|Type of paper:||Essay|
|Categories:||Business Financial management|
Formerly, organizations used to analyze and update their financial reports and data either on monthly, quarterly, semi and annually basis. This meant that such institutions had to wait for such periods to make a decision, or notify any changes in the operations of the enterprise. However, due to the recent development in technology, real-time reporting emerged. This process involves recording, analyzing, and reporting the organizations' proceedings as they occur (Seele, 2016). This means that the management of companies utilizing the real-time reporting can access their financial data and business proceedings as they happen. Thus, this indicates a contrast from the former approaches, which subjected the management and stakeholders to prolonged periods before they could access final enterprise's data and reports.
The emergence of real-time reporting was initiated by the demands from stakeholders to access the current proceedings of an organization. This has resulted in the need for the institutions to post their financial operations at a faster rate, and ensuring that stakeholders such as the investors can access such data at a speedy and on a regular basis. They raised the problem of the extended time lag between the publication dates, which delayed their decisions especially on the determination of the profitable fronts to venture into during such periods. Such demand attracted the attention of regulatory enterprises such as the SEC to regulate and ensure that the report intervals were reduced to a maximum of two months for all corporate reports (FSN, 2009). This enhanced and provoked such enterprises to allow their stakeholders the access to its financial on a more regular basis, thus enabling them to undertake hastened investment through the utilization of the established earlier publication deadlines. Nevertheless, according to the ACCA (2013), investors associate real-time reporting with the provision of better conceptualization of the excellent management, governance, and the business performance. Thus, this enhances the promotion of transparency and building confidence between the investors and the stakeholders.
Moreover, as the competitive levels in the business environment increase, enterprises are demanding more reliable and up-to-date data to enhance faster decision-making. The management has to be keen on the various changes and trends in the market, which enables them to adapt and utilize the identified opportunities to attain competitive advantage. Hence, for such executive to undertake such actions, they have to access updated financial data on a regular basis. This enables them to manage the scarce resources efficiently, and adopt the most favorable strategies, which would assist such an organization to increase its productivity and profitability in the market (Trigo, Belfo, and Estebanez, 2014). Thus, this statement outlines the importance of real-time reporting, and how managers can utilize the recent data in the decision-making process.
Implementation and Trends in Real-time Reporting
Real-time reporting is actualized through the utilization of modern technologies such as the Business Process Management. Such innovations have facilitated the scrutiny of various organizational processes, which in turn facilitate the generation of financial and other business-related reports from its day to day activities. This program is enhanced by the utilization of Business Activity Monitoring module, which ensures that business stakeholders can access various business operations and processes. According to McCoy (2002), such programs have been facilitated by the development of technology and ensures that individuals have access to an accurate breakdown of the activities undertaken by enterprises. Such advances in technology have made sure that all the stakeholders have access to up to date information and proceedings, thus enabling continuous assessment of the company's operations.
Additionally, development of technology has led to the development of cloud computing. Such advancement has enlarged the audience that can access the corporate data. Thus, this means that both the internal and external stakeholders can utilize such an intelligent tool to generate relevant data, which can be tailored to the prioritized use (Trigo, Belfo, and Estebanez, 2014). Cloud computing enables the business to upload data regarding milliseconds, and on a daily basis. This ensures that all the users of such data can access it frequently, and thus be able them to interpret the performance and act quickly on the trends identified. For instance, this technology enables investors to locate potential and profitable ventures based on the trends and comparisons generated from the information gathered via cloud computing.
Moreover, the advancement in technology has created diverse channels, which an organization may use to relay its real-time information. For instance, social media has emerged as one of the primary conduits, which enterprises are currently using to transmit its data. In some cases, businesses utilize their Twitter and Facebook accounts to relay any information related to its operations and day to day undertakings. Such a move has enabled these enterprises to increase the access of information to their audience, especially the new crop of online-based investors. Therefore, this also assists such companies to maintain their relevance in both the analog modes of communication and even in the digital means of information transmission.
Advantages of Real-Time Reporting
The adequate and reliable access to up-to-date financial information by the management has increased the competitive levels of an organization in the market. Due to the hyper-competitive nature of the today's business environment, corporations' managers have to be quick and nimble in the thinking and decision-making process (Schneider, 2012). This enables such institutions to adopt the latest developments and discoveries in the market and thus enhancing its relevance in the market. For instance, the preference and tastes of consumers tend to change rapidly over time (Seele, 2016). Hence, this necessitates the product managers to access regularly, where he/she can tailor the products or services to the consumer's specifications. Such a move will ensure that the firm remains relevant and competitive in the market.
