Global capability centres and shared services are harmonising the last mile of financial reporting and disclosure management. They perform a crucial role in streamlining the process of preparing financial statements, notes, and disclosures for multi-jurisdictions, thereby increasing efficiencies.
Shared services are designed to standardise processes and support company growth. Organisations that have not centralised global disclosure management and implemented purpose-built software are missing out. Here are four myths surrounding this process that need to go.
“In-country disclosure management ‘status-quo’ is good enough”
As financial transformation accelerates pace – and organisations find new ways to drive savings and efficiencies – old processes just do not cut it anymore. By harmonising global disclosure management with standardising, centralising, and automating; your organisation not only saves time and money but reduces the risk of human error that can lead to non-compliance.
Finance and compliance teams operate with efficiency targets and are expected to deliver more with less. The harmonisation of your global disclosure management/ statutory reporting process can be key to achieving this. Purpose-built software helps you view the process more holistically, enabling your professional staff to focus on tasks that add strategic value.
“Addressing statutory financial reporting was just a logical evolution of everything else we did…the purpose of the whole shared services centre that we have set up has moved away from just cost optimisation to bringing in efficiencies”Vice President – Finance, India Global Shared Services of a multinational organisation
“Spreadsheets and word processing tools suffice”
Global reporting requirements are becoming more complex and stringent. Organisations are reporting on and presenting data at an unprecedented level of granularity, which means more operational and process complexity, and increased risk.
Manual preparation of financials and notes/disclosures can lead to a lack of transparency over process and filings, due to disparate systems and reporting. With this process and each iteration of the process containing so many human touch points, the potential for oversight, inconsistency and error leading to non-compliance is ever-present. This can create the “perfect storm” for data omissions. It can lead to hidden gaps in mandatory disclosures, reporting delays, regulatory scrutiny, and even financial penalties for compliance breaches This is only compounded as deadlines approach and the workload becomes even more demanding.
Unlike spreadsheets, purpose-built software tracks and traces changes made by users, time-stamping the process to maintain version control. It provides organisations with global oversight of critical changes to local and global disclosure requirements and greater transparency.
An automated global disclosure management process equates to huge time savings. Replacing manual entity filing with specialised software can reduce the time spent on the process by many hours. Automation, internal reconciliations, and pre-tagged templates not only save time, but ensure your financial statements are of the highest quality.
“Software can’t reduce reliance on local regulation expertise and language”
Centralising reporting/disclosure management obligations means less work at the local level and a reduced duplication of effort across the enterprise. Until recently, it also meant having to find ways around the requirement for local jurisdiction-specific knowledge and local language issues, as the key “perceived-risks”. Armed with purpose-built software, global capability centres are overcoming knowledge challenges by reducing reliance on local country expertise and handling the process accurately and with ease.
Offering the latest local best-practice content across multiple jurisdictions, timely regulatory updates, language translation function and automated efficiencies, dedicated software provides assurance that mandated local compliance rules are met fully and accurately. It reduces reliance on in-country expertise and “de-languages” the entire process. This speeds up reporting and reduces the risk of regulatory breaches.
Stand-out features of cloud-based and content-driven disclosure management software include embedded, best-practice local-GAAP content and in the local reporting language, throughout Europe, Asia, Australia & New Zealand, the Americas, and South Africa; pre-tagged templates with appropriate XBRL taxonomy flexibility to add disclosures and on-demand language translation functionality.
“Software cannot simplify the process”
The overall preparation process of statutory financial reports and disclosure management is highly iterative, and there are tight deadlines. There is a need to manage consistency across reports, of both figures and narrative. Navigating manual processes across regional teams can lead to more costly and cumbersome compliance processes in the longer term. Once your organisation gets started with purpose-built global disclosure management software, the process becomes easier to manage.
Software offers the benefits of standardisation with a single scalable, centrally controlled solution for multiple jurisdictions. This enables organisations to simplify legacy processes, reducing risk as well as higher costs in audit oversight, local legacy software licence or outsourcing expenses. Furthermore, software with in-built content, automation features and application programming interface (API) functionality enables the seamless flow of data and connectivity.
Global disclosure management tools provide a holistic digital transformation journey across people, processes, and data. They liberate shared services to deliver more value-added services.
Organisations with purpose-built cloud-based and content-driven global disclosure management software tend to have strengthened regulatory compliance frameworks and governance. In addition, they compete with a workforce focused on completing higher-value tasks.
A recent report by the Shared Services & Outsourcing Network found that nearly six in ten – shared services executives cite automation as a continuing priority. Will your organisation transform the way it conducts global disclosure management in 2022?