3 Reasons Your Organization should be Automating Financial Reports

Illumeo Customer Success's Profile

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Finance and accounting professionals frequently build separate reporting worksheets for each month of the year, which make consolidated reporting difficult and can be cumbersome to revise. That’s why many finance and accounting departments turn to financial reporting automation. Not only does it make consolidated reporting easier, it provides additional benefits like improved accuracy and faster preparation, which lead to organizations saving time and money as well as improving the audit trail.

1. Automated reports are more accurate

When multiple people in multiple departments, the odds of errors or mistakes creeping in go up exponentially prepare reports. Manual reports are touched by many employees, and each one has the opportunity to make an error. Sometimes that’s hard coding over a formula or transposing a number or two. Whatever the reason, manual reports – especially those prepared in Excel – are likely to have errors. Some studies have found that nearly 88% of all spreadsheets have some sort of error in them.

Limiting the number of people involved in creating reports is one way automation improves accuracy. But the real reason automated reports are more accurate is that they link to original source data as much as possible. That means the reports are being created directly from the data instead of being filtered through human hands.

2. Automated reports are prepared faster

Whether your organization uses carefully prepared Excel templates or invests in accounting software, automated financial reports are prepared faster than manual reports.

Why? Manually creating reports is time-consuming for the employee creating the report, time consuming for the person consolidating reports, and often time consuming for the person reviewing the reports because there are mistakes more often than not.

Automated reports save time for everyone involved in the process. Reports are prepared faster by pulling data directly from the source, plus they are prepared in a uniform way, which makes consolidation much easier, and they are more accurate so there are fewer errors to correct. All that time saved can by put to good use by your employees to work on other tasks they’ve had to set aside while they prepared reports.

3. Automated reports leave a well-documented audit trail

It can be difficult to track the audit trail when organizations manually prepare reports. With so many employees involved, it can be nearly impossible to tell who made what change. If you face an audit, that can be a nightmare.

With financial statement automation, the audit trail is much smoother. Different versions can be accessed easily, revealing who made what change. This allows an auditor to understand the process and determine if everything is being done properly.

Of course, we all know that time is money, so the fact that automated reports save time naturally saves your organization money. Add in the fact that reducing errors and improving accuracy leaves your organization open to less risk? Even better. 

If you'd like to learn more, consider this great course on Automating Financial Reporting with Excel.