Ad hoc financial analysis and reporting built-in to financial statements

In many companies, the IT department creates a library of pre-built templates for generating static financial reports from the ERP.These reports present data in a standardized format and layout, that are commonly customized or analyzed further in excel spreadsheets by the finance team.

The decision-maker receiving the report often requires more information or wants to drill down to specific data. In such cases, they have to come back to the finance team (or the IT team) to generate more static reports. Now with new self-service ad hoc reporting tools in financial statement software, it is possible for end users to carry out on demand financial analysis about particular areas of interest – such as profitability of products or customers– to quickly make data-driven decisions or understand their own financial performance.

Why static reporting slows you down

In today’s dynamic business environment, decisions makers face business data challenges. They need access to large, consolidated data sets which they can drill down or through to uncover or diagnose situations, to make informed decisions.

While standardized financial reports may fulfil the usual reporting requirements, they often can’t handle unexpected data requests. If the finance team is tied up with daily tasks and doesn’t respond in time, it may unnecessarily delay getting back to the customer and making crucial decisions.

Organizations may lose out on opportunities to gain a competitive edge and serve their customers or take advantage of favourable circumstances. Ad-hoc financial analysis built into financial statement reporting can open up financial analysis to a broader audience because it is fast and can be presented clearly.

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What is ad hoc financial analysis?

Ad-hoc financial analysis means a review which hasn’t been planned before but has become necessary to fulfil a particular need - a one-time or first time financial data report. It can include preparation of a financial report to:

1. Analyze particular data which hasn’t been considered previously; or
2. Answer a specific business question which hasn’t been asked before.

Ad hoc analysis tools let the finance team generate custom financial reports or even sales or branch managers to also get involved as technical SQL or data analyst know-how is not required. Since rows, columns and elements of these reports are fully customizable, it’s easy to build dashboards, interactive maps, and other data visualizations to communicate in-depth analysis.

How to create ad hoc financial reports

You can create ad-hoc reports in Phocas Financial Statements by:

1. Cloning an existing static report, make changes to it without affecting the original reports, and customize the report according to your requirements; or
2. On a blank reporting canvas, pull data from various data sources and present them as you want.

Phocas Ad-hoc financial reporting has two major benefits:

Drag-and-drop interface: Non-technical users don’t have to run any kind of script or code to extract data. The drag-and-drop interface lets you create reports hassle-free.

Up-to-date data: Unlike a static reporting system where any adjustment/ alteration in data makes the current report outdated, the customized reports, offered by an ad-hoc financial reporting system, always reflects up-to-date data because it’s connected to your ERP.

Ad hoc analysis of the income statement

The monthly income statement (profit and loss) outlines a detailed and in-depth picture of a company’s financial health.

However, sometimes, the decision-makers or business people users may ask for some specific numbers urgently. With ad hoc financial analysis tools, you can easily provide them as well as monitor key financial kpis and metrics throughout the month.

Two ratios that are worthwhile to monitor on an income statement dashboard are: Gross Profit Margin Ratio and Net Profit Margin Ratio.

Gross profit margin ratio represents the percentage of gross profit that the company earned for each dollar of sales. Gross profit is one of the most underused areas of the income statement. So by displaying the ratio in a dashboard that can be reviewed regularly and by calculating and comparing it to the net profit margin helps you understand the cost of doing business. If the ratio starts to vary and your margin falls it’s an indication that an area of the business is not being managed well.

Ad hoc financial analysis is one of the many advantages of implementing specialised business intelligence  and financial statement software. When business decisions need to be made – from how to adjust pricing to when to chase customers for payment – the numbers are at your fingertips.