Tech can turbocharge your financial statements for business growth 

Financial statements are often considered routine tasks necessary for compliance, but they can hold untapped potential. When approached strategically, these data-rich documents transform into powerful tools for business growth.  

Thanks to modern technology, creating financial statements has never been more accessible or insightful. The right automation tools and real-time data access can help you make data-driven decisions that fuel success.  

This article will explore the critical financial statements and how tech can reshape their use and value. 

Here’s what we’ll talk about: 

• What are financial statements?
• Why financial statements are important for businesses
• How to use financial statement data to make better business decisions
• How using financial statements can help you grow your business
• Final thoughts

What are financial statements?

Financial statements are the backbone of financial reporting, capturing the essence of your company’s financial health.  

HMRC requires these documents in the UK for tax submissions and auditing, but their value extends far beyond compliance. These documents can serve as: 

• Vital tools for financial strategy, investment decisions, and cash flow management. 

• Key insights for guiding strategic business decisions, encouraging better forecasting and resource allocation. 

The old days: Manual processes and spreadsheets 

Even today, some people manually prepare financial statements using basic Excel spreadsheets. This was undoubtedly the standard approach in the past.  

Accountants and financial professionals would: 

• Collect data: gather financial data from various sources, such as invoices, receipts, and bank statements. 

• Enter data: manually input this data into spreadsheets, ensuring accuracy and consistency. 

• Analyse data: use formulas and functions in Excel to calculate key financial metrics and generate reports. 

• Prepare reports: compile the data into comprehensive financial statements, such as balance sheets, income statements, and cash flow statements. 

Manually doing this is time-consuming and opens your work up to human error. Still, there is a reason it was and is still being done this way—it is a detailed and customisable way to manage financial information. 

Challenges in manual financial statement preparation 

The manual nature of spreadsheets makes it difficult to draw out insights from financial statements quickly. Problems can arise with: 

• Data gathering. Collecting information from various financial statements (often in different formats) is time-consuming, especially when data is siloed in physical locations, for example, keeping paper documents, like invoices, in a file in your office. 

• Accuracy and verification. You may have to regularly check and recheck data to ensure it’s correctly entered to avoid mistakes. Everyone has off days when your eyes don’t always spot errors, even after several readthroughs. 

• Multiple calculations. Each type of analysis involves numerous manual calculations, which take time to do accurately. Maybe math or spreadsheet formulas aren’t your strong suit, and it takes you longer to figure these calculations out. 

• Complexity with size. If your business grows quickly, you’ll have more transactions and departments to manage, and your accounts will take exponentially longer to analyse manually. Your working hours keep getting longer to accommodate increasing demand. 

• Repetitive adjustments. After performing an analysis, you may need to repeat calculations with different scenarios or assumptions, which adds to the time burden. The amount of re-work is a challenge that can focus you on avoidable tasks rather than essential aspects of your role. 

How automation solves financial challenges 

Modern accounting software, such as Sage Accounting, simplifies financial statement work by automating traditionally manual tasks like tax calculations and data entry, freeing up more of your time.  

This shift brings significant benefits. 

• Increased efficiency 

Automation reduces time spent on repetitive tasks like data entry, freeing you and your team to focus on deeper financial analysis and strategic decision-making.  

What once took days can now be accomplished in hours, improving productivity across your finance department. 

• Enhanced accuracy 

Automation drastically reduces the risk of human error by minimising manual data entry.  

This ensures that your financial data is always accurate, providing a solid foundation for making sound, confident business decisions and avoiding costly mistakes. 

• Real-time insights 

Cloud-based systems provide instant access to up-to-date financial information.  

Whether you need to check cash flow or run financial projections, real-time data empowers you to make faster, more informed decisions that can positively impact your business strategy because you have accuracy on your side. 

Automation doesn’t just streamline compliance—it transforms financial management into a proactive, data-driven process, allowing you to react quickly to opportunities and challenges. 

Types of financial statements  

We’ll explain the main types of financial statements, why they are essential, and why it’s worth considering how automation and real-time data access with accounting software can make them even more helpful. 

1. The balance sheet 

This is a snapshot of your company’s financial position at a specific time, detailing assets, liabilities, and shareholders’ equity. 

Importance: helps you assess your company’s net worth, liquidity, and financial stability. 

How tech helps 

• Automation can streamline data entry and reconciliation, while real-time data access allows you to make up-to-date financial health assessments.  

• Advanced analytics can identify trends in asset use and liability management. 

2. The income statement (profit or loss account) 

Shows your company’s revenues, expenses, and profits over a specific period. 

Importance: provides insights into your company’s operational efficiency, profitability, and performance trends. 

How tech helps 

• Automated reporting tools can enhance accuracy and speed in generating income statements.  

• Real-time data access enables continuous performance monitoring, while analytics could forecast future revenue and expense patterns. 

3. The cash flow statement 

Details the inflows and outflows of cash within your company over a period. 

