Producing a multi-currency report in 7 basic steps
Posted by Sjoerd-Jaap Westra
You have many individuals providing input when you create a multi-currency report for board members or satellites, but the information they provide may introduce inconsistencies that can throw off your figures. You might also run into challenges with currency conversion, as inconsistent or averaged numbers can create a report that's not as concise as it should be. Your multi-currency reports shouldn't be a cause for stress within your organization. Here's how to produce an accurate, concise and useful multi-currency report in seven basic steps.
1. Pre-define financial reporting dimensions
You need to start on the same page with every individual who is inputting data. If you don't have the right data when you're creating your reports, you're going to end up with inaccuracies and other issues in your report. By starting off with the same financial reporting dimensions, you increase your chances of presenting a concise and accurate report. You can also add compliance requirements in this step so you don't have non-compliant data causing issues with your reports later on.
2. ERP integration
Many entities work with enterprise resource planning systems for their accounting measures. These entities may use separate ERP systems or operate on the same solution. Look at the data export and integration capabilities of the ERP solutions when you're working on a multi-currency report. You can cut down on the potential for human error and inaccurate reporting by exporting data directly from the system instead of asking individuals to manually input the data. When you streamline your business processes in this area, you can improve accuracy and eliminate data input issues. You may need to standardize the data-exporting formats generated by these solutions, as they may offer a broad range of options that send more financial data than you actually need for your reports.
3. Stay in communication
Even with ERP integration and other business process automation, you may need to touch base with the individuals who are providing input for the report. Look for streamlined communication methods that make it easy to stay in contact with people, even when they're across the globe. You need real-time options to work out any issues with your multi-currency report, so having the option to set up a virtual meeting can help you collaborate efficiently and effectively.
4. Visual reporting
You can't always catch problems with compliance when you're looking at black-and-white figures. Sometimes you need a visual element to help you identify problems with your data before you spend the time generating your reports. Look at several visual reports throughout this process to catch problems early on. That way you can more easily find the problems before they make it into reports, saving everyone time and resources that are often spent fixing problems after the fact.
5. Consolidated reporting
Consolidated reporting is one way to cut down on the amount of inaccurate information that can make its way into your report. When you consolidate your information into a single system, you can make adjustments based on a single set of data instead of working through multiple financial inputs. A system like Unit4 Consolidation software provides features such as handling GAAP and IFRS, automates complex accounting consolidation and uses built-in consolidation logic to minimize the amount of hands-on time you need to spend in this step.
6. Automate currency conversion
Handling currency conversion manually takes a significant amount of your time and resources, especially if you're using historical currency conversions for your reporting time periods. Automating your currency conversion makes it easy to create a multi-currency report that's accurate using both historical and current exchange rates. You won't need to bring on additional staff and push back reporting deadlines to look all the information up manually once you have the right system in place. Automated currency conversion also cuts down on estimating an exchange rate for a particular accounting period if the historical data is difficult to find.
7. Drill down figures
Once the multi-currency report is produced, drill down through the provided figures to check for any problems with the currency conversion. At this point in the reporting process, you should have accurate data that is converted at the correct exchange rate for the time period. When you can drill down through the figures, you provide more financial visibility for board members and for yourself. Audit tools also assist you with picking up any problems that potentially made it through the cracks, although in most cases, any problems get picked up in the consolidation step.
Your satellites and board members have an easier time relating to financial reports that are available in their home currencies. Instead of dealing with inaccuracies when you produce a multi-currency report with input from multiple individuals, you can use this seven-step system to streamline the process and provide the most up-to-date and accurate information. By following these steps, you eliminate the need for additional time and resources to track down the problems, as you handle most of the problems through data integration and consolidated reporting. Give your corporation the financial reporting they need, when they need it, with an efficient and accurate reporting process.