Among top headaches of financial reporting 200+ respondents mention time-intensive processes, lack of automation, integration of data sources and last-minute changes
Tagetik, a leader in global performance management software solutions, today revealed the results of a research survey on corporate financial reporting and the associated processes and challenges: “Modern Financial Reporting Challenges – How Well Do Your Reports Meet Stakeholder Needs?” One of the report’s key findings is that much of the reporting done by the finance organisation today includes significant amounts of narrative.
The survey, conducted during September 2016, had 202 managerial or executive respondents with responsibility for financial, corporate or regulatory reporting. Thirty-one percent of respondents worked for organisations with $1B or more in revenue, 29% worked for organisations with revenues ranging from $300M to $999M in revenue and 39% were with organisations with $299M or less in revenue.
A key finding from the report was that 44% of respondents indicated that their reports have as much, or more, narrative information than financial information.
This trend is juxtaposed with other survey results showing that most organisations do not have efficient tools and processes in place to automate information collection, report creation, review and approval, or validation.
“This shift from primarily number-focused reporting to more narrative-centric reporting is the result of an expectation for finance to provide much more than just accurate financial reports. Finance should also be providing business insights and strategic guidance to executives and other stakeholders,” explained Dave Kasabian, Tagetik chief marketing officer. “It is the narrative that tells the story behind the numbers and elevates the value of the information that finance delivers to both internal and external stakeholders. The problem is that most finance organisations spend so much time collecting, consolidating and validating the numbers that they don’t have sufficient time to focus on the supporting narrative.”
“Given this disconnect, it’s not surprising that, according to the survey, a lack of automation and time-intensive preparation are respondents’ two biggest concerns, followed by lack of data integration and control and last-minute changes,” said Kasabian. “The survey also shows that almost 40% of respondents recognise that the workflow processes currently in place – for managing contributions, reviews and approvals – are inadequate.”
“Narrative is a highly important element of modern financial reporting,” said Manuel Vellutini,Tagetik co-CEO. “Not only does it add colour to the black-and-white picture of a company’s financial state, but it also serves to provide the critical analyses and explanations behind the numbers to support business strategy. Finance has a great opportunity to use the reporting process to deliver more value. But they can’t do that with traditional reporting and analysis tools. Our Collaborative Office solution was designed specifically to address the challenges highlighted in this survey. Research like this helps us develop and deliver the solutions that finance needs to stay ahead of the curve.”
To view the detailed survey results, along with a summary of key findings, click here.
For a graphical summary of survey results, click here.
To read Kasabian’s most recent blog post, “Narrative Reporting: Excel and reporting tools come up short”, click here.