- How to standardise, simplify and scale Statutory Financial Reporting
As enterprises across India and South East Asia respond to pandemic and plan for the future, many have realised that it’s time to shift old ways of thinking, transform service delivery models, and embrace the Future of Work: an operational environment that is resilient, agile and technology-enabled.
Over the years, the central delivery model has proven to be effective in delivering standardised, cost-effective and consistent support services. In 2021, the SSON Global Market Report, found that 62% of respondents had already centralised services and capabilities, with another 19% planning to do so within the next five years. As organisations like these look to deliver even more efficiency and value, their next priority is expansion. Next year, close to 80% of respondents plan to increase their geographic reach and/or scope of services supplied.
As companies across various sectors increase the scale and breadth of their central delivery models, they are shifting their focus beyond the transactional landscape to centralise more complex processes, including statutory financial reporting. A global, streamlined delivery model enabled by technology not only allows these businesses to drive cost optimisation and increase efficiency levels, but also mitigate risks. These include the issues that make it difficult to prepare timely, accurate and fully compliant financial reports across the board.
A closer look at the challenges
Ever-changing statutory reporting requirements and heightening regulatory scrutiny are two of the headwinds facing today’s multi-entity, multi-jurisdictional organisations. Keeping up with distinct local-GAAP disclosure requirements, reporting formats and language rules can be backbreaking work. It can also create substantial risk if approaches are inconsistent and inefficient.
In a recent webinar, Best Practices for Central Statutory Financial Reporting in 2021, Thomson Reuters asked the audience to share their statutory reporting headaches. More than 90% of respondents cited keeping pace with new regulations and maintaining country and/or jurisdiction specific knowledge as a top challenge. By the same token, close to 42% named increased scrutiny from regulatory authorities as a key struggle.
At a time when organisations need process agility and robust data accessibility to address evolving regulatory requirements, a manual approach using spreadsheets or inflexible legacy systems for data collection and report generation is no longer prudent. These practices are not only inefficient, but also vulnerable to error and risk.
- Wasted time:
A lack of standardisation increases the duplication of effort and the time spent integrating different formats and reviewing different outputs. This can lead to audit overruns and missed filing deadlines. It also leaves less time for critical analytical reporting.
- Key-person dependency:
Relying heavily on in-country experts to manage statutory reporting for that jurisdiction can increase risks associated with key-person dependency. This is significant, given that more than two-thirds of those polled said recruiting and retaining qualified staff was a major challenge for their organisations. Yet, 50% of respondents are still using local finance teams to manage the end-to-end statutory financial reporting process; and a third prepare reports internally but rely on in-country teams for review.
- Inaccuracies and inability to scale:
Processes that rely on too many human touchpoints can impact the accuracy and quality of reports. This clouds visbility and weakens audit trails. It also makes processes difficult to scale, impacting overall agility and resilience.
In the future, these approaches may no longer suffice. Organisations with centralised statutory financial reporting models, enabled by greater automation and intelligent data management, are better prepared for ongoing challenges and new opportunities.
Technology enables a focus on new priorities
While most companies understand that technology can be leveraged to save time and optimise costs, it offers a slew of other benefits.
With access to disclosure management technology that offers powerful automation capabilities and content updates from experts you can trust, you can greatly improve control and compliance, while optimising efficiency across all aspects of the statutory financial reporting process.
Outlined below are six specific areas where Thomson Reuters ONESOURCE Statutory Reporting software can help you build a best-practice central statutory financial reporting function:
- Compliance: With a solution like ONESOURCE, you can reduce your reliance on local, in-country expertise, as the software incorporates best practice country-specific content in local language and provides regular content releases that allow you to comply with local accounting standards, and in-country regulatory disclosures and requirements. You can harmonise your reports globally with language translation capability integrated into the software.
- Connectivity: Using a single, cloud-based solution for reporting enables you to work more flexibly and collaborate regionally and globally. With all your data managed through one technology platform, any changes need only be made once to reflect throughout your reports. Our APIs facilitate easy data flow between ONESOURCE and your chosen business applications. You can also connect the dots and see the whole picture, for effortless analytical reporting.
- Constraints: Automating your statutory financial reporting processes from end-to-end – from trial balance to filing production – means you are no longer constrained by legacy, manual processes that are difficult to optimise and scale. You can save time and increase accuracy when preparing your reports by utilising automatic rounding, dynamic note/page numbering, referencing and a roll-forward process.
- Control: Process automation also fast-tracks standardisation, allowing you to increase visibility and control to reduce risks. With ONESOURCE, you have one centralised platform for complete control of your statutory financial reporting. As your central delivery model matures, you can scale your process centralisation initiatives quickly in a well-governed environment, while reducing costs.
- Change: As financial reporting becomes more efficient and accurate through automation, you put your business in a stronger position to embrace change. Your organisation can adapt fast as disruption happens or new opportunities arise, at a local or global level.
- Collaboration: Digitising and automating allows you to build a ‘workplace of the future’, where colleagues can collaborate seamlessly, no matter where they are physically located. Also, liberating skilled finance, tax and accounting professionals from tedious, low-value work boosts satisfaction levels and helps you retain top talent for greater business resilience.
With these capabilities, your organisation can quickly shift statutory financial reporting from local and complex to centralised and streamlined. Through ease of access, you can also allow data to become your greatest ally as you build a central statutory financial reporting function that acts as a true strategic partner to the business.
For more insights, watch our on-demand webinar here.