What are the best strategies for dealing with discrepancies in financial data?

1 Identify the root cause

The first step in dealing with discrepancies is to find out where they come from and why they occur. This may require checking the data sources, the calculations, the assumptions, the formats, and the dates of the data. You may also need to compare the data with other sources, such as previous reports, external benchmarks, or industry standards. By identifying the root cause, you can determine whether the discrepancy is a mistake, a misunderstanding, or a legitimate difference.

2 Communicate and collaborate

The second step is to communicate and collaborate with the relevant parties, such as your team, your manager, your clients, or your auditors. You should explain the discrepancy, its cause, and its impact on the financial data and the performance indicators. You should also listen to their feedback, questions, and concerns, and try to reach a consensus on how to resolve the discrepancy. Communication and collaboration can help you avoid conflicts, misunderstandings, and delays, and foster trust and transparency.

3 Correct and document

The third step is to correct and document the discrepancy, if possible and appropriate. Depending on the cause and the impact of the discrepancy, you may need to adjust the data, recalculate the results, revise the report, or update the system. You should also document the discrepancy, its cause, its resolution, and its implications for future data and reports. Documentation can help you track and monitor the discrepancies, as well as provide evidence and justification for your actions.

4 Implement controls and standards

The fourth step is to implement controls and standards to prevent or minimize discrepancies in the future. This may involve improving the data quality, accuracy, and consistency, by using reliable sources, automated systems, validation checks, and reconciliation processes. It may also involve establishing and following clear and consistent methods, assumptions, formats, and definitions for the data and the performance indicators. By implementing controls and standards, you can reduce the risk of errors, inconsistencies, and confusion, and enhance the credibility and comparability of your financial data.

5 Learn and improve

The fifth step is to learn and improve from the discrepancies and their resolution. You should evaluate the effectiveness and efficiency of your strategies, and identify any gaps, challenges, or opportunities for improvement. You should also share your learnings and best practices with your colleagues, managers, clients, or auditors, and seek their feedback and suggestions. By learning and improving from the discrepancies, you can continuously enhance your skills, knowledge, and performance as a business reporter.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?