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In this post we asked the question
“What does the typical month-end reporting nightmare look like for the financial manager?”
I chat to Elzaan from Semaphore communications about the typical month end challenges that financial managers face and how we approach these and assist those FM’s with real life solutions.
From our understanding and experience of the typical month-end process for financial managers we know that the anxiety kicks in a bit before the end of the month when because the month-end is coming. They start to prep all the activities that need to happen. The experience of the business dictates the process that happens – it might be easy, but the ones we focus on are difficult.
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If you experience some of these challenges with your month-end reporting then we may be able to help you.
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You can listen to the audio clip here below. We go through all the challenges that our customers share with us as they prepare and work through the requirements for month end management reporting.
These processes, while different for each business, typically involve these steps in various levels of iteration:
- Extract monthly reports from financials systems
- Import reports into Excel
- Add extra value add calculations to the worksheets
- Merge information into a final reporting worksheet
- Format worksheet
- Do LOTS AND LOTS of checks.
Listen to the discussion audio here
We’ve also provided the transcript of that discussion for you below.
It’s when they need to prepare a management pack for their manco meetings, and then if they have a holding company that they need to report into they will need to do a different reporting pack. It just depends on the nature of the company. The typical things they’d need to do is your standard financials statements (balance sheet, income statement/ pair-down, trial balance).
So that process means they go into the accounting system and pull the information for the period under review (so in October you’d pull your reports for September if it’s just for particular month). The issues you have with that is your standard systems never present the statements in a format that the business actually wants it in – there’s always a bit of manipulation to it. So they take the data, bring it into Excel, add a few columns, like variance columns if the report doesn’t produce that automatically.
They might group things differently – the code of accounts might be set up a specific way for the system for accounting practice but from a business management point of view they might want to see their code of account groupings slightly differently – so not changing them but organising it differently.
For example in your accounting systems you might have operating expenses and your cost centres might be broken up into areas where they cross over. But you might say the cost for advertising is a percentage split between different cost centres and mustn’t just be captured as one thing. So those are the type of things that financial managers or team will then go into, saying if we have department A and B the cost will be a 50/50% split between the two departments. Where you can get more complicated is if you have department A, B and C and the percentage split is different say 50%, 25%, 25%.
Accounting systems generally don’t do this very well and just give you one number because the rules are so varying and changing, but as a business expert you know that it needs to be split up into 3 numbers. Or the reverse, you’ve got 3 numbers but you want it grouped at a higher level and just see 1 number. So this is what the financial folk get involved in to make sure the information is put into a format that’s fit for their business.
In what we’ve seen with clients and people we talk to, they’ll have this workbook or, call it the September management pack, so it’s either one workbook with lots of sheets or few workbooks, like 3 or 4 workbooks with a varying number of worksheets in it with different information – the size of the company is also quite important and will factor into it.
What happens is that they actually become very efficient at doing this but it is still very, very manual. The different time of the financial period will determine the amount of effort that goes into it so a quarter-end is more effort than a month-end, half-year is more effort than a quarter-end because there is additional reporting from a half-year perspective if your reporting systems doesn’t allow you to bring in last year or comparative information.
It’s also very static – once it’s done it’s done. If you change your questioning that workbook won’t be able to answer your new question. If you say I actually want to do a cumulative analysis of costing for a certain cost centre over a five-month period you can’t do that. You’d have to rerun an accounting report, and do the manual process all over again for that five-month period. Or you’re looking to move your code of accounts around, or you’re restructuring your business and want to see what will things look like in a new structure with different divisions or business units or a different group of account to see if you change things what will the effect be. It’s very difficult to do this in a normal accounting system so you have to do that work manually.
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If you experience some of these challenges with your month-end reporting then we may be able to help you. Our process is frictionless and our understanding of business and the importance of on-time and accurate data is world-class.
We’d love to help you save hours in your month-end process without sacraficing quality of the information