- Creating a custom report from a client’s accounting software may take more time than the client is willing to pay for.
- Reporting tools that automate report creation highlight the most important results and have easier-to-use interfaces.
- It’s important to match the right reporting app to your client, as different apps offer different features.
How can you help your clients make the best business decisions? The better a business owner understands the levers that control financial performance, the easier it is to turn negative events such as pandemics into unrivalled opportunities.
Many accounting firms wanting to provide this sort of advice have found it takes too long to pull out enough insight from accounting software that a client is willing to pay for. Reporting tools promise to automate the report creation process for firms, increasing the margin the firm makes on its advisory service.
While a firm could create custom reports within the client’s accounting software, reporting tools help highlight the most important results with nicer graphics and easier-to-use interfaces. And they aim to use less technical language that’s easy for non-accountant business owners to understand.
The local market for online reporting apps is led by three majors: Spotlight Reporting, Fathom and Futrli. The first two have been around for more than a decade, Futrli a little less. All three provide management reporting, forecasting, KPI dashboards and consolidated reporting for accounting firms at a monthly cost of A$35 or less per company. Bulk licence deals for 100 companies or more can drop that to below A$15 per company.
While the three apps have all expanded to cover similar functionality, they retain their original strengths. The original Spotlight Reporting app was built to make it as easy as possible to churn out good looking management reports as PDFs. It was the first to expand into consolidated reporting for multi-franchises and can handle up to 500 entities.
Spotlight Reporting cemented its position as king of consolidated reports with the addition of consolidated forecasting for up to 75 related entities. This puts Spotlight up against much more expensive enterprise-grade software.
Matching the right app to your client
When it launched, Fathom took the opposite tack to Spotlight Reporting’s printed reports with a dazzling online array of KPI wheels and sliders and waterfall charts. The idea was to turn a client financial advisory session into a journey of exploration. Fathom then added a report builder for PDF management reports, consolidated reporting for up to 300 companies, on-the-fly benchmarking and forecasting.
Fathom introduced the concept of microforecasts that measure the effect of minor events, such as hiring staff or purchasing an asset, and act as building blocks for the overall forecast.
“Different apps work for different people even though they’re generating reports from the exact same data,” says Anita Da Encarnacao of BookStar, a Sydney-based firm that specialises in cloudbased bookkeeping.
"Different apps work for different people even though they’re generating reports from the exact same data."
Fathom’s crisp and simple interface is highly interactive and feels like the “future of reporting”, she says. “Fathom is awesome if you’re working with CFOs or managers who want to actually get involved and look around, click on the icons and be self-sufficient with their reporting.”
However, a lot of Da Encarnacao’s clients prefer Spotlight Reporting’s conventional board reports that show a snapshot of the company’s position. Da Encarnacao also uses Spotlight for consolidated reporting as part of BookStar’s bookkeeping service. Spotlight Reporting’s inter-entity eliminations edit out cross-company charges and she merges multiple accounts without editing the accounting data in Xero.
“It’s really quick and easy to have the different Spotlight display names and you can merge all travel expenses from 10 different charts of accounts into one line for a bird’s-eye view of the data,” Da Encarnacao says.
Futrli’s plain English approach
Futrli, first known as CrunchBoards, created simplified dashboards for business owners rather than their accountants. The original product is now named Futrli Advisor and the company recently released Futrli Portfolio, a benchmarking tool that segments a firm’s client base by traffic-light performance indicators.
Futrli Portfolio generates health scores based on a client’s predicted cash flow and operational performance, as well as talking points and actions for accountants to take with each business owner. The tool can also create a risk profile for the accounting firm itself based on an in-depth analysis of each client.
Futrli invested heavily in Futrli Predict, a forecasting software for small businesses with fewer than 25 employees. Predict uses AI to create a three-year forecast and live view of predicted cash at hand, profit, sales and tax payable.
The algorithms in Futrli Predict will identify trends, seasonality and external impacts (such as pandemics!), and attempt to answer questions in plain English such as, “Why am I selling more but still struggling to pay my tax?”
Spotlight Reporting and Fathom have invested heavily in resources to help accountants deliver advisory services. Spotlight Reporting has a certification course, an ebook by founder and CEO Richard Francis FCA on how he runs his own advisory practice, training videos and a “partner success centre”.
Fathom launched its own adviser certification course in March this year and delivers accountant focused videos and blog posts on its education platform, Advisable.
Other reporting tools
Challengers to the big three include the popular South African-based, online dashboard tool Syft Analytics and Australian veterans of the reporting scene, Calxa and Castaway. For firms with a large number of clients using MYOB or Reckon desktop accounting software, Calxa and Castaway are both strong contenders.
Dedicated cash-flow forecasting tool Float also has a strong following and bulk discounts for accounting firms. New Zealand-based Figured, which provides customised planning, budgeting and forecasting for farms, is another notable tool.
Even the most avid user of reporting tools, however, will need to fall back to the humble spreadsheet because it remains the most flexible and powerful reporting tool available to any business or accountant.
A small group of integration tools such as G-Accon and DataDear can create real-time updates of live data from accounting software in Google’s online spreadsheet Google Sheets. BookStar’s Da Encarnacao uses G-Accon to create weekly, daily or even hourly reports based on P&L, sales accounts or customer reports.
