Real-time financial reporting offers numerous advantages to businesses as compared to traditional reporting.
We know businesses often expect financial reporting to be done on a quarterly and annual basis. However, current industry and market changes can make even quarterly reporting obsolete very quickly.
Increased competition between businesses also requires more up-to-date data to allow company decision-makers to respond quickly to opportunities and threats.
Real-time accounting solves these requirements, but it needs innovative solutions FP&A solutions. Business process management, mobile devices, cloud computing, business intelligence, enterprise architecture, and enterprise application integration are useful tools in implementing real-time accounting.
Here are some common challenges faced by organizations when it comes to real-time data reporting.
Data Quality Problems
Data quality is a stumbling block to deploying real-time BI analytics. Because the purpose of real-time reporting is to enable quick decisions based on current data, data must be input correctly. When data is input incorrectly, a domino effect ensues, spreading incorrect information throughout the whole company database, not just one isolated spreadsheet. According to Gartner, the implications of erroneous data had a negative impact on corporate finances for 75% of organizations examined, with half incurring additional costs to reconcile the data. Poor data quality affects many parts of a company, not just one.
Having inaccurate data analysis and interpretation could throw off your overall business plan. As a result, it’s vital to have procedures to ensure that data is of the greatest possible quality.
Combining data from different sources
Although real-time financial reporting offers many benefits to businesses, it also comes with certain drawbacks due to the complexity and cost of implementation. Often, they are caused by problems with integrating their current data and ERP system into a real-time reporting tool.
Enabled real-time data gathering and presenting real-time dashboards to monitor several business processes can promote better decision-making.
But while the opportunity exists, generating accounting data can be a complex process that requires companies to devote significant time, attention, and financial resources to execute business processes in a structured way.
Fear of Cloud-based solutions
Cloud computing solutions offer many advantages for establishing real-time financial reporting. Performance Canvas, for example, is a cloud-based solution that addresses various concerns related to feasibility, scalability, and affordability. Cloud computing enables smartphones and laptops to access real-time financial insights and reports, eliminating the need for additional hardware.
Furthermore, cloud-based solutions make real-time reporting solutions more accessible to small and medium-sized businesses, which were previously only available to significant corporations with ample resources. Despite the wide acceptance of cloud-based solutions today, some companies are still wary of the cloud.
Some take issue with the security of their data, risk of state surveillance or intrusion depending on where the data center is located, and in general, the fear of not being in control. Luckily, most finance process automation solutions are now robust in their security, and there are third-party certifications to ensure security management and disaster recovery. It is just about making sure the companies do their due diligence when choosing a cloud vendor.
How PCF Can Help
Although real-time reporting has drawbacks, such as the time-consuming, complicated, and expensive work of implementing it, it also has benefits, such as providing timely and adaptable information to help business executives make strategic and timely decisions.
Real-time reporting provides organizations with the information they need to make swift choices.
Although there are considerable benefits to adopting real-time reporting, there are also significant risks to postponing real-time business intelligence insights. According to a McKinsey analysis, switching to digital can save European banks between 20 and 25% on costs. On the other hand, stalling digitization might compromise up to 30% of a bank’s earnings, leaving it vulnerable to other institutions eager to profit from digital data.
Real-time reporting solutions like Performance Canvas can be a sound investment, enabling organizations to provide timely insights throughout the company. Performance Canvas can help businesses adapt to an increasingly volatile market. Performance Canvas is part of a growing number of tech solutions designed to make financial budgeting, planning, and reporting in today’s times more straightforward and efficient.
Learn more about Performance Canvas today.
