What if you had reliable KPIs and reports to monitor your company's financial performance? For many CFOs, such an idea is utopian... And yet there is a very real solution for facilitating financial reporting and speeding up the closing of accounts: Accounts Payable (AP) automation.
What is financial reporting?
Financial reporting is a process designed to collect, analyse and communicate a company's financial and operational data over a given period.
It is generally implemented by the Chief Financial Officer (CFO), accountants or management controllers.
It generally takes the form of summary dashboards or graphs, making it possible to monitor the organisation's objectives, obtain a clear and precise view of its financial performance and measure the effectiveness of the actions taken.
By matching the key performance indicators (KPIs) with the associated financial results, it is possible to measure the profitability or loss associated with each action.
For the CFO, reporting is therefore a powerful decision-making, forecasting and planning tool, as well as ensuring transparency and helping with regulatory compliance.
What are the different types of financial reporting?
Today's finance department no longer confines itself to financial reporting in the strict sense of the term. It now has increased responsibility for the company's strategic and operational management.
This is a crucial task, as it involves supporting the overall strategy and helping to ensure compliance, while maximising the financial and operational performance of the organisation. As a result, the CFO has to juggle different types of reporting.
Financial reporting
Financial reporting encompasses:
- Financial statements: Produced once a year, these include the balance sheet, income statement and cash flow statement. They provide an overview of the company's financial situation, profitability and cash flow.
- Management reporting: This provides a detailed analysis of the company's financial performance (profitability, costs, margins, etc.), often segmented by department, product or market.
Generated on a monthly or quarterly basis, it facilitates the communication of this information to senior management, operational managers and the board of directors, to help with strategic decision-making.
Operational reporting
Operational reporting is geared towards managing and optimising day-to-day operations, in real time or near real time.
It enables any inefficiencies or problems detected to be corrected immediately.
This involves monitoring the key performance indicators that are essential to the company's day-to-day operations, such as stock turnover, delivery times and process efficiency.
In addition, the creation of an activity report enables the company's operational performance to be analysed, including data on production, sales and quality.
Budget reporting
Budget monitoring is essential for comparing planned budgets with the organisation's actual performance, in order to identify variances and take corrective action as early as possible.
Forecasting, which involves making financial projections based on current trends and future assumptions, is another important aspect of budget reporting.
It enables the CFO and senior management to adjust budget policy accordingly.
Tax reporting
The CFO is responsible for the various reports prepared for the tax authorities, for example VAT returns.
This also includes the specific reports necessary in the event of a tax audit, to provide evidence of the company's compliance.
Regulatory reporting
Other specific reports may be requested by financial regulators, to ensure that the organisation complies with the legal requirements to which it is subject.
This is the case, for example, with solvency reports for listed companies, but also the CSR (Corporate Social Responsibility) report, which deals with performance in terms of sustainability and social responsibility.
Strategic reporting
To obtain a strategic overview of the company's performance, the CFO must rely on management dashboards containing financial and non-financial indicators that are updated in real time.
In addition to real-time dashboards, trend analysis reports provide a forward-looking perspective, enabling the CFO to anticipate future challenges and opportunities for the organisation.
Financial reporting: The challenges facing CFOs
Financial reporting offers undeniable benefits, but it also poses a number of challenges for CFOs.
With data sources multiplying and diversifying all the time, it is increasingly difficult to collect and compile data.
Added to this is the lack of interoperability between tools: many CFOs find it difficult to integrate and reconcile data from different financial systems.
Furthermore, the manual and time-consuming processes that persist within organisations only add another layer of complexity.
They also have an impact on the reliability of the data collected, which all too often still contains critical errors.
Another major challenge is the pressure on CFOs to meet ever-shorter reporting deadlines and even to provide reports in real time. One of the reasons for this is the desire to speed up the closing cycle, the financial results of which are used for analysis. Here again, the risks associated with manual processes are numerous: errors, delays, inconsistencies, etc.
