As can be deduced from its name itself, financial reporting is the reporting of all information relating to the financial transactions and its outcomes, for a specific period of business operations, to the business’ stakeholders – the management, the business investors, the creditors, and consumers.
Effective financial reporting is a critical step in which business accountants must work with a high level of accuracy. In order, however, that financial reporting would be sufficient, not only for the success of the business but also for compliance with law requirements, accountants must face the following challenges:
- Retrieving relevant documents
Business, over some time, conduct numerous financial transactions. In the conduct of financial reporting, accountants must be able to locate all reports about the company’s financial transactions. Corollary to this challenge is the fact that not all documents recording company financial transactions record all the necessary details needed to provide adequate financial reporting. It is critical, therefore, that all people involved in the commercial operations of the business should be able to record all details of their transactions needed for the conduct of financial reporting.
- Inability to produce all relevant documents in time
Most of the time, the Government sets a deadline for the passing of annual or quarterly financial reports. This fact brings out the challenge of providing the necessary documents in time for accountants to make a proper financial report. As a company deals with several financial transactions involving different people, it is often hard for accountants to compel all company members to produce all necessary documents in time sufficient to make a compelling financial report. The company must, therefore, be able to have an organizational system where accountants could quickly gain access to financial records already organized for financial reporting needs.
- Complex government regulatory requirements
In the regulation of business, the government demands from companies complex regulatory requirements, which may change from time to time. Some of these requirements are not among those that are not included in the financial records of the company. This makes it a challenge for accountants to comply with such conditions that the company’s financial reporting should consist of. Also, as these requirements would often change, accountants may not keep up with the changing and adding of regulatory requirements.
- Inability to master financial reporting software used by the company
Businesses have taken advantage of technological advancement to assist in their operations. However, as its employees are not of the same level of capability when it comes to technology, employees, most of the time, are not able to use software used by the company for their advantage and may even find it burdensome.
- Confidence that the financial report precisely reflects all business transactions of the company
Given the various business transactions of the company, it is a unique challenge for accountants to be able to ensure that what is in their financial reports precisely reflects all commercial operations of the company, including their outcomes.
To be able to meet all hurdles of effective financial reporting, accountants should be able to use financial managing software that can overcome all these challenges, and Performance Canvas Financials can help you.
Performance Canvas financials is a robust CPM solution offering to streamline, optimize, and automate your financial reporting, budgeting and planning, and financial consolidation. It is a cloud solution that has no trouble integrating with both an on-premises ERP system and a cloud-deployed ERP system. Visit www.performancecanvas.com for more information on how Performance Canvas Financials can assist you in your accounting needs.