Financial Reporting Software

Financial reporting software removes much of the tedium from the process of developing internal and external financial analysis. The old days of ledger bookkeeping are long gone in larger companies. Today, data is stored on computers and software enables accountants and controllers to pull up current information from the database and analyze it for reports.

This electronic process has several advantages. First, it prevents errors from entering the accounting process, at least, errors resulting from fatigue or understandable human error. Second, it enables the accounting department to rapidly produce an income report or inventory breakdown. Third, by saving time, it permits the department to attend to other responsibilities, such as setting up internal controls to prevent embezzlement or fraud.

Sending Reports to the Government

The Securities and Exchange Commission (SEC) requires publicly-held companies to report annually on their financial condition. Financial reporting software allows companies to file electronically directly into the SEC's database, Electronic Data Gathering, Analysis, and Retrieval (EDGAR). Annual financial statements run to many pages--not light reading.

Actually, this financial reporting is not really meant to be pored over, line by line. Certain standout sections and lines will inevitably draw attention, but for the most part, shareholders, for example, accept summaries of financial activities. These detailed statements are meant to be archived in EDGAR as a formal, official record of a company's financial reporting methods and conclusions.