Many organisations take their financial information for granted. This often surprises me because in my experience relatively junior employees are regularly tasked with performing key responsibilities such as bank reconciliations and debtor close off which if not done correctly can have a signficant impact on results for the period. Consider the following headings in relation to your financial information.
Are your management reports produced within an agreed time frame each month or quarter? Information goes out of date very quickly and to be useful and relevant it should be available within a very short time frame in order to help in future decision making.
Most business owners have a gut feeling about how they their business is performing. Do your financial reports support this? Can you drill into the information available to ensure its correct?
Accountants love technical terminology but business owners should insist on getting information that is understandable to them and in a format that makes sense to their business.
Quality rather than quantity applies to financial reporting. You should be able to see at a glance how your business and, if relevant, key divisions are performing. Accountants are there to do the reporting for you. Don’t fall into the trap of digging through the detail to get the answers you need.
Technological advances mean that information can be circulated very quickly, however don’t assume that just because the information can be produced at the push of a button it is always right. All financial reports are only as reliable as the data that they are based on and the ability of accounts staff to interpret that data.
In summary you should only TRUST your financial reports if you are happy with the points made above.