Importance: understanding your company’s liquidity, cash management, and financial flexibility. 

How tech helps  

• Automation can improve the accuracy of cash flow tracking.  

• Real-time data access can help you manage cash reserves more effectively, while predictive analytics could forecast cash flow trends and potential shortfalls. 

4. Statement of changes in equity 

This reflects company equity changes over a reporting period. 

Importance: helps track your company’s retained earnings, dividends, and other equity movements. 

How tech helps  

• Automated systems can ensure precise tracking of equity changes.  

• Real-time data access provides immediate insights into equity fluctuations, and advanced analytics can offer a deeper understanding of equity trends and shareholder value impacts. 

The role of HMRC compliance and tax efficiency 

Financial statements have always been crucial for HMRC compliance. You will always need to maintain accuracy to meet tax obligations.  

Now, tech boosts this process, supporting compliance and improving your tax efficiency. 

• Automated tax calculations 

Platforms like Sage Accounting simplify processes by automatically calculating VAT, corporation tax, and other tax liabilities.  

This automation significantly reduces your risk of human error, ensuring accurate tax reporting and helping you avoid penalties from HMRC for miscalculations or late submissions. 

• Optimised tax planning 

You should use real-time, up-to-date financial data to help you identify tax-saving opportunities, such as capital allowances and R&D tax credits.  

This readily available information helps you make strategic decisions that reduce your tax burden and improve cash flow. 

• Real-time compliance 

Cloud-based solutions like Sage Accounting can help you comply with HMRC’s Making Tax Digital (MTD) initiative.  

Your financial records are maintained digitally, and tax returns are submitted on time. Built-in compliance features provide peace of mind, keeping you ahead of deadlines and reducing the administrative burden of tax management. 

Tech transforms a time-consuming, manual process into a speedy, efficient operation, letting you comply with tax regulations while improving your financial strategy. 

Empower financial statements with tech for business growth 

Financial statements are crucial for more than regulatory compliance—they can be strategic tools to drive business growth.  

CFOs and financial professionals, like those at fast-growing companies, can use financial management tools like Sage Intacct to make a measurable impact.  

Here’s how technology can transform financial statements into powerful growth assets. 

1. Regulatory compliance 

Cloud-based financial platforms ensure that your financial statements adhere to essential regulations, such as HMRC and UK GAAP (Generally Accepted Accounting Practice).  

These platforms help eliminate manual processes after compliance changes through automated updates, ensuring your financial statements are always compliant without extra effort. 

• The benefit: automated compliance reduces the risk of errors and frees time for more strategic financial management tasks. 

2. Data-driven decision-making 

Financial statements can integrate AI, automation, and advanced analytics to provide predictive insights that help you anticipate market shifts and internal challenges.  

This empowers proactive financial management, allowing you to make smarter data-backed decisions. 

• The benefit: predictive insights help you stay ahead of uncertainty and seize new opportunities. 

3. Automated financial management for growth 

Accurate financial statements are foundational for success, but with the right tech, they can evolve into tools that fuel growth.  

Real-time analytical tools let you continuously monitor your company’s financial health, helping you identify cost-saving measures, refine investment strategies, and pinpoint expansion opportunities. 

• The benefit: real-time financial data lets you fine-tune your business strategies and react to market conditions faster. 

4. Investor and stakeholder relations 

Cloud-based financial platforms offer secure, real-time sharing of financial statements with stakeholders, ensuring transparency and up-to-date data access.  

This helps build trust and speed up decision-making during funding rounds or shareholder discussions. 

• The benefit: transparency with investors encourages stronger relationships and decisive action. 

Get IPO-ready with tech-boosted financial statements 

Let’s imagine Jane, the CFO of a fast-growing tech company, preparing for an IPO.  

As her company expands, investors demand transparency and real-time access to financial data. Jane has long understood the importance of detailed financial statements for gaining investor confidence, so she pushed the business to integrate Sage Intacct for streamlined reporting. 

With Sage Intacct, Jane’s finance team can now quickly generate key reports like cash flow statements, profit and loss statements, and balance sheets. These reports are vital for demonstrating the company’s financial stability during the IPO process.  

In one instance, Jane is asked to provide financial reports showcasing the company’s revenue growth over the past 3 years.  

Instead of manually compiling this data, which would take hours or even days, Jane’s team uses Sage Intacct to pull accurate and detailed reports within minutes, highlighting key metrics like profitability ratios and revenue trends. 

Armed with real-time financial statements, Jane can successfully demonstrate her company’s financial health and long-term profitability to investors on the same day of the request, gaining the trust and confidence needed to move forward with the IPO. 

Final thoughts 

Financial statements are more than compliance tools—they are essential for business growth when paired with the right technology.  

Automation, AI, and real-time insights can help you move beyond basic reporting and unlock strategic value.  

With modern tools, you can create financial statements that meet regulatory requirements, empower data-driven decisions, and ensure long-term success. 

Editor’s note: This article was originally published in 2022 and has been updated for relevance.