Think back over the last 5 years, has there ever been a period when more had been asked of your department than right now?
It has been a shock for everyone, 4 months of unprecedented change, and reorganisation with the effect of decisions taken now rippling out over many years into the future. Finance leaders have every right to feel under tremendous pressure to provide a road map for the future based on the analysis of current financial data.
And by the way, this must be accomplished with a new remote team that has traditionally been office based, making collaboration and hitting deadline targets more achievable.
The implementation of the process change has been imagined and executed over just a few weeks, with little chance to take the normally considered approach.
By contrast, business information systems have seen extensive financial investment over several years and have become more complex with more data available to crunch and analyse than ever before. Throughout this evolution, time was on your side to evaluate, control, and drive new projects to ensure no surprises and enable a structured approach.
Now there is pretty much a perfect storm. You have more information available to manage than ever before, the board is demanding maybe weekly or bi-weekly reporting, you have a remote team to coordinate with new processes, and the business environment is uncertain as never before with a huge amount of risk to account for.
So that’s your immediate to-do list.
But, what about the Annual Reporting process that may seem a long way off now? By the end of the summer, you will be needing to plan how the process will work.
In the new world, how will you extract your data from your systems of record and share across the team? How will you manage the multiple cut and paste processes to form the report? How will you ensure all the contributors provide their input on time? How will you manage the frequent number changes that will inevitably need to flow through? And, how you will provide the rich narrative to explain the figures and ensure the analysts can understand the go-forward strategy delivered through your numbers?
That’s the next 6 months to-do list fully loaded, plus the 3 months reporting blackout from January to March when you need to compile the reports.
Just to add to your challenges, there is also the new ESMA/ESEF mandate to address. How will you deliver compliance with the mandate and the provision of the tagged reports in iXBRL format? Remember the PDF format will not be allowed for this submission, so, yet another new process to manage with a team who has no previous experience of meeting the ESEF tagging and format requirements.
Does this seem like a daunting task?
The good news is, that just as retail-focused on the needs of the customer and moved online to provide convenience for the shopper, there are now financial reporting software providers who have re-imagined how ESEF compliance can be achieved and can provide an outsource solution for your ESEF reporting for 2020. The service is based on a click and complete solution.
In principle, it’s a simple 3 step process:
- Upload your report document
- The supplier works collaboratively with your team, so no 'pencils down' and time delay to tag and return your report for approval
- You submit your ESEF report to the appropriate authority
The added benefit of this type of solution is that it is based on the same secure and collaborative platform which provides enterprise-level corporate reporting, meaning it’s a simple process to migrate to the full narrative solution when it suits you following your ESMA filing, or choose to stay with the basic reporting format.
While this is a fix, it should only be a stop-gap. Reporting in times of uncertainty becomes critically important for open communication both internally and with external stakeholders. The ripples from the current crisis will carry forward over the next few years. The ability to communicate the financial position and narrate the changes lies with the Finance teams. With the new XBRL reporting format, analysts will be able to quickly analyse figures and compare performance against peers or across industries. The difference will be in the detailed narrative to accompany the figures. To be effective and efficient, Finance teams need a structured and secure platform to enable collaboration of sensitive information across remote teams, process control procedures to ensure on-time completion , and a dashboard for management to monitor progress throughout the project.
The takeaway here is that technology is available to help companies meet reporting and Regulatory requirements, either at a minimum level or at a more comprehensive level. One size does not have to fit all, so find the right reporting partner, with the appropriate experience and solution to ensure you can meet your own specific reporting needs.