If your finance team is pasting enterprise resource planning (ERP) data into Excel and then manually crunching figures for your firm’s financial reporting, it may be time to consider a software solution.
If you haven’t recently audited how much time it takes your team to create a financial report, this may be the right moment to look into it.
Another sign you may need to add financial reporting software to your tech stack is if you can identify gaps between what your business intelligence tools provide and your team’s reporting needs.
In today’s business environment, Finance needs to be agile enough to easily switch between gathering and analyzing high-level data and drilling down all the way to the transaction level. Some examples:
- Reconciling accounts or identifying variances by examining balances, journals and ledger transactions, while also being able to see updated posted adjustments.
- Searches that span multiple entities to identify things like discounts for on-time payments, while also deciding where to focus collections efforts for A/R, and
- Cash flow forecasting and reporting on a daily or weekly basis, while also generating custom aging reports to identify customers who are credit risks for being late payers and/or owing large amounts.
Once you and IT are on the same page about the feasibility of modernizing your financial reporting, here are some important search criteria, and questions to ask potential vendors, according to financial reporting and enterprise performance management software provider insightsoftware.
Ease of access to timely financial reporting data
The more time that’s spent creating reports because of manual effort, the less time there is for analysis, and the greater the risk that your data’s outdated or inaccurate.
Direct, real-time connection to order-to-cash and procure-to-pay data – even across multiple ERP modules – is possible, providing a level of visibility that leads to a speedier and more accurate month-end closing process.
Key vendor questions:
- How does your product provide live, synchronous access to ERP data?
- How often is ERP data refreshed in your solution?
- What ERP modules does the tool allow me to report against?
How granular you need to get
The data behind the financial reporting numbers can inform critical business decisions. However, the native reporting tools within ERP systems can make reconciliation and validating adjustment entries more labor intensive, leading to potentially costly lag time between data reporting and decision making.
Software that’s designed specifically for financial reporting should make it easier to identify discrepancies, simplify reconciliations and intuitively drill into data without needing to switch tools.
Key vendor questions:
- Can my people drill down directly from a summary to view transactional details?
- How easy is it to toggle from the summary to the detail level?
- Is the data I need visible in a format that my team can understand and work with?
- Are transactional images and documents viewable from within reports using your solution?
- Can your product generate custom reports to respond to specific requests (give a real-life example)?
Your connectivity needs
Like a lot of companies, you probably have critical data stored across billing and customer management applications, spreadsheets and other external systems that can’t connect to each other for financial reporting purposes.
Best-in-class financial reporting software connects directly to your ERP and pulls in data from external data sources. This empowers Finance with a more centralized source of truth, as well as continuous access to both current and historical data.
Key vendor questions:
- Are all my critical data sources compatible with your software?
- How many data sources can your software connect to?
- Is there an additional charge for connecting to more than one data source?
Implementation and ROI
Any tech that’s too expensive (and hurts the bottom line) or too time-consuming (which hurts morale) for your organization isn’t worth it.
It’s essential to get a feel for how long it’ll take a new financial reporting software investment to realize value.
And the vendor rep can brag about how the actual installation only takes a few minutes, but that doesn’t include the all-important behind-the-scenes work necessary to connect your data sources, align with other departments, and find a date and time when your IT team can perform the install.
The software you choose should require minimal preparation before the installation, little or no IT involvement during implementation and technical support that you can be confident about.
Key vendor questions:
- How long is your implementation process?
- What level of technical support do you offer with installation?
- What training options do you provide for new users?
- On average, how long does it take for end users to begin creating their own reports?
- On average, how soon do your clients start to see a return on their investment?
Potential make-or-break questions
If you’re down to three finalists, the answers to these questions might help you narrow it down to one:
- Can end users create and modify their own reports even if they don’t have advanced technical skills (give a real-life example of someone in your organization)?
- Does your solution offer automated reporting and distribution?