The adoption of Real-time data analytics saves a lot of finances and time in the long run. Such development may seem to be expensive in the initial periods, especially on the acquisition of the real-time analytic and generating tools. However, according to KPMG (2014), in the long run, the established systems will eliminate or reduce the need for resources, which were previously utilized in providing the periodical reports (Abusaid and Ahmad, 2012). Additionally, the real-time adoption reduces the periods of time used in waiting for the development and publication of the final reports for the management to engage in the productive decision-making process.
The provision of real-time financial reports and the undertaking of the business enables the investors to weigh on the available investment opportunities quickly actively. For instance, according to ACCA (2013), more than 85% of the respondents believe that the provision of real-time corporate reports will hasten the reaction of the investors in both the short run and the long run periods. The former quarterly or annual periodical release of the organizational reports limited the actions of stakeholders such that, their investment moves depended on the periods set by the management to release their final financial statements (Rennekamp, 2012). However, as the technology improved, such investors can now access the information on the real-time basis, thus enabling them to make sound and updated investment decisions. For instance, more than 60% of organizations have reduced the period of publicizing their financial reports. Such speed has been associated with the investors need to access the performance of various businesses, thus enabling the make sound and quick decisions.
Limitations of Real-Time Reporting
The primary limitation associated with the utilization of the real-time reporting approach is the aspect of time consumption. Organizations are required to regularly update their reports and statements to enhance this element (ACCA, 2013). Therefore, this means that an extended period of the corporation's time is utilized in preparing them, thus keeping them under pressure to perform. Additionally, these reports may also consume a substantial amount of the users' time, since they are always involved in the monitoring of the trends and the performance of a particular firm (Abusaid and Ahmad, 2012). Thus, the consistent investors will tend to spend most of their time analyzing and studying the updated data, which they rely on during their decision-making process.
Moreover, the constant flow and availability of information may lead to the emergence of information fatigue. Faster and frequent access to information may be beneficial to individuals. However, it may also be disadvantageous due to the onset of data smog. This means that the investors or the managers will have access to large chunks of information, thus making it hard for such individuals to use the optimally (Abusaid and Ahmad, 2012). Regulated information in most cases yields valuable results as compared to an extensive source of information that cannot be used exhaustively. Hence, the vast mass of data provided by the real-time reporting leads to unproductivity of the measures and investment decisions adopted, since the users of such data would not be utilized exhaustively.
Finally, managers and investors may generate premature and inaccurate estimates and data analysis, which may, in turn, lead to misstatements and unproductive investment decisions. Also, enterprises that rely on the use of auditors in breaking down and relaying the real-time information have to verify if such data is accurate and relevant to various stakeholders (Tian, 2015). Hence, once the data presented to such auditors or regulators is beyond their handling capacity, they may not be able to accurately evaluate the relevance of such data within the fixed period. Hence, the auditors and managers may end up adopting estimates which do not follow the established accounting standards. Thus, this may result in abandonment of work by such evaluators, due to the inadequacy of resources, devices, and tools used in monitoring the real-time data generated.
Real-time reporting has been identified as a complicated process involving recording, analyzing, and reporting the organizations' proceedings as they occur. The emergence of real-time reporting was initiated by the demands from stakeholders to access the current proceedings of an organization, and the increase in the competitive levels of an organization. Real-time is actualized through the use of modern technologies such as the Business Process Management and has faced recent developments such as cloud computing and use of social media to relay the organization's real-time information. This approach has accrued benefits such as increased competitiveness of an organization, saves time and corporate finances, and enabling investors to weigh on the available investment opportunities quickly actively. Nonetheless, the method is faced with limitations such as time consumption, and generation premature and inaccurate estimates and data analysis, which may, in turn, lead to misstatements and unproductive investment decisions. Additionally, constant flow and availability of information may lead to an emergence of information fatigue.
Abusaid, G. and Ahmad, M. (2012). Real-Time Three-Dimensional Stress Echocardi...
Cite this page
Essay Example for You: Real-Time Reporting. (2022, Mar 04). Retrieved from https://speedypaper.com/essays/real-time-reporting
If you are the original author of this essay and no longer wish to have it published on the SpeedyPaper website, please click below to request its removal:
- Free Essay on Business Ethical Practice
- Free Essay on Negotiation and Conflict Management
- Project Charter Essay Sample
- Essay Sample on Customer Service in Airline
- Paper Example on Reporting Evaluation Results and Ethics
- Essay Sample on Artificial Intelligence
- Free Essay: Corporate Corruption in the World of Big Business