It’s not uncommon to wear several hats at a small business. With limited resources on hand, you simply have to get stuck in to handle the wide range of daily operational demands. While this works for many business tasks, one area where you’ll want to invest in expertise is the finances.
Unfortunately, that’s quite a feat when resources are finite and the workforce limited – having a dedicated accounts manager simply isn’t plausible for many SMEs.
Luckily, technology can help. But before we explore how financial reporting automation can help you, let’s start with the basics.
What is Financial Reporting?
Financial reporting is the process of collecting, handling, and analysing financial data to provide detailed reports about business performance. It provides critical information about how your company is growing and is invaluable when making business decisions or reviewing investment strategies.
The process of creating reports is inherently time-consuming, however, and is prone to human errors. Something as simple as a single decimal point misplaced within a spreadsheet can make the whole thing completely inaccurate.
Challenges of financial reporting for an SME
Several challenges lie between a business and effective financial reporting. The specifics will differ from business to business, of course, but many will recognise some of the following issues:
- Incredibly resource-intensive process
- Requires specific knowledge and skills
- Difficult to maintain datasets as time goes on
- Demands accurate data collection and handling business-wide
Thanks to modern advances in artificial intelligence, small businesses now have access to powerful tools that can mitigate these challenges. Let’s dive in.
Financial Reporting Automation Explained
Financial reporting automation is the process of taking your reporting obligations and offloading them to an automation platform. These robust tools are capable of handling complex datasets and turning them into usable reports about the performance of your business.
Financial management tools are designed for this specific purpose, meaning they come with a host of invaluable features. They can maintain historical records with pinpoint accuracy, assist in any audits or investigations, and provide machine learning based analysis into your company’s operations.
Benefits of financial reporting automation
The true power of advanced AI tools will reveal itself over time, but the immediate benefits of integrated business planning should be felt by any small business. Some of the key benefits include:
- Handles key financial reporting tasks autonomously
- Can collect, organise, and maintain complex sets of financial data without input
- Integrates into many popular business tools, including many legacy platforms
- Saves time, money, and resources business-wide
Automation is great at helping small businesses punch above their weight. It can help save precious resources, letting them be invested elsewhere. Plus, it’s great for bridging a knowledge gap that could previously only be filled by industry experts, especially if you add detailed courses to your employee training software. But as spectacular as the technological leap is, you still have to know how to engage with them to scale your business.
How Financial Reporting Automation Can Scale Your Business
Done correctly, automated financial reporting and management can be a key part of growing your brand. From financial planning support to enterprise-level data manipulation, the possibilities are (almost) endless. But it takes the right mindset and approach to get the most out of it.
- Identify the most impactful processes to automate
While there are a huge number of processes that can be automated in any business, it’s important to understand where in the financial management process you need help most. Wherever the biggest bottlenecks lie, start there.
Some of the processes that will be typically automated include:
- Financial statements
- Cash flow information
- Management reporting
- Financial statement analysis
- Budgeting and forecasting
- Historical comparison and analysis
You can even go beyond this, using solutions such as AI meeting notes or automatic invoice reminders to improve your financial processes.
One immediate benefit of this is that it’s likely to flag up some places you’re losing money that you might have forgotten about. This might be something small, like a subscription to a digital business card maker that you don’t use any more. Or it could be much bigger – for instance, are you paying peak delivery prices for getting new stock at weekends?
- Choose tools that work for you
There’s a huge range of third-party tools available to automate your financial reporting. While many offer a similar feature set, it is important to take your time and review which works best for your specific needs. Make sure to check for strong security methods, such as two factor authentication (2FA) and role-based permissions.
Consider your current infrastructure and what integrations would be most beneficial. Can it record and pull information from business phone records or your restaurant POS system? Will it provide insights into stock management and where money is being wasted? Are there industry specific financial regulations you need to meet, and can it help with that?
Some of these features might seem outside the purview of a reporting tool, but many are providing one-stop solutions. If you’re looking to scale, it’s worth planning ahead rather than needing to add other software further down the line.
- Leverage AI to analyse financial trends
Using AI tools effectively is one of the best practices for implementing a rolling forecast. They can collect information from all your data sources and look for patterns and trends over time.
Whether this is identifying hefty outgoings that could be optimised or showcasing departments or products that are underperforming, these insights can be the keys to unlocking growth. For example, you could find out that it is financially sensible to buy business leads as they drive higher-value clients and convert more consistently. Be ready to act on these findings and make agile changes to both capitalise on areas of strength and shut down weaknesses.
The Next Steps
Financial reporting is a necessary part of any business, but it doesn’t have to be the millstone many small businesses feel it is. Automated tools can take on the heavy load of a growing financial profile and seamlessly deliver timely reports on business performance for everyone to use.
Part of the power of these tools lies in a company’s willingness to engage with it, however. Be sure to give it your all. Automated reporting is the path to quicker growth and confidence in your business’s financial position. Why wait?
