What is the Business Case for Cloud-Based Financial Reporting/Analysis?
By Kevin Hsu - Updated March 7, 2017
In the current business climate there is a large focus on how businesses can and should use cloud-based services to gather more accurate insight out of their data analytics and conduct their financial reporting/analysis. Many firms find themselves struggling to set quotas, create sales budgets, or conduct accurate sales and operations planning when using Excel spreadsheets. If we look at the key financial processes such as budgeting, planning, forecasting and reporting, an overwhelming number of businesses continue to depend on spreadsheets to perform these important functions; yet, most departments are aware that they spend too much precious time managing and organizing data, when they should be using those hours to actually conduct their financial reporting/analysis.
The key challenges in using spreadsheets and email for financial reporting/analysis:
- Too much manual work – the process takes too long
- Lack of security sending budgeting spreadsheets via email
- Spreadsheets are error-prone, low data quality
- Limited reporting and analysis capabilities
Similar challenges are faced when using spreadsheets for financial consolidation and reporting:
- Too much time spent on data collection
- Challenges in consolidating multiple spreadsheets and correcting errors
- Limited reporting and analysis capabilities, and too much manual effort
- Not being compliant with US GAAP or IFRS
- Lack of controls and audit trails
- Lack of security
- Time-consuming and costly audit process
Research has shown that nearly 90% of spreadsheets contain some kind of error. If that alone wasn’t a big enough issue, the fact that many small businesses are juggling two or three financial reporting and analysis software programs, while mid-level companies may be juggling four to seven, should be.
Excel is a static financial reporting/analysis solution. It is unable to bring together these various programs and therefore creates a breeding ground for financial reporting/analysis errors. When companies have data that’s updated in real time for all users, it means less iteration, fewer update delays, and more veracity in the data. In other words, integrating your data into one centralized source through a cloud-based financial dashboard is a genius way of ensuring that fewer reporting errors rear their ugly heads.
Managing Financial Reporting/Analysis in the Cloud
Historically, most organizations have deployed packaged EPM applications for financial reporting/analysis on-premises. But many are now finding that this approach can be time-consuming and costly, especially for small and mid-sized organizations. This is fueling increasing interest and demand for cloud-based financial reporting/analysis.
Cloud-based solutions offer the same capabilities as on-premises solutions. In addition, they also provide a number of advantages over on-premises solutions:
- Speed of deployment
- Reduced reliance on IT
- Faster innovation
- No hardware or software to set up or maintain and upgrade over time
- Reduced up-front costs and lower ongoing cost of ownership
- Better security
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