Finally, as financial reporting evolves towards real-time data analysis, CFOs must ensure that the information provided is not only accurate but also actionable. This requires robust data governance, seamless system integrations, and advanced analytical capabilities to extract meaningful insights quickly. Without these, the risk of misinterpretation or delayed responses increases, impacting financial strategy and compliance.
How does automation facilitate real-time financial reporting?
There's no doubt about it: manual processes are a major contributor to the difficulties encountered by CFOs when it comes to financial reporting. That's where AP automation comes into its own, providing speed, reliability and visibility.
1. Accelerated closing and reporting
A Purchase-to-Pay (P2P) automation solution offers a range of features that can save you valuable time on a day-to-day basis:
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Multi-channel capture enables 100% of data flows to be collected, while automatic data entry eliminates the errors inherent to manual input.
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Intelligent workflows optimise invoice processing, significantly reducing lead times.
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Integrated search and reporting functions provide easy access to documents and data, centralised in one place for real-time visibility.
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Work in progress, such as unvalidated invoices or unapproved purchase orders, can be viewed at any time, simplifying the closing of accounts.
This type of software is also capable of quickly generating diferred charges, identifying accrued expenses, as well as creating purchase orders (or importing purchase orders from another tool). What's more, customised reports can be designed to summarise diferred charges and accrued expenses by selecting and organising all the necessary fields.
Last but not least, the solution's integration with accounting and ERP systems ensures that accounting data is automatically updated in real time.
2. Making data more reliable
Automation means the elimination of human error, whether in data entry, validation, matching or control.
Purchase-to-Pay software is capable of checking the compliance and accuracy of each transaction, thanks to automated purchase order-invoice reconciliation. Systematic checks are also carried out, such as verifying VAT rates. Better still, the solution immediately alerts you if an anomaly is detected.
Thanks to advanced artificial intelligence systems, transactions can be analysed to detect any suspicious behaviour, such as a change of bank details on an invoice. This is a real asset for fraud prevention, but also a way of avoiding financial losses and guaranteeing the reliability of reporting. Powerful validation workflows, combined with secure, automated authorisation management, also help to reduce the risk of error and fraud.
Finally, Purchase-to-Pay automation software is a real asset for audit trails, since it guarantees complete traceability at every stage of the P2P process, by making it possible to track the interventions made on the various documents.
3. Real-time visibility
A Purchase-to-Pay automation solution processes invoice data instantly, providing quick access to an organisation’s complete financial data.
This enables the CFO to generate customised reports and dashboards to track commitments and expenditures while optimising performance by department and cost category.
Beyond measuring the finance department’s performance, it is also a valuable tool for identifying bottlenecks and areas for optimisation and improvement. Results can be exported to Excel or a business intelligence tool in just a few clicks.
This comprehensive visibility over invoices and financial documents not only facilitates reading but also enables easy analysis and explanation of cost variations. Purchase requests, invoices, orders and other attachments are archived for 10 years and can be retrieved through an intuitive keyword search module.
Finally, an automated procurement and invoicing solution helps assess year-end budget forecasts while tracking budget consumption in real time.
Guaranteeing accuracy, speed, reliability and real-time visibility, automation significantly simplifies financial reporting. By accelerating the financial closing of accounts process, the right P2P solution allows for smoother handling of management reporting and financial statements. This enables organisations to harness the full potential of financial data, make informed decisions in real time and implement the right corrective measures to address performance issues. By structuring and automating financial reporting, businesses not only gain a strategic advantage in decision-making but also ensure compliance and transparency, facilitating both internal and external audits with greater ease. This level of control and reliability is essential for sustainable growth and long-term success.
Choosing the right AP automation software is crucial for long-term efficiency and scalability.
Here are some FAQs about our software to help you learn more about its features!
With Yooz, finance teams experience a dramatic reduction in manual tasks, an improvement in process accuracy and significant cost savings. Yooz allows companies to optimise their AP workflows and improve supplier relationships by accelerating payments and providing greater financial visibility. By adopting Yooz, companies take a strategic step toward enhancing productivity, compliance and agility and gain clear competitive advantages.
