Can financial report production be automated?
Efficiency question :
Yes, financial report production can be automated. Financial data naturally contains several elements that make it easier to structure, particularly periods and general ledger accounts.
Periods make it possible to segment data over time and produce financial statements for a defined period. General ledger account numbers can also be used to structure information. They are often made up of a series of digits whose first characters identify an account category, making it possible to group data automatically and create a dynamic display.
These characteristics make it possible to build financial reports that refresh from available data instead of having to be rebuilt manually for every period.
Key considerations:
A common issue arises when different sources do not use the same chart of accounts. For example, a company may use one chart of accounts for actual data and another for budget data.
A mapping table can then be created to establish links between the different accounts and allow them to be grouped within the same report.
The same situation occurs when consolidating the financial statements of several companies. When the entities do not use exactly the same accounting structure, a mapping table can standardize the accounts before consolidated financial statements are produced.
Challenges:
When data comes from several sources, transformations are generally required before it can be compared or combined.
Dates are a good example. Two sources may store dates in different formats that are not directly compatible. They must then be transformed into a common structure before they can be used in the same calculations and reports.
Power Query can retrieve and merge the different data sources. Its M language can also perform the required transformations, including standardizing date fields and making the data comparable.
Technology:
Power Query is particularly well suited to automating financial reports. It can retrieve data from different sources, transform it, merge it, and prepare it before it is used in financial statements.
When specific display or automation requirements are needed, VBA can complement the process. This programming language built into Microsoft Excel can automate certain actions and customize how reports operate or are presented.
The combination of Excel, Power Query, and VBA can therefore create dynamic financial reports that refresh from new data.
Developer's advice:
Automating financial statements requires a high degree of rigor. Faster production must never come at the expense of data integrity.
For this reason, we very rarely automate financial statements without also creating a control report. If financial statements are produced by period, for example, the control report should verify that all periods together equal the annual total. These checks help confirm that the data used and the results produced remain consistent.
For maximum flexibility, also favor reports that use a start date and an end date rather than creating a different report for every month or period.
A single report can then produce results for the selected period. This approach makes financial statements more dynamic and makes it easier to meet future needs without unnecessarily multiplying reports.