The Challenges with Standard Accounting Software
As organizations expand, the volume of financial data they produce grows exponentially. Standard accounting software like NetSuite and Xero can handle basic bookkeeping tasks effectively, but when it comes to generating insightful, actionable financial reports, they often fall short. This gap is where the prowess of (Business Intelligence) BI tools for finance shines. BI tools like PowerBI, Tableau and Domo are not only capable of connecting to a plethora of data sources but also automate data updates, making them a formidable choice for accurate, up-to-date financial reporting.
Financial reports are the pulse that indicates a business's financial wellbeing. They offer key insights into crucial performance indicators such as revenue, expenses, profits, and cash flow - all vital for making well-informed business decisions. With a competent BI tool, companies can create bespoke financial reports that align with their unique needs and business frameworks.
Why BI Tools Are a Game-Changer for Financial Reporting
Standard accounting software like NetSuite and Xero may have restricted reporting capabilities, but using a BI tool for finance reporting brings about the power of multi-source data connectivity. For instance, a multinational company with subsidiaries operating under different financial regulations and using diverse accounting software can easily consolidate all their financial data in one place with a BI tool. This consolidation provides a comprehensive view of financial performance, leading to more efficient and precise financial reporting.
Furthermore, BI tools provide the gift of automation for data updates. In contrast to manual report generation that is prone to errors and time-consuming, BI tools can be programmed to automatically pull data from various sources, updating reports in real-time. This automation ensures timely, accurate financial reports - a must-have for informed business decision-making.
Beyond standard financial reports, BI tools also empower organizations to create ad-hoc reports focusing on specific aspects of their financial performance. For instance, a company could generate a report analyzing the profitability of various product lines or customer segments. These reports can be created swiftly, enabling real-time data-driven decision making.
Traditional accounting software often lacks user-friendly interfaces that non-finance stakeholders can easily understand, potentially leading to confusion and misinterpretations. BI dashboards, on the other hand, present financial data in an intuitive, visual format, making it easy for stakeholders to grasp and navigate to find the information they need. This clear representation not only accelerates decision-making but also fosters a unified understanding of financial reporting across all stakeholders.
The Variety of Financial Reports Made Possible by BI Tools
So, what kinds of financial reports can be generated using BI tools? The range is extensive, but here are a few examples:
- Profit and Loss (P&L) Statements: P&L statements offer a glimpse of a company's revenues, costs, and expenses over a designated period. With a BI tool, companies can enrich P&L statements with additional KPIs such as gross profit margins, operating margins, and net profit margins.
- Cash Flow Statements: Cash flow statements monitor the movement of cash within a business. Using a BI tool, companies can create customized cash flow statements that shed light on their cash position, including operating cash flow and free cash flow.
- Balance Sheets: Balance sheets provide a snapshot of a company's financial position at a specific point in time. With a BI tool, balance sheets can be enhanced with additional KPIs such as debt-to-equity ratios, current ratios, and quick ratios.
Use Case: Integrating NetSuite with Domo
Connecting NetSuite to a BI tool like Domo is one of the most common requests we get from finance teams. The integration involves installing a Domo bundle in your NetSuite instance, configuring the connector, and navigating undocumented fields and a known data sync bug.
We wrote a dedicated guide covering the full process, including the parameters that are not explained in the official documentation and the production workaround we use today: How to Connect NetSuite to Domo: What the Documentation Does Not Tell You.
If you need to build dashboards with NetSuite data in Domo, Power BI, or Tableau and need help, do not hesitate to reach out to us.
Conclusion
Financial reports are essential for tracking the financial health of a business, and BI tools for finance are the best platform for creating them. With the ability to create customized and dynamic reports, organizations can gain deeper insights into their financial data.
By automating the reporting process, organizations can save time and resources, allowing them to focus on other important areas of their business. Traditional accounting software can be limiting in terms of reporting capabilities, and BI tools offer a more robust solution.
If you would like to see a real world case study of integrated finance reporting built with Domo, read along here.
