Data usage: Automated General Ledger, P&L and Tax Process

We have talked a lot on this blog about how to get the data sorted and ready for use. The questions that logically follow must be:

“So what? Why do all of this? Why make the investment?”

Yes, data driven decision making and accurate reporting are powerful motivators but let’s talk specifics.

Data and finance should be the very best of friends but more often than not, the poor folk at the coal face of the finance function spend way too much time and effort wrestling with data in Excel.

Excel is the right tool for so many things. The power and flexibility it affords a competent user is unmatched, hence its universal adoption. However, there are some things that really should not be done in Excel. At a certain scale, Excel fundamentally won’t work. Before that point is reached though, there is a much better, safer way of handling the data.

If your general ledger, P&L and tax processes are generated using Excel, you should definitely read on. In fact, if your general ledger and P&L are generated without a data warehouse, you should read on. Probably best to play it safe and read on.

The components

Whatever it is your business does, there are obvious data sources that necessarily feed into a P&L. Costs from your finance software (Xero, Sage etc), HR system, project management software, CRM and marketing platforms, an ERP system. Revenue from your finance platform, transactional database and/or web tracking platform.

One way or another, the task is to combine all of this data, apply the business logic necessary to calculate your P&L and create a general ledger and the subsequent company financial statements.

This is laborious. But it needn’t be.

Every step described above can present a significant hurdle. Extracting data manually from each of those sources, coping with row limits in Excel, utilising vlookups, pivot tables and macros – all of this adds up to a tedious, manual process, fraught with the danger of introducing errors.

Data automation flowchart

Automate for the win

There is a phrase that comes up again and again when we talk to clients and prospects.

Do it once, do it well.

By pulling data automatically from each of those sources, you can centralise your data over night, every night. The logic that currently sits in Excel and requires careful manipulation each time (side note: what happens if the person or people who do this leave??) can be written once (in SQL of course), scheduled and output in the early hours. Every
day, your general ledger and P&L updates for the previous day.

On top of this, with the logic in one place, well structured, documented and tracked, handling significant complexity and changes that inevitably arise with rapidly growing businesses becomes trivially simple.

No more manual work. No more human error.

Dedicate that internal resource to analysing the output, rather than producing the output. Trust us, they will thank you for it, possibly even more than your board, your investors and your decision makers.

Want to know more? We’d love to chat. Please ​get in touch