Here’s Why 89% of Finance Professionals Are Unhappy and How You Can Fix It
Ask any craftsman the secret to excellence, and you will most likely hear that, in addition to expertise, the craftsman requires the right tools for the job.
The same is true for finance teams working on operational reporting. Even the most skilled finance professionals require the right tools to complete their tasks well.
In this blog, we'll discuss a Hanover Research study that looked at which technologies finance professionals use the most for operational reporting and how they feel about them. According to their survey of over 500 finance decision-makers from various industries throughout the world, 89 percent of finance professionals are dissatisfied with the operational reporting tools they utilize. Only 23% of companies can produce all of the essential operational reports required.
An Overview of Operational Reporting
Operational reporting, often known as business reporting, provides vital business insight to decision-makers across the enterprise. These reports concentrate on short-term realities and draw on low-level data from multiple business systems to provide a clear and succinct view of daily operations.
Finance teams produce a variety of operational reports for various departments within the organization. Although finance and accounting are the most frequent users of these reports, the following are some of the other top departments that use operational reporting on a regular basis:
Due to the nature of operational reporting, finance professionals find themselves creating many operational reports on a recurring basis. Half of the financial decision-makers produce recurring reports at least once a week, and 12% of survey respondents create reports on a daily basis.
Among the recurring reports requested, finance teams most often cite accounts receivable aging, accounts payable aging, and daily cash flow tracking as the top three most common recurring reports.
Each of these reports has its own set of obstacles, but product expense by category, weekly forecasting, and revenue trends were identified as being the most difficult to produce.
Operational Reporting Tools
According to their survey respondents, the three most common tools used for operational reporting are:
Microsoft Power BI
Native ERP reporting tools
All of these tools are great at the tasks for which they were designed. However, for operational reporting, each leaves something to be desired. Although 76 percent of financial professionals use Microsoft Excel for their jobs, operational reporting with spreadsheets entails manually copying and pasting data from source systems into the spreadsheet, manipulating it, and repeating the process whenever the data in the source system changes.
Microsoft Power BI is used by 45% of respondents for operational reporting, although it comes with its own set of issues. Using Microsoft Power BI to create operational reports necessitates a high level of technical expertise and an investment in a data warehouse to transform data into an optimal format for operational reporting, which reduces the data's immediacy and makes it more difficult to drill into transactional data to answer follow-up questions.
For the 30% of respondents that use native ERP tools, the limitations of the tools often force finance professionals to resort to manual copying and pasting into a spreadsheet for analysis and presentation, which takes significant time and effort and increases the possibility of human error.
For these and other reasons, 89% of finance professionals are dissatisfied with their current reporting tools.
These tools are all great tools for their intended purpose. But don't forget about the craftsman we stated at the start. A tool must be utilized for its intended function if it is to be used correctly. None of the mentioned above tools are specifically designed for operational reporting. That's where the issue starts.
Why are 89% of Finance Professionals Unhappy?
When asked about the issues they have with operational reporting, 23% of participants said the systems they use aren't built to handle financial data.
What does that mean in practical terms? Finance data has inherent dimensionality and typically has to be flattened into two dimensions for consumption by standard business intelligence tools. This necessitates finance teams to manually move the relevant data into a platform that allows them to alter and present the data in an understandable way. This could entail putting data into a data warehouse. In this scenario, producing reports becomes a time-intensive, demanding task. Furthermore, when you create a report in this manner, the data is no longer linked to the source system, resulting in a report that is out of date as soon as it is created.
Finance teams can't produce real-time reports or drill down into the minute details that matter for operational reporting if they don't have a live link to source data.
To make matters more difficult, several of the tools employed need advanced technical expertise, resulting in a reliance on IT. Considering the sheer volume and velocity of operational reports required, dependence on IT makes timely report generation out of reach for many organizations.
The Solution for Operational Reporting
What can finance teams take away from this? Finance departments must clearly consider their financial reporting options carefully. To address the most prevalent issues, finance executives should look for technologies that:
Allow non-technical users to easily create reports.
Automate recurring reporting.
Allow users to drill down to a granular transactional level.
Enable real-time access to source data from existing business systems.
Are purpose-built to handle financial data.