When evaluating a business’s financial health and performance – the numbers don’t lie. But how can companies and investors obtain the correct data to gauge their business growth over the years? That’s where the importance of financial analysis of statements comes into play; however, the process is often resource-intensive and time-consuming.
In this article, we’re looking at how Commspace improves the accuracy and completeness of financial data, identifies trends and patterns faster, and provides better insights into business performance. Here’s how.
The importance of financial statement analysis for businesses
Apart from assessing your business growth and performance, there are other critical reasons why an annual financial statement analysis is vital within a company. Some of the most significant reasons include:
- Provides an unbiased view of the financial condition of a business, which aids objective decision-making.
- Accurate and in-depth financial statement analysis on a year-to-year basis can help identify trends, buying patterns, and areas for improvement.
- Frequent financial statement analysis can provide a more accurate overview of a company’s financial condition, including insight into real-time profitability and long-term health.
However, despite the importance of year-over-year financial analysis, it doesn’t come without its fair share of challenges.
Financial statement analysis: The process
When it comes to reaping the benefits of yearly financial statement analysis, it all hinges on the accuracy and depth of your data. Unfortunately, obtaining and collating the correct data for an accurate year-over-year comparison isn’t always an easy task. Some of the most common challenges that hinder the process are as follows:
- Manual processes: Manually obtaining, collating, and reviewing the data can be a time-consuming and resource-intensive process that’s prone to human error. Many small businesses simply do not have the time needed to manually comb through data without disrupting critical workflows and processes.
- Data is difficult to digest: Financial reports and statements often use vague language and dense data, making it difficult for team members to understand without the proper training in accountancy and finance.
- Financial statements aren’t adjustable: Simply relying on financial statements limits businesses from getting a holistic view of their performance. Rarely does it consider external factors that could impact the accuracy of the financial performance analysis.
Make data-driven decisions with Commspace
Fortunately, your business doesn’t have to settle for the common challenges of assessing yearly financial performance. Instead, scale your business with a tool designed to adapt and grow with you and your business. Through Commspace’s unique data analytics and reporting capabilities, businesses can automate the year-over-year comparison process while benefitting from deeper insights into their financial performance. How? In brief, Commspace streamlines the entire financial analysis process through the following:
- Improved accuracy and completeness of financial data
- Faster identification of trends and patterns
- Industry-specific insights into business performance
Designed to adapt and grow with you and your business
We dislike redundant, manual processes as much (maybe even more) as you do. This is why Commspace provides everything you need for exceptional revenue management in one solution.
- Automatic Data Classification
Automatically classify all fee information into predetermined categories based on industry best practices.
Cover your common reporting needs with an easy-to-use integrated report builder, allowing custom report creation without vendor assistance.
- Visual Analytics
Integrated, interactive visual analytics allows users to easily analyze trends, spot unusual spikes, and discover exceptions in their revenue data.
Ready to manage your revenue streams and yearly financial statements in one fell swoop? We offer specialised commission management and revenue analytics for Financial Advisers in the Life, Investment, Health, Short Term and Employee Benefits sectors.