Straightening Out Your Financial Reports

Straightening Out Your Financial Reports

The key to preventing messy books is consistency in data management and control. 

The Start

Organization is at the heart of accounting. Transaction recording, activity summarization, and reporting results all center around organized data and information. However, good accounting is all about organizing data appropriately – that is, in a way that allows for further analysis. 

A new company with minimal transactions may not have trouble keeping its accounting structured or putting together clear, accurate financials fast. However, as a firm grows and transaction volumes increase, juggling all the processes required to maintain accounts and financials in order becomes increasingly difficult. Inconsistent sorting, haphazard changes, and an abundance of bulky and hyper-specific accounts are all too typical. The end result? Untrustworthy, sloppy books make it difficult for leaders to acquire an accurate picture of the company’s past and present positions. 

The Mess 

Duplicate, poorly arranged, and unmatched transactions affect the true picture of a period’s income and expenses. Trusting — and acting on — incorrect account balances can be costly to a company and understanding that the financial data produced is pretty much meaningless can be incredibly irritating. 

A single incorrectly classified transaction can disrupt two or more accounts. And the more mistakes we make, the less accurate our books’ presentation of past, current, and future positions becomes. Initially, the mess sneaks up against you slowly. A few transactions are classified into incorrect accounts and are left to be corrected “later.” 

Because of this, periodic clean-ups have become a normal procedure in many accounting departments. Time has been set aside to establish how far the books have deviated from reality, whether the difference is material, and what adjustments are required to get the financials back into order. 

Because modifications and short-term solutions do not address the core cause, bad data management caused by ineffective tools, policies, and processes will continue to produce chaos. 

The Solution 

To permanently end the loop of errors, improved tools and efficient information systems that support enhanced data management are required. NetSuite’s cloud accounting software solution is a sophisticated, rules-based engine that classifies transactions automatically, reliably applies accounting treatments, and assigns accounts based on defined criteria. 

When incoming transactions are consistently categorized into the correct accounts, it eliminates the need to detect problems and make changes year after year. Accounting solutions designed specifically for managing complex processes, such as accounts receivable and fixed assets, provide a higher level of control and management while decreasing manual work and human error. 

NetSuite’s platform functions from a single source of data, ensuring that the information from various systems contributes to the accuracy and reliability of core financial statements. Finance professionals may address the fundamental cause of chaotic financial data, minimize errors, and increase supervision and control with these tools and NetSuite’s multidimensional data capabilities. 

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