In today’s episode of ‘From the eLearning Trenches,’ we asked one of our learners, a partner in public practice, to review the use of software used to provide business advisory reports. What can the firm do to improve internal capability?
Learner Reflection
We use 3 primary software platforms for business advisory reporting: Xero, Excel and Spotlight reporting.
- XERO – 80% of our business clients utilise XERO, which is also our practice management software which is really useful from an internal reporting point of view. XERO is also very useful at integrating with other programs which we find isn’t the case with other bookkeeping software. We have a number of XERO champions across the firm in different roles (manager, intermediate, juniors and bookkeepers)
- Excel – We have developed a number of excel reports and templates over the years, some unique to a client, some unique to an industry and some more general.
- Spotlight Reporting – Used sparingly to date but something that our firm is currently looking to utilise in the future. We currently have two staff members who are heading the implementation of this software.
Using our current programs to feed/integrate into new management reporting software is a key focus of our firm over the next 12-18 months.
We are also exploring other software to help expand our focus into management reporting and advisory capabilities for our clients.
I believe it is important that we have some experts, or ‘champions’ as we label them to really have a high level knowledge of these programs to help train, assist and direct the firm as to the best approach to utilise these programs to assist our clients.
At the same time, exploring other management reporting software can help us provide these reports much more efficiently and effectively for our clients.
It is important that we understand the capabilities of these software programs and how best we can integrate them with the services we are looking to provide for our clients.
Feedback from our experts
One of the main challenges in using business advisory reporting tools effectively is improving the level of internal capability and experience with these tools. If they are only being used with a few business clients, no-one really has the opportunity to learn how to maximise their value.
A general rule of thumb is at least 6 clients should be regularly receiving financial reports with any specific software program. This will allow capabilities to be leveraged, freeing up client managers to focus on adding value through rich conversations, supported by the financial reports.
It’s also essential that business clients take on responsibility for processing data that is accurate and timely. The more time the accounting firm spends doing this, the less time they have available for meetings and discussions around the data. From the client’s perspective, this is a critical step to ensure that value for the cost of service is achieved.
Microsoft excel is still widely used as it allows customisation of data processing and reporting to provide information to clients that’s specifically relevant to their interests and goals.
There are many business financial reporting tools, including Fathom, Spotlight, Castaway and Calxa. They all have their benefits. The key to adding value is to have an internal champion who can provide reports as required.
What actions can accounting and advisory firms take to improve the quality of management reports provided to their clients?
- Understand Client Needs and Objectives
Before generating management reports, accounting and advisory firms engage in thorough discussions with their clients to understand their specific needs, objectives, and preferences. This involves gaining insights into the client’s industry, business model, key performance indicators (KPIs), and strategic goals. By understanding these factors, firms can tailor management reports to provide relevant, actionable insights that align with the client’s objectives.
- Implement Robust Reporting Frameworks and Tools
Accounting and advisory firms invest in implementing robust reporting frameworks and leveraging advanced tools and technologies to enhance the quality of management reports. This includes utilizing sophisticated accounting software, data visualization tools, and analytics platforms to collect, organize, and analyse financial and operational data efficiently. These tools enable firms to generate insightful reports that offer clear visualizations, trend analysis, and predictive insights, thereby facilitating informed decision-making by clients.
- Provide Interpretation and Analysis
In addition to presenting raw financial and operational data, accounting and advisory firms add value by providing interpretation and analysis of the information contained in management reports. This involves explaining key trends, variances, and performance metrics, as well as identifying potential risks and opportunities for improvement. By offering expert analysis and actionable recommendations, firms help clients make informed decisions to optimize their business performance and achieve their strategic objectives.
Key takeaway: To get real value from financial management reports, ensure that you have strong internal knowledge and capability with the software platforms used.
This assessment task and response is taken from the Business Analytics for Managers eLearning course (assessment task 6.1). Click here to explore this course
Also, take a look at the Virtual CFO Essentials eLearning Course
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