Operational Reporting: Why the Struggle Is Real

Ask any craftsman the secret to excellence, and you will likely hear that, in addition to skill, the craftsman needs the right tools for the project.

The same can be said for finance teams as they work on operational reporting. The most skilled finance professionals still need the right tools to get the job done well.

insightsoftware partnered with Hanover Research to discover which tools finance professionals use most for operational reporting and how they feel about those tools. In a survey of 500 finance decision-makers across multiple industries around the world, we found that 89 percent of finance professionals are not satisfied with the tools they use for operational reporting. Only 23 percent are able to produce all the operational reports required.

A Quick Overview of the State of Operational Reporting

Operational reporting, sometimes called business reporting, offers valuable business intelligence to decision-makers throughout the enterprise. These reports focus on short-term realities and draw from low-level data across multiple business systems to provide a clear and concise view of daily operations.

Finance teams generate many types of operational reports for departments across the organization. Although finance and accounting are the most frequent users of these reports, other top departments that use operational reporting regularly include:

Sales
Analytics
Customer Services
Human Resources
Marketing

Due to the nature of operational reporting, finance professionals find themselves creating many operational reports on a recurring basis. Half of financial decision-makers create recurring reports at least weekly, and 12% of respondents to our survey create some reports on a daily basis.

Among the recurring reports requested, finance teams most often cite accounts receivable aging, accounts payable aging, and daily cash flow tracking as the top three most common recurring reports.

Creating each of these reports comes with some challenges, but the reports most often identified as being problematic to produce are product expense by category, weekly forecasting, and revenue trends.

Tools in Use for Operational Reporting

The three most common tools used for operational reporting, according to survey respondents, are:

Microsoft Excel
Microsoft Power BI
Native ERP reporting tools

Overall, 76% of respondents use Microsoft Excel, likely because of familiarity with it. Microsoft Excel is a go-to tool for finance teams that manually generate their reports. Since almost one-third of respondents are still producing reports either all or mostly manually across all report types, Microsoft Excel is, by far, the most commonly used tool for operational reporting.

Forty-five percent of respondents use Microsoft Power BI. Among those companies with fewer than a thousand employees, 40% use this tool, whereas among companies with more than a thousand employees, use of Microsoft Power BI rises to 50%.

Thirty percent of respondents use the out-of-the-box tools available with their enterprise resource planning (ERP) tool.

These tools are all great tools for their intended purpose. But, remember the craftsman mentioned at the outset? If you are going to use a tool correctly, it must be used for its intended purpose. None of the tools mentioned above are purpose-built for operational reporting. Therein lies the problem.

Why Only 11% of Finance Professionals Are Happy With Their Tools

When asked to identify the challenges they face with operational reporting, 23% of respondents mentioned the fact that the tools they are using are not designed to handle financial data.

What does that mean in practical terms? Finance data has inherent dimensionality and typically has to be flattened into two dimensions for consumption by standard business intelligence tools. This requires finance teams to manually move the relevant data into a tool that allows them to manipulate and present the data in an understandable way. This may involve loading data into a data warehouse. In this scenario, producing reports becomes a time-intensive, demanding task. Furthermore, when you create a report in this way, the data is no longer linked to the source system, meaning that the report is outdated the moment it is created.

With no live link to source data, finance teams cannot produce real-time reports, nor can they drill down into the minute details that matter for operational reporting.

To make matters more challenging, some of the tools used require significant technical skills, which leads to a dependence on IT. Considering the sheer volume and velocity of operational reports required, dependence on IT makes timely report generation out of reach for many organizations.

How to Address Operational Reporting Challenges

What’s the takeaway for finance teams? It is clear that finance teams must think carefully about their choice of tools for financial reporting. To address the most common challenges, finance decision-makers should look for tools that:

Allow non-technical users to generate reports easily.
Automate recurring reporting.
Allow users to drill down to a granular transactional level.
Enable real-time access to source data from existing business systems.
Are purpose-built to handle financial data.

insightsoftware enables streamlined operational reporting for finance teams in multiple industries and geographies with tools that are purpose-built for financial and operational reporting. We work with companies globally to facilitate faster, more accurate reporting across the enterprise.

Operational Reporting: Trends, Challenges, and the Key to Success

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