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Hey CEO! Do you know your financial results already?
- Helen Veetamm
Today is the 6th of April. March is over! Do you already have the results from March? Was it a good month? You don’t know yet? When will you know? From my experience as an auditor and in my current job in a financial reporting software firm, I’ve discovered that there are roughly two types of companies — those who report with a minimum of 2–3 month delay and those who report within two weeks maximum since the period end. It doesn’t depend on the company size or business sector. Some say that it’s not possible to fasten the reporting process, yet some companies have managed to do so. What does it depend on then and how can you make your business decisions on more actual data?
Don’t blame your financial personnel on late reporting. Although sometimes it’s a human factor, usually it’s not. Ask your accountants what are they doing, how are they doing and what takes the time in the process. That’s how you spot the ineffectiveness and parts to improve. Today’s technology and solutions allow automating a lot to decrease manual work and give extra time for more valuable tasks. There are definitely suitable solutions for your financial reporting weaknesses as well. Take the advantage of technology development. If your accountants don’t know that something can be done differently or just don’t have time to search for a solution, nothing is changing. Be the leader to them or buy a service or hire a leader to guide the way to changes and inspire them. Of course, there will be additional expenses, but these will also be present if you are doing late decisions on late financials.
It’s true that your financials can be either very accurate or very quickly reported. You have to find and set the golden mean. Probably you’ve heard from your accountants that financials are not ready yet as they are waiting for some calculations or invoices or bonuses. For a proper accountant, every number is important. For general financial overview and decisions, some missing invoices don’t change the picture that much. First, you can use provisions — use previous information and experience to predict the missing numbers. Secondly, set the levels of significance and due dates for inner and outer reporting. Be sure to communicate these with financial personnel clearly. And help them to make the changes.
Way of thinking
Actually, it’s the main reason. Either from you or your accountants. If someone feels or thinks that it’s not possible to get more or less final financials within two weeks after period end, then it won’t be possible. There are simple reasons why people think or feel so. First two of them are resources and accuracy — the very same from previous paragraphs. Another one is fear — fear of changes, fear of additional tasks, fear of being unnecessary etc. From CEO’s side, the reasons can be disinterest or misguided opinions.
It’s easy to say that to change the world you have to start with yourself, but it’s true. It is the same way with faster reporting process — think what can you do and how to improve it to have your information ready when you need it. I’ve seen the changes in practice — it is possible to have the results of March by the 6th of April.