a major client has delayed payment and created potential cashflow problems.
Compare Theory to Reality
At most businesses, financial reporting and accounting processes look entirely different in theory than they do in practice. In theory, you invoice on a regular schedule, always receive payment within a set period, and spend money according to budgets that were prepared well in advance.
In reality, of course, payment and invoicing details are often missed, and budgets may not be followed.
Unless you work for a particularly well-run company, you’ll probably never get the reality of financial planning to reflect theory. But you can at least assess the extent to which reality diverges from theory, and adjust your financial planning processes accordingly. Maybe you need to build more flexibility into reporting and accounting in 2019 to reflect the sometimes-tumultuous reality of your financial processes.
Reassess Your Stakeholders
Just as it is easy for financial planning theory to go out of sync with reality, it is common for companies to end up with a warped view of who their financial planning stakeholders really are. One department or certain individual(s) might play an essential role in reporting and accounting; as a result, only those people have access to financial planning tools and information.
As 2019 approaches, step back and think about who you currently identify as the key stakeholders in your financial planning processes and consider whether you are leaving anyone out. Have any departments been reorganized in ways that add or remove stakeholders? Have relevant job roles been created or removed? Are the people who are theoretically responsible for driving financial accounting and reporting the best ones to remain in charge?
Destroy Accounting and Reporting Silos
Breaking down so-called silos has become an important mantra in the world of IT, where the focus has shifted in recent years to making sure that different teams collaborate seamlessly instead of having each team devoted to a specific task and paying little attention to what other teams are doing.
The same logic can be valuable within the context of financial accounting and reporting. In a company of any size, multiple individuals and groups must report data in order to make financial planning work. If each of those people or groups currently operates in a silo with little visibility into what others are doing or the state of their accounts, you risk your teams falling out of sync or failing to report critical information promptly.
So, one goal you might set for 2019 is to remove your teams from their various financial-planning silos and ensure that everyone has visibility into financial planning. This does not mean that every small financial reporting activity has to be shared with the entire organization, but that at a high level, everyone has a basic understanding of what others are doing for reporting and accounting on an ongoing basis.
In the world of financial planning, continuous improvement should be a priority. No matter how well your company is doing with financial planning today, you can be even better in 2019.
Click here to find the right tool to drive that continuous improvement by delivering detailed, flexible, continuous visibility into your business processes.