At many firms, management monitors the health of the firm through static reports generated periodically. Although this has been the status quo in most firms for decades, it presents a number of
challenges. Static reports can be helpful for getting a picture of your firm’s operations at a specific moment of time. However, the information is hard to compile, quickly out of date, and represents a single view of the data. The following reporting mistakes are common, but they don’t have to be.
Searching through pages and pages of data
Accounting firms generate and store an astounding amount of data. A typical report could run hundreds of pages. No human could possibly digest and analyze all that information. In order to pull insights out of all those numbers, firms should be identifying and tracking specific KPIs. Keep in mind that what you measure can have a big impact in your firm’s performance. For example, realization is a popular metric, but can encourage bad habits if not measured carefully.
Relying on stale data
Traditionally, firms pull reports once per month, and they don’t refresh those reports until the next month. Pulling data from multiple sources means a lot of time spend compiling and formatting reports. Well, a lot can change in 4 weeks. When set up properly, dashboards can give firms an understanding of real-time or near-real time data. The ability to see fresh data every day makes firms more agile and can help managers make adjustments on the fly.
Looking backwards instead of ahead
Just as clients are expecting more forward-looking advice instead of backwards-looking reports, firm managers should also be looking at data with an eye towards the future. Historical reporting is an important source of information, but it’s only the first step. When firms spend less time compiling and analyzing reports, they can spend more time on strategic planning. Data visualizations can help firms identify trends, and predictive tools can help firms make connections that would otherwise be buried in data.
Gaining the skills you need
Although these reporting mistakes can be difficult to avoid, new tools and technologies can help. Business intelligence tools like Microsoft Power BI can help provide actionable insights into your data. However, as a new technology, Power BI is not a common skillset among accountants. That’s why Wolters Kluwer offers several training options for accountants who want to learn more. Get more information about our Power BI training options.