Provision of financial information: from on-time to real-time
We see, read and process new information every day, which is nothing particularly new, really. After all, even our grandparents processed information daily while reading the newspaper or, later, when watching their black-and-white TV. What has changed, however, is the speed at which we send/receive the information. IDC, the International Data Centre, predicts that by 2025, the collective sum of the world’s data will grow to 175 zettabytes, up from 33 zettabytes in 2018. Previously, it was predicted that real-time information provision would become the norm because so much information would need processing, and this is exactly where we are now.
Nowadays, it is impossible to imagine a day without access to real-time information. Where would you be without Google Maps? What would happen if your mobile banking app showed you out-of-date information? Indeed, real-time information provides us with the most up-to-date information, and without this, we would be well and truly lost. So, how does this work within entire organisations? Are departments taking advantage of the provision of real-time information? In this blog, Bert van der Zwan, CEO of fintech company Onguard, discusses what happens when the finance department starts working in real-time instead of on-time.
The tenth of the month
Currently, financial departments all work ‘on-time’. Every month, companies share financial reports, consisting of the progress of KPIs, with the interested parties. This is usually the tenth working day of the following month because this gives financial departments enough time to gather all figures and hand them over to management, the directors and the shareholders, for example. Businesses make important organisational decisions based on these figures – which would be a month old already. But if you ask me, it’s time to switch to real-time information provision so that everyone can work with current figures.
The digital revolution we are currently experiencing makes it possible to make decisions based on real-time information provision. However, to be able to do this, it is important that the data (or information) flow within organisations is sufficient. The FinTech Barometer 2019, our yearly survey amongst finance professionals, shows that data plays a part in 39 per cent of organisations, so we don’t have to worry about whether there is sufficient data available. The trick is to actually make this data available in real-time.
Real-time information with monthly recap
Currently, almost a third (30%) of finance departments report on a monthly basis. Nearly one in five (19%) expects in the future to be able to report financial data in real time. Still, over 25% are convinced that monthly reporting will remain the standard. I would anticipate that a recap would be issued every month. However, the fact that reporting will still primarily take place monthly over the next few years is surprising, as leaving real-time reporting by the wayside is a missed opportunity.
This is especially the case considering the amount of data we are gathering from customers and from the market. Systems are increasingly ready to bundle all important information from the organisation and make it visible in real-time. For a CFO, a single overview with all real-time information makes it easier to carry out thorough analyses and make fact-based decisions. It also removes any worry about whether or not information is up-to-date and enables the organisation’s financial situation to be seen at a glance. In this way, it becomes much simpler for the CFO to make adjustments.
Thanks to real-time information provision, organisations can know what is going on instantly, especially where finances are concerned. If you ask me, this is an incredibly valuable addition for any organisation.