Accounting is a fundamental aspect of business life, not only in terms of fulfilling fiscal and declarative obligations but also as an essential source of information that should be considered when making strategic decisions, supporting and aiding decision-makers in their resolutions.
Accounting has significantly evolved over the past decades, shifting from a purely fiscal and administrative view to playing an increasingly important role in financial analysis and consultancy for organizations.
Today, accountants must also possess a critical mindset that allows them to analyze a company’s accounts, thereby advising their clients in the best possible way by adopting a more proactive rather than reactive stance. This is where reporting comes into play.
Nowadays, a balance sheet or an income statement is no longer sufficient. There is a greater demand and need for more information from managers and administrators, particularly regarding business optimization from both a management and fiscal perspective.
This is when the accountant can make a difference by preparing reports that go far beyond financial statements. Using their technical knowledge, they should thoroughly analyze accounting information from A to Z, using cost and revenue analyses, budgeting and controlling respective variances, calculating profitability, evaluating cash flows, assessing investments and projects, making projections, and more.
Reporting serves as a reflection of the company’s economic and financial situation and, when prepared periodically, provides companies with a clear view of their financial health. This helps answer crucial questions such as the likelihood of closing the year with a profit or loss, whether to proceed with team reinforcements, or even consider making significant investments.
It is also important to note that preparing and compiling this information can present some challenges. Challenges can vary, from difficulties in obtaining complete information promptly to constant changes in tax legislation.
An equally important factor is the expectations that managers/administrators have regarding reporting. It is crucial for the accountant to understand their concerns, often having to direct them to significant issues that they may not yet be aware of.
It is also of great importance for the accountant to act as an interpreter of the presented numbers to ensure the information is well understood, adopting a pedagogical stance.
It is well known that technological evolution has played a fundamental role in accounting, and in this regard, technology is an essential tool in the preparation and streamlining of the reporting process.
Tools such as Excel and accounting software have made the process much more efficient, saving time and reducing the possibility of errors. Automation, artificial intelligence, automatic data reading, and ERP systems with advanced functionalities have also been crucial to the evolving role of the accountant, making them an increasingly pivotal element in organizations.
Artificial intelligence, in particular, has the potential to perform calculations and analyses quickly and accurately. However, as mentioned, it can be challenging for accountants to accept that AI can perform tasks that were once exclusive to them.
Adapting to these technological changes is a future challenge for the accounting profession. It is important to view technology as an ally rather than a threat.
In summary, financial reporting plays a crucial role in business decision-making, and technology plays an increasingly important role in producing accurate and relevant financial reports. Technological evolution, including artificial intelligence, will continue to shape the field of accounting and financial management in the future.
