A favorite film line of mine is, “I want that report on my desk tomorrow morning!” I usually felt it was a phrase stolen from the Finance business at the stop of the 20th century!
In a common Finance functionality, this reporting request would entail a staff of monetary industry experts (really potentially all certified accountants) extracting details from Finance programs, correcting the details they’ve extracted, collecting additional data that wasn’t
in the Finance devices and then collating all of this info alongside one another in a spreadsheet to then present in a correctly manicured A4 report. And lastly, if time authorized, there maybe a couple minutes readily available to incorporate some commentary or insight.
Speedy ahead to 2022, and what has definitely improved? Is the output of common stories however the “raison d’être” of a Finance experienced, and with an ever-escalating want for facts and insights, how is the reporting landscape evolving?
Who is now asking for these reviews?
For decades, CFOs and their groups have been serving a static established of stakeholders with a particular desire about how they want to see details presented. But the stakeholder group for the Finance operate is escalating, and the requires of every single team are evolving.
Historically, Finance was all about reporting accurately on what experienced occurred in the previous reporting interval, stating the facts of what contributed to the Cash flow Assertion or the Stability Sheet. This stays a main purpose of Finance reporting and fulfills the
needs of a massive team of predominantly exterior stakeholders – particularly clients, statutory and regulatory bodies, and the investor local community. As corporations embrace Electronic Finance transformation, the Electronic CFO has a apparent mandate to increase services to
these exterior stakeholders.
Having said that, alongside this, the Digital CFO ought to also produce to a new established of interior stakeholders who are in search of a lot far more than the points on the earlier reporting interval. The Board, Business enterprise CEOs, and Operational Leaders count on Finance to deliver forward
searching insights and far more in-depth analytics accessible at their fingertips. The Finance purpose ought to consequently carry on to give the regular reporting, when also providing company insights and foresight – based mostly on knowledge analytics, modelling, and predictive
So normal stories are not lifeless?
Conventional experiences are not useless. Finance proceeds to be the custodian of Statutory Reporting and
Regulatory Reporting – experiences that are really predictable, are produced at set frequency with clear specificity. And while these external stakeholders are necessitating far more granular reviews, and in some situations a go towards info submissions alternatively than
report submissions, they carry on to be main foundations of Finance. These stories are essential to assistance market and field comparisons, competitor benchmarking, and lessen the burden of regulatory reporting. As new reporting places are discovered (ESG
remaining a good example), regulators, traders and markets uncover ease and comfort in easy-to-digest and easy to understand common studies.
Administration reporting straddles the line between conventional stories and the on-desire reporting they are going to. Administration experiences have to be customized to the specific organisations’ demands and be manufactured persistently with in the vicinity of actual-time facts. In a latest
CFO roundtable dialogue a number of participants discovered a very good part of Management reports also want to be predictable, with apparent specificity. With the growing need for information and facts, it is critical that this is delivered through self-services reporting
and analytics abilities, alternatively than Finance Functions serving up a substantial amount of regular stories.
Lastly, as the emphasis of a Finance operate moves towards Fiscal Scheduling, Analytics, and Perception, the will need for dynamic and on-desire reporting is coming to the fore. This requires a distinctive mentality, skillset, and thoughtful technological know-how decisions
to seriously assist a Digital Finance function. Continuing to emphasis insight and analytical abilities on common reviews or aggregated details will keep back again the transformation of a Finance operate and simply just result in upset stakeholders as their anticipations
are not achieved.
A vital aim for the successful operations of a Finance functionality is therefore making sure that all regular reporting is carried out simply with a higher degree of automation –
better, speedier, and less costly. Traditionally Finance features can spend up to 70% of their time on creating standard reporting, and only 30% on incorporating benefit as a result of dynamic reporting and insights – a essential overall performance metric for a successful finance transformation
programme would be to limit standard reporting to < 30% of the Finance effort.
So how does a Finance Function shift to Dynamic on-demand reporting?
Evolving to a dynamic reporting culture requires a wholesale culture change in Finance – this can’t be achieved through simply implementing data exploitation and business intelligence software solutions on top of existing processes and datasets. It starts
with re-imagining end-to-end Finance processes and considering how real-time data and dashboards can support ongoing reporting and support a move away from point-in-time reporting.
And let’s not forget the fundamentals of a Finance function. Every output produced – whether it’s a standard report, a dynamic dashboard, or a business insight finding from a data scientist – must be sourced from a reconciled, controlled and accurate financial
accounting dataset. The worst outcome for Finance is a proliferation of data and reports that can’t be authenticated or reconciled back to the Finance books and records – a perfect storm for eroding all confidence in a Finance function.
Consider using the rich granular data available in subledgers as the starting point for dynamic reporting and then enriching this controlled Finance dataset with other non-Finance golden sources (integrated through a data fabric) to drive business insights.
The growth in data demand has been exponential, and continues to grow as new regulatory standards such as IFRS17 and ESG disclosures drive the need for rich granular data in Finance. Attempting to bring this level of non-financial data through the Finance
general ledger will just constrain the Finance functions’ reporting ability by limiting them to aggregated standard reports, and lead to an explosion in offline, end-user computing (EUC) solutions as people try to get the analysis they need. Furthermore, this
risks misinterpretation or inaccurate insights being derived through the creation of “shadow” Finance reporting that lacks the required controls and consistency.
This also requires a re-think around the people, skillsets and culture required to support dynamic reporting. Insights and analytics require individuals who can identify trends and analytics, and aren’t solely focussed on compliance, accuracy, and reconciliations.
You need the ability to be able to ask the right questions and direct the data and analytics teams – this requires a thirst for curiosity as well as a business outlook. This doesn’t mean you no longer need Accountants, and it doesn’t mean everyone should
be a Data Scientist – but the two must co-exist.
Once you are clear on the data foundations and people & skillsets, the technology choices become easier. Data exploitation and business intelligence solutions are available in their plenty, however supplementing these capabilities with scenario modelling
and machine learning capabilities will lift the analytics capabilities to another level. The ability to explore and implement chatbots, natural language recognition, or blockchain will come more naturally once the foundations are laid for dynamic reporting
Dynamic reporting presents a cultural shift in the Finance function, with considerable difference from the Finance standard reporting role we started with. Rather than a Finance stakeholder demanding that standard report on last month’s Financials by tomorrow
morning, the best-in-class Finance functions will be offering up dynamic reporting and critical business insights in real-time, helping to shape the future direction of the business.