Agile Financial Reporting: Enabling Timely and Accurate Decision Making

Can you imagine having to do all your sums in your head rather than using a calculator? Okay, you CAN do this and some people enjoy it — most of the time. But it’s nice to have the option and for consistently accurate information, a calculator is a no-brainer! 

In today's fast-paced business environment, organisations need to have timely and accurate financial information to make informed decisions, but traditional financial reporting processes often mean delays, inconsistencies, and manual errors, leading to less than brilliant decision-making.   

To address these challenges and enable better, more efficient decision-making, finance departments can adopt agile practices. Agile financial reporting involves leveraging technology, automation, and collaboration to deliver timely and accurate financial information to stakeholders, enabling them to make data-driven decisions. 

Let’s explore how agile financial reporting can enable finance departments to deliver value-added insights and support more effective decision-making.  

Technology & automation  

Manual financial reporting processes are time-consuming, error-prone, and often result in delays in delivering key financial information to stakeholders. Agile finance departments leverage technology solutions, such as financial consolidation software, data visualisation tools and cloud-based reporting platforms to automate repetitive tasks, streamline processes and accelerate financial reporting cycles.  

Automation reduces the risk of manual errors and enables finance departments to provide stakeholders with the information they need when they need it, allowing them to make better-informed decisions, more efficiently. 

Example 1  

Too many finance departments waste time copying and pasting information from one system or application to the next — from accounting systems into Excel, then from Excel to PowerPoint. Then something changes just before they are about to present. Then the formatting doesn’t look right. There is too much focus on the irrelevant rather than thinking how best to help the organisation interpret the data to move forward.

Coach and author of ‘The Inner Game of Work’, Tim Gallwey, talks about ‘critical variables’ – the elements of any situation which matter, as opposed to those that don’t. The critical variables are not always the obvious ones and the method of defining them can produce some valuable insights as well as providing guidance on how to move forward. 

Using this method, it becomes clear that rather than using the copy/paste approach, it is better to simply grant stakeholders access to the systems which generate the data.  

Real-time and self-service reporting  

Another important agile finance practice is the use of real-time and self-service reporting. Traditional financial reporting processes often rely on batch processing and static reports, which can result in outdated and inconsistent information. Agile finance departments leverage real-time data from multiple sources and enable self-service reporting for stakeholders, allowing them to access up-to-date financial information on demand.   

Real-time and self-service reporting empower stakeholders to analyse financial data, generate insights and make informed decisions in a timely manner, without relying on finance departments for every report or query. This promotes agility in decision-making and reduces the burden on finance departments to produce ad-hoc reports, allowing them to focus instead on value-added analysis and strategic support.  

Collaboration  

Collaboration is also a key agile practice in financial reporting. Agile finance departments foster collaboration among stakeholders, including finance team members, business units, and senior management, to ensure alignment and accuracy in financial reporting. Collaborative financial reporting involves regular communication, feedback and review among stakeholders, ensuring that everyone has a shared understanding of financial performance and objectives. 

Agile finance departments also establish clear roles and responsibilities for financial reporting and provide training and support to stakeholders to enable them to effectively contribute to the reporting process. Collaboration in financial reporting promotes transparency, accountability, and accuracy, enabling stakeholders to have a holistic view of financial performance and make informed decisions.  

Example 2 

Does the person for whom we’re preparing the report always ask for more analysis and charts without removing any data and graphs they are no longer interested in?   

I once worked for an executive who seemed to have nothing better to do than inventing different ways of looking at data and finding different data sets to look at.    

He would ask: “How many people have joined the Ambassador program?   
It was around 100.  
Then: “Could we have a cumulative graph showing the dates they signed up?”  
Er...okay..  
Then he would enquire: “Could we have a heat map of where they are located around the world and could we now overlay how active they are?”   

Well, I thought, I guess we could, but that would take time, and in the meantime what matters is that we need to focus on the people in this region, which is where we are currently rolling out the system. When we get to the next region we will see if we have enough people, and if not, we can either recruit more or use the people from the previous region to support us!  

Exercise  

Now that we are getting good at monitoring how long things take to complete, let’s begin to monitor how much new information we are being asked to provide with each passing iteration. Does it feel like every month we add one or more pages to the slide deck?  

Could we ask which data sets are no longer being looked at? Could we agree that for every new piece of information, we must stop reporting on something?  

As a stretch goal, we could say that we will remove two or three pieces of data for every new request.  

Just how lean could our reporting be? What data actually adds value to the decision-making? 
Let’s try experimenting by removing information, or even by starting again from scratch. 
All this is done without reducing accuracy or increasing risk...  

Accuracy & integrity without late nights!

Agile finance departments also prioritise data accuracy and integrity in their financial reporting practices. Data quality is critical for accurate financial reporting, and, as discussed, traditional processes may suffer from data inconsistencies, errors, and redundancies. 

Firstly, use the tools!

Agile finance departments implement data governance practices, such as data validation, data cleansing and data reconciliation to ensure that financial data is accurate, consistent, and reliable. They also establish data ownership and data stewardship roles to ensure that data is managed effectively throughout the reporting process. Data accuracy and integrity enable finance departments to deliver reliable financial information to stakeholders, supporting their decision-making process. 

Secondly, let’s use our brains – how accurate is ‘accurate’?  

Almost my entire career as an accountant was spent finding rounding errors. If only I knew then what I know now! 

As we prepare our month-end, quarter-end or year-end reports, how much time do we spend trying to get rid of those rounding errors? We have all sat through too many reviews where the focus is on why, on one slide, an item shows as £200.1m and in the next slide the same item shows as £200.2m. 
We get fixated on something that is irrelevant and not material, rather than looking at what the data is telling us about the best next steps we should take.   

Can you guess how much time it takes to get to the material numbers? How much time do you think we spend searching for the non-material ‘errors’? 
How much extra value was added by this extra level of accuracy? 
What about the cost of the extra time spent? 
Finally, how do you think the team’s brains could be used to add value to the organisation with the time saved by not focussing on the non-material? 

Driving organisational success  

In summary, agility in the finance department is essential for organisations to thrive in today's fast-paced business environment. By adopting agile practices in financial planning and analysis, financial operations, and financial reporting, finance departments can become strategic partners to the broader organisation, delivering timely and accurate financial insights, supporting effective decision-making, and driving organisational success. 

Through a collaborative and adaptive culture, leveraging technology and analytics, and continuously improving processes and practices, finance departments can achieve agility and enable their organisations to both conquer the challenges and identify the opportunities of the ever-evolving business landscape.

And remember, as we implement anything new, we should always Think Big, Start Small, Act Now!

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