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Financial performance reporting is how organizations demonstrate their financial activity and outcomes over a certain period. But accurately representing your performance in finance reports can seem daunting. Errors or omissions may paint an inaccurate picture of company performance, so getting it right every time is essential.

How can organizations improve their financial reporting to reflect their success in the previous month, quarter, or year? Good processes and the right technology can make a big difference. 

Read on to gain a deeper understanding of the financial reporting process, including the following:

  • What finance reports are and how they’re used
  • Why accurate, timely reporting is so important
  • How to improve your financial reporting practices

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What is a finance report?

It is common for businesses to create several financial reports for different time intervals. Monthly reports, quarterly reviews, and annual financial reports are customary. In many cases, financial reporting is used to plan future business operations. For publicly traded organizations, financial reporting is mandatory.

The major financial statements that businesses produce every month are the cash flow statement, the income statement, and the balance sheet. Each of these pro forma reports offers a different perspective on the company’s financial condition over the prior period. Together, they demonstrate the financial management of the company. 

Cash flow statement: The cash flow statement shows all the cash positions and movements of cash through the organization for a designated period.

Income statement: This form outlines the organization's inflows (earned money) from orders, investments, and financing, and losses. This is sometimes called a profit and loss statement, or P&L. 

Balance sheet: The balance sheet outlines all the assets and liabilities currently held by the organization. It demonstrates the balance of income and spending over the described period. 

Shareholder equity statement: For publicly traded companies, this statement shows fluctuations in the value of shareholders' equity or ownership interest over a specified period. While this information is also available through balance sheet reporting, many organizations choose to highlight the changes in equity in a separate form. 

Improving financial reporting is essential for organizations. By improving how your financial position is represented in these documents, you can do more accurate financial planning, understand and eliminate potential cash leaks, increase visibility for your investors, and show potential creditors that you are creditworthy.

15 Tips to improve your next finance report

Here are 15 ways to improve your financial analysis and reporting initiatives. Implementing any of these techniques will result in better reporting outcomes. Committing to all 15 will create ultimate visibility and cohesion in your financial reporting.

1. Start with clean data 

The fidelity of your financial data is the heart of your financial narrative. Chaos in your data will make it harder to prepare and complete month-end closing. It also increases the possibility of discrepancies in your financial reporting. By establishing good processes and verifying data regularly, you can begin your reporting process on the best possible footing. You should sanitize data for all income, payments, investments, and transactions that occur within the general ledger. 

2. Centralize your data holdings

Data silos make it impossible to accurately depict the financial narrative you are trying to create in your reporting period. By centralizing data into one place you will improve the overall integrity of your financial reporting and make the process that much faster.

3. Enhance communication

Financial reporting is a team sport. To maintain the best data integrity and understand the outcomes your organization is trying to achieve, it’s essential to establish a culture of healthy communication. This communication should extend beyond your finance function into every department that is earning revenue or spending money. Building effective communication channels between finance, sales, marketing, and operations is vital to your reporting—and the company’s success.

4. Keep a pulse on vendors

Keeping tabs on accounts payable and accounts receivable is essential for maintaining accurate records of expenses and inflows and understanding your cash position. Therefore, make it a priority to communicate with your vendors throughout the month, and check in with any questionable accounts before month end. As with internal communication, fostering good external communication improves visibility and speeds the month-end close cycle. Many organizations automate this vendor management process through a platform like Order.

5. Establish an approval process

Having an accountability system in place for your accounts payable increases your data's accuracy and processing speed. This is true for both invoice processing and later financial reporting activities. By establishing an approval process for your reported financial numbers, you create opportunities to spot inconsistencies and increase the accuracy of your reporting.

6. Speak to your audiences 

Understand that every stakeholder who reads your financial reporting will bring individual insights and differing abilities to the process. It’s important to create financial reporting that can speak to multiple departments and levels of your organization. To accomplish this, go beyond simply sharing the numbers in your financial reporting. Aim to create and successfully communicate a business narrative, highlighting goals and objectives. Develop your financial reporting in such a way that big-picture thinkers and spreadsheet mavens alike can benefit from the information you share. 

7. Keep an eye on budget vs. actuals

There may be no surprise less pleasant than completing your financials only to discover significant discrepancies between your budgeted and actual expenditures. To avoid this end-of-month scenario, maintain some monitoring of actuals as they occur throughout the month. Setting up notifications about budget deviations and maintaining good communication with your budget managers can reduce the occurrence of budget overruns.

8. Know your North Star metrics

Every business is striving toward a unique mix of KPIs and organizational goals. By understanding your company’s main objectives, you can craft financial reporting and narratives that help stakeholders understand your progress and what course corrections are necessary. Collaborating on KPIs across departments can create better alignment and overall performance improvement.

9. Mind the GAAP

Take the time to ensure all of your reporting and required tests meet the GAAP (generally accepted accounting principles) or IFRS (international financial reporting standards) required for your organization. Establishing good financial reporting processes will help improve compliance and ensure clean audits.

10. Prep early for close

Prepping in advance for month-end close activities can make the entire process go smoother. Start your process by checking in with department heads for relevant information, touching base with vendors regarding outstanding invoices, and collecting the data needed for auditing and reporting financials.

11. Get cash in order

Checking your cash accounting off the list early takes care of one of the critical month-end items and establishes a sound basis for the rest of your monthly closing activities. By handling cash accounting first, you can then move on to other activities with a clear foundation for the reporting process.

12. Know your fixed assets

Fixed assets are another critical component of your financial metrics. Review new fixed asset accounts or changes to existing fixed assets like property, plant, or equipment. 

13. Pay attention to fluxes

Flux (fluctuation) reporting can help surface issues in your accounting process or changes needed in your future budgeting and forecasting activities. Take time to evaluate and report on significant fluctuations over various reporting periods, such as year-over-year, previous quarter, previous half, or previous month.

14. Approach financials as a team

The complexity of financial reporting, even for small businesses, requires a team approach. Making month-end closing a collaborative effort creates a higher level of accountability in your reporting. It also brings a variety of perspectives into your financial narrative. Consider doing a dry run of financials with your accounting team after completing preliminary prep. This can surface any issues in your financial reports before they are distributed for use.

15. Streamline using technology 

As with many other business processes, using technology and automation in your financial reporting processes can result in more accurate and timely reporting of your organization's vital financial information. Accounting software can automate many repetitive tasks in the financial reporting process and free up your accounting team for higher-value activities. It can also speed up the month-end close process while maintaining the integrity and accuracy of your recording.

How Order improves your finance reports

If you are ready for more clarity in your financial reporting, Order can help you achieve that goal. By automating the spend management process and streamlining aspects of the procure-to-pay process such as three-way matching, coding, and payments, you can better understand your cash flow and gain increased visibility into the actions that drive revenue for your organization.


To see how Order can help streamline your financial reporting and month-end processes, request a demo today.