Reporting Process is Keeping 97% of CFOs Awake at Night
By Tony Bethell, VP Strategic Alliances, ClusterSeven
Latest research by the FSN Modern Finance Forum entitled “The Future of Financial Reporting Survey 2017”, finds that the burden of financial reporting is keeping CFOs awake at night with 97% of CFOs worrying about at least two aspects of reporting.
62% of finance teams are concerned that they will not meet all their reporting deadlines. This is no surprise as the combination of complex business structures and regulation makes reporting a challenging exercise. But underlying this ‘meeting the deadline’ concern is the fact that CFOs (55%) aren’t confident that the financial controls are working properly.
This is a valid concern. Spreadsheets are a major part of the financial reporting process with a fair amount of data modelling, manipulation and aggregation taking place in these applications. Nevertheless, often the use of these spreadsheets is unmonitored; and minimal, if any, usage controls are applied to these business-critical applications. Consequently, due to the intricacy and multiplicity of data sources, it becomes difficult to ensure that only current and accurate data is being fed into the spreadsheet models. As a result, 46% of CFOs worry that an error will be discovered in a business-critical spreadsheet.
With a lack of visibility of the data sources, finance departments struggle to determine the convoluted data lineages among the various spreadsheets too. Perhaps that may be why 43% of CFOs fear that they will be faced with questions on accounts that they won’t be able to answer immediately.
The good news is that these issues that are troubling CFOs are easily resolvable. Technology can help institute best practice-led processes for monitoring and controlling the use of spreadsheets, based on internal polices and external regulatory requirements. Such an approach provides an audit trail to support and facilitate data accuracy, streamlines the spreadsheet-related processes as part of the overall financial reporting exercise, and integrates them with those residing in the enterprise system. Finance departments therefore have end-to-end, holistic visibility of the financial reporting process and most importantly, confidence in the accuracy of the exercise.
An infographic of the findings on this topic is available.