Remote work has exacerbated the pain of meeting internal financial reporting requirements, but most finance executives are nonetheless meeting their regularly occurring reporting deadlines, Kevin Beckberger of financial reporting software company Certent said last week at the CFO Live virtual conference.
Two-thirds of finance executives polled by his company and FNS, a finance information company, say they meet their reporting deadlines without fail but at the same time a third say the number of reports they have to generate is increasing uncontrollably.
What's more, only about a third say they have an easy way to check on a report's status and fewer than half have confidence the data in their spreadsheets are accurate.
Finance executives are paying a high price in opportunity costs to meet these growing reporting requirements, said Beckberger. "What is the opportunity cost of four or five FTEs spending two or three full days on copying and pasting data from other environments into a PowerPoint presentation or a Word document?" he said.
At many companies, meeting internal reporting requirements — monthly management packs, board reports, the budget book — consumes considerable resources, making it difficult for staff to take time to give reporting data proper context.
"With the appropriate amount of time, these reports should contain both the numbers and the stories behind the numbers," he said.
Providing that narrative context is typically the first thing staff gives short shrift to when they get time-crunched, he said. That means monthly report packs, which can run as long as 90 pages, are data heavy and, at best, contain few contextual comments. That can be a problem for the reports' business owners. "Minor commentary is not always enough," he said.
Microsoft Office dominates
At most organizations, reporting is still built around the Microsoft Office suite of applications, including Excel, Word and PowerPoint.
As reporting requirements increase, so too does the time it takes to pull together the reporting team, manually move data from one environment to another, have the data reviewed, both for accuracy and compliance with accounting standards, and then reformatted for presentation.
"Data is usually extracted from a spreadsheet format, fed into the workflow you’ve developed, and then, finally, depending on your requirements, if you’re a private company, the internal reporting output is what we'd see," he said.
Finance executives' complaints about the process are consistent over time, type of organization, and industry, his company’s polling has found. It's too manual, time consuming, high level and error-prone.
"Things are getting adjusted in the sources, then re-extracted, and then repopulated into the reports in a manual way," he said. "And then, of course, there’s versioning: people looking at different versions of the Word document or PowerPoint deck at different times, where numbers are changing or the narrative is changing based on the adjustments, and the versions aren’t being kept up to speed."
The pandemic has exacerbated these reporting weaknesses, Beckberger said. Now, you have different versions of the data on people's computers at home without proximity to help keep the process from getting confusing.
"What version is sitting on which desktop in someone's home?" he said. "Is the data still up to date? Versions get disconnected as people work in remote locations."
Whatever control problems you had before are also exacerbated. "Now you have greater lack of control over where things are in the reporting cycle," he said. "There’s a lack of workflow tracking, audit trail tracking, notifications of when people have completed tasks, all of which are difficult to do when working remotely."
Beckberger named cloud solutions as one way for finance executives to try getting a handle on the problem; a cloud platform can help solve the versioning problem and also make it easier to move, run computations on, and update data in different types of formats.
"All of this wraps up into the types of solutions available to you," he said.