An alarming 46 per cent of finance professionals believe that they produce reports that are never used and 63 per cent believe that senior managers should make more use of financial information. This is according to research by Source for Consulting (Source). Source surveyed 104 decision makers and finance professionals in UK mid-sized companies and carried out qualitative research with UK managers and management consultants.
According to the research report ‘Making the numbers add up – how better financial accounting can support and promote growth’, the belief of finance professionals that reports are under-utilised is not misplaced with 48 per cent of the managers and directors surveyed confessing to reviewing a report produced by someone else no more than once a week. 22 per cent of these managers and directors admit to using reports only ‘occasionally’ with 7 per cent stating that reports are never used.
It is clear that not all the reports produced by finance departments in mid-sized organisations are being used like they should be. This is bound to create frustration amongst the finance teams with the production of reports being viewed as wasted time and effort.
The managers and directors surveyed provided a number of reasons for failing to use reports produced by someone else on a regular basis. 31 per cent feel that the data in the reports they receive is out of date with 27 per cent stating that the data is inaccurate. 26 per cent feel that it takes too long for the finance department to produce a report when asked and 23 per cent admit to receiving too many reports and so they are unclear as to what to focus on.
With nearly a third of the managers and directors surveyed confessing to lacking confidence in the timeliness of the data in the reports and a similar figure feeling that the data is inaccurate, systems and processes need to be put in place to ensure that real-time and accurate financial reports are produced. This will provide managers and directors with greater confidence in the figures.
Rachel Ainsworth, Senior Research Manager from Source for Consulting, adds: “Reports are vital for critical decision making, however they are useless if their value isn’t recognised and the figures are not trusted. Financial education and cultural changes in addition to reliable and robust software systems and processes are therefore required to ensure that business decisions are based on solid, timely and trustworthy information and analysis.”