“If a client just wants a weekly sales report emailed on Monday morning, I use G-Accon and Google Sheets to generate that automatically, and then we’ll build on that,” Da Encarnacao says.
Taking the Power BI route
One trend to watch is the growth of business intelligence tools, in particular Microsoft Power BI. Power BI combines the flexibility of a spreadsheet with the visual appeal of a dashboard, and can draw data from almost any business software. The downside is that all this power increases the complexity of using the tool.
Accountants will inevitably move to Power BI because its depth of analysis is so valuable for clients, says Inbal Steinberg, head of innovation and technology at Melbourne advisory firm BlueRock
“When you sit with a client and show them a report, the client is going to ask questions. What’s driving that number? Is it because of the wage cost, a particular product, or the time of day?
“You want to be the analyst that can rewire that report and say, right, let’s see what’s going on with the sales there.” BlueRock is hiring data analysts with experience in Power BI and training its accountants in advanced Excel skills and Power BI.
Etani, a business founded by Cameron Lynch CA, helps accountants make the jump to Power BI by providing training and pre-built integrations for accounting software and inventory, project management and payroll software.
As the world moves through pandemic-inspired disruption, there’s never been a greater need to advise clients about their options.
How Bean Ninjas is evolving its client reporting
Meryl Johnston CA has some advice for firms looking to automate their management reporting. “I love automation,” she says. “But I actually think people automate too early.”
Picture: Meryl Johnston CA.
She recommends improving the reporting process by eliminating anything that is not absolutely essential. “Then you automate the remainder.”
Johnston has been through many iterations of reporting at Bean Ninjas, an accounting firm that specialises in e-commerce companies. A year ago, the Bean Ninjas team put in a lot of effort to create reports for clients but Johnston could see they weren’t even opening the emails.
She realised she needed to improve the experience and make the reports more visually appealing to non-accountant business owners.
Johnston signed up with Futrli, which highlighted essential metrics in an uncluttered interface.
The firm also experimented with sending clients short videos (using screen capture tool Loom) where the bookkeeper talked through the report’s highlights.
Clients responded positively but the firm ran into problems as they began building more complex cash-flow forecasts.
“When you work with clients, you build [the forecast] and they give you feedback. We realised we are much faster and more confident in the accuracy of the changes if we just go back to a spreadsheet,” Johnston says.
Today, Bean Ninjas sends most of its clients a PDF of a customised report pack made in Xero with a Loom video discussing the highlights.
About 10% of clients on the top CFO package receive weekly meetings with customised reports in Google Sheets that blend non-financial and financial data.
Bean Ninjas cancelled its Futrli subscription and uses Fathom with a couple of clients. Johnston says the next step is to further improve the management accounts and probably move more clients to Fathom.
“Our weekly reporting in Google Sheets has got all the data, but it doesn’t look as beautiful as something that Fathom can create,” she says.
What you need to know about seven popular business insight and financial reporting apps
|Product||Description||Target segment||Cash-flow forecasting||Budget forecasting||How frequently does the app sync with accounting software|
|Castaway Cloud||Castaway is a comprehensive cash-flow forecasting software. Its three-way reporting and modelling approach retains the integrity of forecasts with double-entry accounting. Reports and dashboards help tell the story of a business.
||SMEs and their accountants and advisers
||Fathom is an integrated solution that lets users track, visualise and understand business performance and KPIs. It performs three-way cash-flow forecasting and creates custom management reports that present results in a clear and compelling way. It easily consolidates results from multiple companies and can compare and rank companies, franchisees or clients.
||Businesses and their advisers
|Float Cash Flow Forecasting
||Float gives an accurate picture of past, current and future cash flow and allows users to drill down to any movement in a forecast to see the specific transaction driving it. Flexible budgeting lets users create forecasts and scenarios for any business situation and track these against actuals pulled through from the accounting platform.
||Start-up/scaleup founders, financial controllers, virtual CFOs, bookkeepers and accountants
||Futrli guides better business decisions by taking all the financial data that a business creates to build accurate financial predictions. It assists SME owners to make plans for the business’s next month, quarter and year.
||Microsoft Power BI is a suite of business intelligence, reporting and data visualisation products and services. Power BI can help connect disparate data sets, transform and clean the data into a data model and create charts or graphs to provide visuals of the data.
||Large, enterprise, corporate entities and SMEs when scaled
||Yes||Yes||Daily with integrations, e.g. Etani
||Spotlight Reporting is a powerful management reporting tool designed to help clients or businesses make informed decisions. It can consolidate up to 75 client organisations with multiple currencies. It includes an extensive chart gallery with templating, customisation and whitelabelling options. Users can drive action and share insights with an action plan and pre-populated executive summary. Spotlight Reporting integrates with leading accounting systems and Excel.
||Accounting firms, business owners, CFOs, franchises and not-forprofits
||Syft Analytics is a financial reporting and data analytics app that integrates with accounting software. Syft provides clear visualisations of complex financial information, making data easier to understand and act on. Features include forecasting and audit tools, HQ overview, automated reporting and graphical visualisations.
||Accountants and bookkeepers