Many companies use a variety of spreadsheets or home-grown applications to sort out, store, and manage their financial data. Either approach is very flexible and capable of doing almost anything. Unfortunately, that very flexibility makes it difficult to develop reusable reports or dashboards that provide the correct visibility into the business, and that are readily available.
When executives or auditors require information on the financial state of a company, getting that information usually entails a high-value resource with strong knowledge of the spreadsheets used to track this information and developing a custom, one-time report. Though this report can provide a great deal of intelligence on where the company stands, it typically requires time and effort to construct and often has limited reuse potential. Too, this report will often represent a snapshot in time; by the time the report is constructed, it is very possible that the financial picture has already changed.
In a dynamic or growing organization, it is critical that the right people have access to the right information at the right time. Creating a report from a spreadsheet is adequate when the CFO requests data regarding the current cash position or billed revenue remaining to be recognized. However, making critical information more broadly available to key personnel within a company can help motivate an organization to work as a unit toward a common goal. For example, it can be useful for divisional managers and senior executives to understand which divisions of a business are excelling in top-line growth and/or gross profit relative to others. Senior executives or regional managers benefit from knowing which regions of the country are experiencing the fastest growth in top-line revenue or margin, and which are lagging. It can also be extremely valuable for senior executives and executives in a service organization to see the backlog of billed or unbilled revenue to be recognized by project type, or even by the project itself, and the reasons for any delays.
Further, it is extremely difficult to construct automated interfaces between spreadsheets or homegrown systems and other systems within the organization. Customer Relationship Management (CRM), Professional Service Automation (PSA), and other systems that could and should automatically integrate and inter-operate with financial systems cannot be linked, making communication between systems a manual process – in other words, susceptible to human error – and removing the ability to get a real-time picture of the organization.
When information doesn’t flow smoothly between systems, it becomes impossible to gain a holistic understanding of corporate performance. Silos of understanding develop within the organization, decisions become localized, and it becomes extremely difficult for the CEO, CFO, or even other financial staff members to gain a clear understanding of their company’s performance. This loss of perspective can have serious consequences, as actions that may seem beneficial at the local level could have a negative impact on the organization as a whole.
As needs diversify, the number of people requiring access to data grows,
and the need for timely data increases, managing this via spreadsheets or homegrown systems becomes significantly less effective or comes at an exponentially growing cost and burden to the organization.
What’s the Answer?
In an organization with complex, high-volume financial processes, implementing a dedicated billing or revenue recognition solution is the best way to create data visibility and accessibility. Such systems are cost-effective and are able to produce real-time reports and dashboards that can be configured to “slice and dice” data in a myriad of ways, ensuring the right people have the right access to the data that will guide their decisions in real-time and creating substantial manpower savings. Strong integration between these and other systems also helps create a real-time, holistic view of your company’s financial health, opening the door to a wealth of new business opportunities.
For additional information about dedicated billing and revenue management systems and how they can simplify your accounting procedures and improve your company’s bottom line, download our recent white paper, “Improving Billing and Revenue Management: A Guide for Getting Off Spreadsheets.”