Harness The Power of Excel 03 - Sourcing the Financial Data

I'm back again with my third monthly article in my role as Expert Excel Tamer Paula Turk.

Here we answer the question of where the Financial Output comes from - and we cover off Accounting Systems, Financial Reporting and the data that underlies it all.

WHY DO WE HAVE AN ACCOUNTING SYSTEM?

ERP systems are crucial for controls, approvals, reporting, cash management and compliance.

They ensure that sales invoices and purchase invoices are maintained and that bank accounts are carefully controlled for monies in and monies out.

The huge drawback of accounting systems is that the output is just not very good, nor is it very flexible.

REALLY GETTING INTO THE DATA

Any consultant will tell you that it's all in the data. Not only in the data though - the crucial aspect of understanding the data.

Once it is output to Excel - and yes - we still do that - either with manual export or the more sophisticated Excel pug-ins, we then have to de-code and decipher it.

A TYPICAL REPORTING MONTH

Month end reporting is a continuous process. It's essential that all the inputs work seamlessly and that the timings of systems being rolled off and rolled on is understood by everyone.

Lose the Flexibility

Where managers spend most of their time is in decoding arbitrary naming conventions in data input. While OCR has been a huge benefit in keying in invoices - ultimately an accounts assistant makes their own choice in how that information is compiled.

Flexibility is NOT a good option to have at the input levels of the accounting processes.

STOP SPECULATION - have layouts that are consistent and prescriptive and standardised.

Have a view from external consultants

Not only are external personnel not embodied in existing practices, they also have a keen eye and a keen ear for what is deemed best practice and to instil that in your company.

They aren't needed for long - and their impact will be felt for years to come.

THE FINAL OUTPUT

A seasoned accountant has that instinctive feel for the numbers. They know where systems have failed, or processes haven’t run correctly.

Best practice when maintained throughout the month ensure a smooth month end and the volume of corrective processing is much reduced.

The key overall financial metrics and reporting are contained in 3 main documents:

? Profit and Loss Account or Income Statement

? Balance Sheet

? Cash Flow Statement

What they have IN COMMON is the need for robust data underneath.

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1. Whether you run a large private or public enterprise, or operate in a small start-up, you can optimize your use of Excel. ?By using the tips provided in this series, you will save time and save money, plus reduce team frustration. All of which all leads to vastly increased profits.
2. Ask how I can help your team to introduce best practices from the ground up, create better reports and models, reduce the dangers of data misunderstandings, and generate huge savings of both time and money.
3. With a love of maths, maths, maths, and more maths I'm always keen to get my head around your numbers and understand your data. Plus, I'm extrovert too - very much the talk of the office and a great team-mate. Great for building up inter-departmental synergies.

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• ?? UK 07773 368195
• ?? INT +44 (0) 7773 368195
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