Businesses today rely on data, and fortunately there’s no shortage of it. In fact, the amount of information processed by a single business unit now would have overwhelmed the largest enterprise just a few decades ago. Yet, 95 percent admit to being overwhelmed by data quantities at least some of the time, while 45 percent say not having the data they need is one of the greatest internal business threats they face, according to our recent State of Growth report.

So how can finance teams navigate a scenario in which they are overwhelmed by data volumes, but don’t have certainty about the validity of the data in front of them?

Enterprise Resource Planning (ERP) systems have become an essential tool for managing and organising business data by eliminating departmental data silos. While each department may only need access to a subset of data, bringing it all together within a single system provides a much richer view of the organization as a whole. However, not all systems are created equal.

With these factors in mind, here are five considerations for financial analytics and reporting success.

1. Are tools fit-for-purpose?

Spreadsheets are popular for reporting thanks to their ease of use, but they come with some significant limitations. Working with spreadsheets increases the risk of reporting errors. Changing a single formula in a widely distributed report can have significant consequences, causing recipients to question the accuracy of the underlying data. They are often seen as a poor choice for running analytics as spreadsheet-based reports are out of date almost as soon as they're created. To ensure accuracy, they must be updated frequently, which can increase version control issues and makes it more difficult to keep data in-sync. While spreadsheets may be a feasible option amongst small, early-stage businesses, there are a multitude of ERP options to overcome reliance on them as operations grow and there is more data to manage.

2. Is data accessible?

The ability to combine data elements in unique ways is one of the great benefits to having the right tools in place. For example, having access to the right tools would allow you to bring together financial, production and organisational data to evaluate the cost of producing a given product at one location versus another. However, this may not be possible if your business is using separate systems or spreadsheets, or even the wrong ERP system. For instance, your analytics solution may only have access to financial data, but not project management details because the two modules have different architectures.

An ERP system with a single database makes it easy to provide centralised access to data from different departments. If information is being captured within the system, it will easily become available for different teams to analyse and draw insights from.

3. Are reports flexible?

ERP and accounting software providers usually offer an array of pre-formatted reporting templates that can be used to create financial statements and other standard reports. This helps save time and money by eliminating the need to create frequently used reports from scratch.

However, a format that works for one company doesn't necessarily work for others. Having a set of predefined reports can be useful, but financial statements, for instance, need to be easily tailored by employees to present data in various ways for different stakeholders. For example, business leaders may be satisfied with a summarised income statement, but departmental heads could require more detailed information. More often than not, changing the layout or including additional data elements on a report can be complex and time-consuming.

Creating ad-hoc reports traditionally required a level of technical expertise that few staff possessed, but modern ERP systems offer flexibility that can help overcome the labour-intense ways of manipulating data into certain formats.

4. Is your KPI monitoring restricted?

Key performance indicators (KPIs) allow managers to see how their team is performing against objectives, helping organisations focus on achieving specific goals and informing everyone if performance is falling below targets. You can't manage what you can't measure, so having the right KPIs is essential.

Most software packages come with industry specific KPIs built-in, but to be effective, KPIs must be matched to the specific business model and objectives of the company by the users themselves. No two organisations are the same, and some software providers overlook this, assuming that a handful of standard KPIs are all that any business needs. The right system will allow for a level of flexibility that ensures everyone in the organisation is working towards the same objectives.

5. Can dashboards be tailored?

Linked to these KPIs are dashboards, which play an important role in giving employees visibility into the organisation’s goals, while linking KPIs to what they can control in their specific role. In addition to displaying KPIs, they help individuals stay focused by alerting them to issues that need to be addressed or tasks that need completion.  

However, dashboards that are one-dimensional are often more of a hindrance than a help and are unlikely to provide insights and efficiencies to help respond to business needs. Fortunately, when used correctly, dashboards can increase efficiency by making it easy to access important information straight away, so time isn't wasted searching for reports or frequently used features. This also eliminates users being overwhelmed or bombarded by irrelevant data outside of their job requirements.

Is it time to up your financial analytics and reporting game?

To take full advantage of data, companies need analytics that add business value and reporting that is meaningful and insightful. While many software providers offer these tools, not all systems are created equal. Choosing the wrong solution that has isolated data and is not easy for employees to quickly make changes themselves, can severely limit an organisation's ability to take advantage of their data. Alternatively, selecting the right solution will deliver a level of flexibility and reassurance that the right data is getting to the right people, at the right time. Ask yourself these five questions to see if there is room for improvement.