Article Deliver Accurate Financials to Key Stakeholders with 100% Confidence
When it comes to financial metrics: Accuracy = Confidence
What is the point of a compass or the Maps app on your smartphone? They are tools to help you navigate from point A to point B. Sure you could do things the old way like navigate by the sun or the stars or the moon, but would that be what you would do today? Modern tools have replaced the use of a compass or physical map, even though some traditionalists prefer “old-school” tools.
So what does this have to do with the financial operations of your company? CEOs and CFOs have the responsibility of navigating their companies toward successful outcomes, which usually means steering toward opportunities and away from downside risks. For example, correctly executing on opportunities such as finding the next big market for your products or services will eventually be reflected as revenue and earnings growth.
How can you navigate business decisions without the right tools in place? It’s like flipping an egg with a spoon.
Are your numbers 100% accurate?
A recent survey by the Journal of Accountancy found that 48% of peer reviewers had issues determining if ASC-606 revenue recognition is properly applied or not. That means that 50% of professionals are not confident in their revenue numbers.
Back to my analogy of using a map. What if that map wasn’t updated with the latest routes?
There are a bunch of things you can do to ensure your most important metric, revenue, is accurate. Hire some great revenue accountants. Make sure there are people reviewing the process of closing the books, and hope that nothing falls through the cracks.
Automation is everywhere – can it help?
Automation can help provide you with providing accurate financial information to everyone who needs it. Research shows that automation can lead to a 99.96% accuracy margin with human input errors. Some folks are quick at adapting to technology to solve the problem because they know it will help in the long run. Others like to wait until the potential solution is just absolutely perfect and checks every box before jumping in. Only you know which camp you are in.
Sometimes people from the outside want to peek inside your financials.
As you grow your business – and certainly if you raise any external financing – then someone will be asking to look inside. Mostly to get a view into whether your company is looking good or is a risky bet. The number one request is to see your revenue and revenue growth (or shrinkage) and other things like how you are using your cash and when you might need more.
When this information is requested, somebody in your company [usually Accounting] has to provide this to management. No offense to management, but they often have no idea how hard it was for you to come up with this information and all they do is challenge it. “Is this right?” “How did we not grow by X% when I thought for sure we signed a ton of deals?” “Hey Mr. Manager, why don’t you try to manage this 30 GB excel file that I have open?”
Well, what should you do?
Assess your blind spots. Where are you finding errors, spending time fixing them, or just having conversations about them? How long does it take you to come up with a request from your CFO for that sales report or something along those lines? Does it take you a trip through your ERP, various systems like your CRM [which never has all the answers] and multiple spreadsheets?
If this sounds like you, then try to quantify the amount of time you spend doing this. If you spend more than 20 minutes per [basic] report, then you need to replace your financial compass with something that works a lot better – in terms of both efficiency and accuracy.
The TrueRev Advantage
At TrueRev, we understand that reporting hyper-accurate financials is an integral part of the jobs of successful managers, Boards, and other key Company stakeholders. We have developed a solution that focuses on helping businesses of all sizes maintain and track their revenue, customer contracts and SaaS Metrics in one easy-to-use platform.
Contact TrueRev to Learn More! 👍
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