The timely production of financial information is a key issue for growing companies. Are your financial statements up to date?
The growth of a business requires the entrepreneur to deal with several decisions involving the expansion into a new territory: hiring additional labour, investing in new machinery and many other strategic decisions.
Producing financial information more quickly
Generally, financial statements should be produced no later than the 10th day of the following month. As financial reports present the past situation, shortening the production time allows the business to benefit from proactive financial management.
Several factors can accelerate the production of financial information, while ensuring that it is complete, relevant and free from material misstatements.
First of all, the company must define its business processes, that is, the flow of activities to achieve the desired result.
This exercise then allows management and the employees to understand the interactions between each activity, as well as their role and responsibilities within the company.
This first step determines the information required to complete the financial statements and identifies the person responsible for producing this information.
The entity must then determine its information needs, that is, the information it wants to obtain in order to quickly evaluate its performance.
Financial reports should prioritize relevant financial information for decision-making regarding financial statements, sales projections, cash flow monitoring, etc.
Pre-identifying information needs eliminates the time wasted in producing reports that management does not consult.
Technologies and developing skills
In addition, the company must ensure that the employees in charge of the financial information production process have the necessary training and experience to effectively carry out their duties.
Technological changes often require professional development. These training courses can optimize the use of accounting software or encourage the use of various automated tools (such as Excel), thus reducing information processing time.
Lastly, since financial information must be produced quickly, it is important to implement effective internal controls to minimize the risk of error or fraud.
Once this process is completed, the company will be able to accelerate the production of its financial statements and benefit from an efficient administrative team. These factors will allow it to improve its financial situation analysis in order to make informed business decisions.
This article was written in collaboration with Kamille Lambert.
17 Oct 2019 | Written by :