In todays world of financial scandals and failed accountability systems, management must take extreme precaution to ensure their financial reporting process is carried out in a professional manner. The complex web of data and information that the financial reporting process produces can be daunting even for the best executives. In order for management to keep in touch with the financial status of the company and ensure that the financial statements are being compiled accurately they need a powerful reporting tool.
One such reporting tool that can offer management the perspective they need is the financial dashboard. A financial dashboard can rely on the information gathered in the financial reporting process to offer management a powerful glance of the financial vitals of the corporation.
The financial reporting process results in a large compilation of financial data that tells the history of the company from a numerical perspective. The integrity of such financial information needs to be upheld to rigid standards, especially for publicly owned firms. Recent legislation such as the Sarbanes and Oxley Act have tightened the rules around the financial reporting process and increased the stakes of accountability. Because much of the responsibility for reporting accurate financial statements falls on the shoulders of top level management, it is very important for them to maintain their understanding of the financial direction the company is headed.
Financial tools such as a financial dashboard allow management the ability to briefly view the financial information and vitals of the company on a regular basis. In this manner management is able to maintain a better feel for the financial health of the company as well as spot any financial discrepancies or warning signs that appear. When management spots a problem on the financial dashboard they can quickly move to rectify this issue before it gets out of hand, or worse yet grows into a full blown scandal.
By using the financial dashboard weekly, or even daily, management can stay on top of the financial issues that arise from operations. Rather than waiting hours or even days to become aware of a financial problem, now management has the ability to notice the problem in real time. This ability to recognize the problem right out of the gate affords them the opportunity to react quickly and minimize the potentially devastating consequences. It also helps restore managements faith in the financial reporting information their subordinates submit to them because now management is seeing all this information as it comes in. There is no longer the fear that the numbers will be changed before the information is officially submitted to management. Financial dashboards help management perform their duty to the shareholders of the company by ensuring their financial reporting process is carried out in a professional and accurate manner.