The Challenges of Modern Financial Reporting

Girish Muzumdar

Agenda

The Survey

The Essence of the Survey

Financial reporting continues to be a major challenge for most finance teams for several significant reasons:

• The widespread adoption of narrative (text) in financial reporting. While certainly valuable, narrative contributions are notoriously difficult to manage, revise, and maintain.

• The need to integrate multiple data sources, and the accompanying challenges with data consistency and tracking.

• The need to collaborate with contributors and stakeholders throughout the reporting process while still relying on traditional communication vehicles such as email.

• A general lack of data, workflow and process control.

Survey ScopeThe Demographics of the Survey Participants

Question 1: After the books are closed, what types of reports/documents do you produce to communicate to key stakeholders? (check all that apply)

Question 2: How many of these reports/presentations in total are produced per month? Per quarter?

Number of Reports/

Presentations per Month

Number of Reports/

Presentations per Quarter

Question 3a: On average, how long does report/presentation production take per month?

Question 3b: On average, how long does report/presentation production take per quarter?

Question 4a: How many departments are (or should be) involved in pulling these reports together?

Question 4b: How many individuals are (or should be) involved in pulling these reports together?

Question 5: Is there an adequate workflow process in place to manage contribution, approval, submission, etc.?

Question 6: How many sources of data are involved?

Question 7: What applications are typically used to create the reports/documents? (check all that apply)

Question 8: On average, what percentage of the document is narrative vs. financial information?

Question 9: What types of narrative

are utilized?

Question 10: What forms of communication are used during this process to manage the collection of information? (check all that apply)

Question 11: What reporting challenges do you face? (check all that apply)

SummaryThe Harsh Reporting Realities based on the study

Reporting Eats Up Valuable

Professional Time

Information Is Collected from

Various Sources

1

Narrative Is Essential for

Financial Reporting

2

Communication Is Fragmented And

Untraceable

3

Excel Alone Isn’t Enough For Modern Financial Reporting

4

5

ConclusionIn order to address these reporting challenges, Finance needs to be able to:

Leverage widely used tools such as Excel in a more effective way

Create a wide variety of reports faster and with fewer resources

Collect information from multiple data sources in a

way that ensures data integrity and builds in

consistency

Streamline and track collaboration among

contributors and business owners

Gain greater insight & control over workflows

and reviews

Effectively and efficiently manage increasing volumes

of narrative

The Modern Role of Finance

Why: Objectives of an office of FinanceModern office of Finance objectives

FORWARD LOOKING

PROCESS PRODUCTIVITY

BUSINESS PARTNERING

REGULATIONS & COMPLIANCE

Corporate Tax Reporting

IFRS / ASC

Solvency II & EBA (FINREP/COREP)

Integrated Reporting

XBRL

Analytics / Artificial Intelligence

Profitability Analysis

Strategic Initiatives

Transfer Pricing

Collaboration

Rolling Forecasts & Predictive Forecasting

Budgeting

Operational Planning

Integrated Financial Planning

Performance Management

Fast Close / Consolidation

Data Governance

Process Governance

Data Integration

Reconciliations

Strategic role of FinanceFinance is actively engaged in operations

CFO

Sales & Marketing

Plant / Production

Plant / Production

IT Dept.

How does your company stack up?Source : Hackett Benchmarking & Research

Process Average World Class

Closing Cycle 5 – 8 Days < 2 Days

Financial Planning 4 months 1 month

Level of Budget Detail 230 line items 15 line items

% of time on Forecasting 20% 44%

Cost of Finance 1.15% of Revenue < 0.53% of Revenue

FTEs per $B Revenue 114 < 28

The Goal of FinanceHigh Value and Reduced Cycle Time

▪ Faster Closing▪ More time for analysis – ensured accuracy▪ More detailed management information▪ Better, faster business decisions▪ Improved business performance!

CollectData

Average

World Class

Close Adjust Report Analyse

6 Days 12 Days

CollectData

Close Adjust Report

More time to Analyse and Forecast!

Finance Transformation Platform

Modern Finance needs a Transformation PlatformCombining FP&A and Treasury Functions with Regulatory, Statutory and Management Reporting

The Analytic Information Hub empowers finance and business users to capitalize on and govern massive amounts of granular data to uncover hidden value and deliver business insights that drive more informed and confident decision-making.

Analytic Information Hub

CFO

Capitalize on Big Data

Gain key insights

Time for Forward Looking to connect strategy to drive improved operating results

CONTROLLER

Handle new Regulation

Handle in-depth analytics

Faster results

Unified solution for CPM + Regulatory

FP&A

Handle in-depth planning & analytics

Align Operations & Finance

Faster results

More comprehensive Plans & Forecasts

IT

Non-disruptive solution

Single extensible solution

Low IT involvement

CEO

My CFO can provide better guidance as a business partner

Make the right decisions faster

HARNESS AND TRANSFORM RAW DATA INTO ACTIONABLE, AUDITABLE INFORMATION IN A FINANCE CONTROLLED ENVIRONMENT

Business value for multiple rolesFinance controlled transformation platform

Modern Finance Look & Feel

Processes with WorkflowsSupport for Multiple Processes with guided Workflow and Task Flowchart

CCH Tagetik Landing PageHTML5 Enabled – Browser based (Can be opened on any device)

Summary DashboardComplete view of the organization wide Budgeting & Planning Process

Detail SummaryEntity Hierarchy View of the entire Budgeting & Planning Process status

Reports and Data EntryMicrosoft Excel and Web Based Reports and Data Entry Forms

Microsoft Excel based Tagetik ReportMS Excel based report with data and security coming from Tagetik

Web-based ReportAutomatically converted Web-based report by Tagetik

Business users can see the output of the calculation on the form

Using best of MS Excel features for calculation

Protected Cells (Calculated - Blue)

Output Report (No Data Entry)

Data Entry (Yellow Cells)

CCH Tagetik converts forms automatically without any user intervention

Auto converted MS Excel based forms to Web-based forms

In-built SpreadingMultiple Spreading options for planning at the period total level

In-built LockingAbility to lock periods from being affected by spreading

Data Entry FormsControlled and Validated Data Entry in Tagetik

Drop-downs available to guide users on options availableEasily Navigation in Data Entry Form

Cell-level Commenting and AttachmentsComments and Attachments are managed by Tagetik and visible in the Report

Drill-downSlice & Dice to the lower level dimensions on MS Excel for any cell in the report

Ability to Drill-down and Pivot on Report Data on the WebEasy access to Pivot and Drill-down analysis on the Web

Drill-through Details of underlying Transactional Data

Collaborative OfficeNarrative Reporting

Last Mile of FinanceTemplate based shared document management

Workflow based Collaborative OfficeWorkflow to manage approvals and data entry

Tight integration with data from TagetikCollaborative Office integrates Word capabilities with data sourced from Tagetik

Multiple collaboratorsSingle report can be simultaneously worked on by multiple people with different accesses

Standard DashboardsStandard Tagetik Dashboards made in MS Excel Plug-in

Tagetik DashboardReal-time Web based interactive Management Dashboards

Pivot and FilterPivot, Filter and Heat map on individual dashboard elements

Ad-hoc Drag & Drop ReportingBusiness user driven ad-hoc reporting and analysis

Report GenerationEasily created, copied and modified

Report GenerationEasily created, copied and modified

Ad-hoc FormOutput form saved locally by the user for specific needs of single user

Save-as