Emerging Trends in Financial Consolidations

Enhancing Financial Reporting with Modern Trends

Increasingly automated business accounting processes are yielding results beyond faster transaction processing and driver-led allocations. Reports, particularly those of financial consolidations, are becoming more dynamic and more useful in assisting us with information to make better operational decisions. Whether you have a complex business structure or not, you’ll benefit by moving your organization toward implementing these newest trends within your financial consolidation and reporting software package.

Natural Language Processing

One of the biggest benefits of artificial intelligence in financial statements is the use of natural language. We’ve gotten used to typing nearly full sentences/questions into Google to get our results without having to pull out whatever keyword we think it might want, and similar activity is happening within accounting software solutions. Complex or jargon-filled communication isn’t helpful if we want the readers of consolidated reports to grasp what they need quickly. Plant operations managers have excellent skill sets, but their training and experience may not have included a deep understanding of financial terminology. A somewhat humorous byproduct of the transition to the adoption of plain language by the government is how it actually expanded the length of many of its instruction booklets.

Visual Appeal

Implementing design elements into consolidated financials that include white space, bullets, charts, and graphs aren’t just for prettier reports—they serve a good purpose. If you’ve been avoiding updating the look of your financials, you may want to reconsider. Enhancing a reader’s ability to process information, whether it’s through comparisons or the terminology that is used, benefits us all. The recipients of the financial reports will gain more confidence in understanding the data being conveyed, which should also result in them being more accountable when explaining the results and preparing future budgets.

We’ve become a nation of skimmers. Whether we’re reading the Wall Street Journal or our Twitter feed, we’re glancing at headlines, picking up keywords, and moving on to the next thing. Including visual elements in our financial statements (and anything else we produce) helps create more engaged readers who are better able to focus on the key points we want to emphasize and allows them to stop and start reading without losing their place.

• White Space: This gives your eyes a place to rest.
• Bullets: Emphasize key points within a subject area.
• Charts and Graphs: Visuals that show relationships between values or time.

Footnotes and Cross-Referencing

What would financial consolidations be without footnotes? A lot shorter, but not quite as useful. Explaining exceptions, references, and providing additional detail is a fundamental need of financial consolidations. How are the entities rolled up? What allocation methods were used? What’s that accrual for potential litigation about? Important stuff. With digitally viewing financials in the cloud or on your intranet, drilling down to more detail is one of the capabilities that truly enhances a user’s experience by instantly providing supporting detail to the numbers. That, in turn, resolves misunderstandings, discrepancies, and anomalies more quickly, letting people spend more time working on the present and future rather than reviewing the past.

Implementing the Trends

Adopting these trends in your business will continue your advancement toward making your financial consolidations not just a report that is tossed on a desk after a cursory look but a useful reference tool that builds value with its communication of financial and operational facts.

By integrating natural language processing, visual appeal, and effective use of footnotes and cross-referencing, you can transform your financial reports into comprehensive tools that aid decision-making and operational efficiency. These modern trends in financial reporting not only enhance the clarity and accessibility of information but also ensure that the reports are engaging and actionable for all stakeholders.

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