With several departments generating their own numbers using their own complex Excel formulas, it’s no wonder that small- and medium-sized businesses (SMBs) often struggle with finding a single clear version of the truth.
Who has the right numbers? Nobody knows!
The ability to communicate accurate financial data to lenders and stakeholders is critical. But how do you know which version of the truth to rely on? Excel and require manual actions, which can create issues and can be error-prone. They also can’t capture the discussions between managers about the results of reports. Nor do they contain automatic alarms that trigger management actions based on a threshold.
In order to achieve a single version of truth and process high-quality reporting actions, SMBs absolutely must use
financial accounting software. It’s only with powerful tools like this that an entire company has full confidence in the numbers.
Here are five additional reasons why financial accounting software
is the best way to generate financial reports for your company.
- The reports are more sophisticated: When it comes to tracking and monitoring the financial aspects of your business, it’s possible to combine several spreadsheets with complex formulas and produce information. But this can be difficult and error-prone. With financial accounting software, SMBs run reports about every aspect of the business, including the future. As a rule, the most important report for most SMBs is a reliable cash flow statement. Without this, it’s difficult for SMBs to know if and when they’ll run out of money. In addition to cash flow reports, here are the most common reports that SMBs need:
- Profit and loss: This report contains current month actuals, last month, last month prior year, budget, year-to-date and other common numbers.
- Key performance indicator scorecard: This report displays your top metrics, including sales numbers, inventory or whatever figures are critical to your business.
- Balance sheet
- Top 50 sales transactions for the month
- Payables report showing the largest payments made that month
- Receivables report showing outstanding bills