For finance teams, year-end processes are inevitably associated with long hours, tight deadlines, and an intensive focus on details. Many organizations are still using disjointed manual processes to complete their end-of-year financial disclosures, which necessitates a lot of work and opens the door for a host of opportunities for errors to creep into the process.
That means double and triple checking the numbers and combing through details to make sure nothing was lost somewhere in the version-control nightmare that inevitably accompanies that manual undertaking. It’s a slow walk to the finish line in which numbers are moved from one system to another and from one document to another, and every change requires another round of copying and pasting.
There’s a better way to manage financial disclosures. By automating and integrating your reporting processes, you can eliminate vast amounts of manual effort and relieve your team of the overload that is often associated with year-end processes. Here are five ways you can avoid late nights and long hours during that critical year-end crunch.
1. Eliminate “Copy and Paste”
The root cause of most year-end difficulties is a lack of integration between core financial software systems and the productivity tools used to format and present financial disclosures. In most organizations, enterprise resource planning (ERP) software provides the backbone from which the numbers emerge. A typical year-end process may begin with a data dump from General Ledger to Microsoft Excel, followed by some formatting, the addition of some formulas, and cross-checking key numbers to make sure everything looks right.
For most companies, year-end reporting requires the addition of narrative content to add context and meaning in the form of explanatory notes. There are Word documents that will be sent to investors, PowerPoint slides for presentation to executive management, and XBRL-tagged content for regulators and exchanges.
The problem in most companies is that information doesn’t flow automatically from each of those systems or documents to the next. More often, it’s an exercise in copying and pasting the raw numbers, adding narrative, then copying, pasting, and editing that information as well.
That’s tedious, even if you only do it once. The problem is that inevitably, the process must be repeated over and over again–every time there is change upstream. Every time an adjusting entry is made to the general ledger, the numbers must be revisited in every single downstream document that draws upon that data.
With a single, integrated year-end reporting solution, these copy-and-paste processes can be eliminated entirely. Automated financial reporting means you don’t have to go back and edit every downstream document, which saves you time. Perhaps even more importantly, it eliminates the need to double and triple check to make sure you didn’t miss anything.
2. Unify Narrative With Quantitative Information
Most year-end reporting calls for narrative content as well. Management may need to disclose certain risks, or simply provide some meaningful context to help investors and regulators better understand why the numbers are the way they are.
Narrative content often involves the same kind of copy and paste process we discussed earlier, but it’s often even more difficult to ensure consistency across all the various platforms used to generate financial disclosures, presentations, and reports.
With an integrated financial disclosure management solution, users have a single system of record for narrative content, automatically distributed and synchronized across every platform and every document associated with the year-end reporting cycle. That means you get absolute consistency, without having to double-check the fine print over and over again.
3. Simplify Collaboration
Year-end reporting inevitably requires collaboration. That means back-and-forth discussion among colleagues in the finance department, and often across departmental boundaries as well. Outside agencies may also need to be involved.
In a world where remote work is increasingly common, collaboration can be especially challenging. Flexible work hours add further to these difficulties because team members may not be operating on the same schedule, requiring asynchronous communication. Global companies face similar challenges with respect to time zone differences. That can quickly add up to overload, unless you have the right technology tools in place to facilitate effective collaboration.
A single system of record provides a shared platform for comments across geographically distributed teams. By managing documents centrally, the best financial disclosure management solutions offer a solution to the version-control nightmares that many companies face when it comes to year-end reports. Everything is managed in one location, eliminating the need for multiple copies of the same information.
4. Take the Pain Out of XBRL Tagging
XBRL is quickly becoming a de facto requirement for companies around the world. In increasing number of jurisdictions, government tax authorities are requiring businesses to use XBRL tags in the information they provide with tax filings. Major exchanges around the world have mandated that listed companies tag financial disclosures as well. For all others, XBRL tagged financial statements are likely to be a requirement, eventually.
Many companies are still outsourcing the process of adding XBRL tags to year-end reports, but the best financial disclosure management solutions provide a simple means of doing this in-house. Automated financial reporting with embedded XBRL capabilities saves you money and eliminates that extra step of sending reports to an external agency prior to publication. In most companies, that translates to a few extra days of breathing room in the year-end reporting process.
Making Automated Financial Reporting a Reality
Certent Disclosure Management brings speed, accuracy, and consistency to an otherwise laborious, error-prone, and difficult-to-control process. With automated financial reporting, companies can shrink their closing cycles by 50% or more, while increasing accuracy at the same time. Certent is built on Microsoft Office, giving you a familiar, flexible toolset for developing, producing, and publishing your year-end financial reports. To learn more about Certent Disclosure Management, contact us today for a free, no obligation demonstration.