In an effort to improve costly processes, many companies worldwide have made investments in financial reporting systems, according to a report from Oracle and Accenture. However, the report, “Challenges of Corporate Financial Reporting,” indicates that many of these investments have been reactive and not proactive, which has led to ineffective solutions and a lack of visibility, quality and confidence in financial data.
For the report, Dynamic Markets surveyed 1,123 finance professionals in large organizations, including insurance companies, in 12 countries, including the UK, United States, France, Germany, Russia and Spain, and found that 82 percent of respondents have made changes over the last three years to their close, reporting and filing processes, and 47 percent have invested substantially in at least one of these three areas over the past 12 months.
However, just one doesn’t cut it. “The good news is that many are doing something positive by investing in new reporting systems,” said John O’Rourke, VP EPM Product Marketing at Oracle. “It seems however, that these investments are currently too piecemeal and sporadic to have had the desired effect.”
Supporting O’Rourke’s comments, 12 percent of businesses in the survey have invested in just one of the three financial reporting phases (close, reporting and filings); 10 percent have invested in two of them and 25 percent have invested in all three. And, despite these investments, spreadsheets (72 percent) and e-mails (68 percent) are still being used to track and manage reporting on a daily basis, suggesting that new investments are falling short of expectations.
Businesses need to change their investment strategies in order to avoid the increased costs, ineffective financial reporting and missed key internal and external deadlines, the report contends. “These results mirror what we see and experience, and they’re illustrative of why companies increasingly find it necessary in today’s age of volatility to invest in their performance management,” said Scott Brennan, executive director, Accenture Finance & Enterprise Performance Consulting Group. “Those that tend to be happiest with the results of their enterprise performance management are those that have a vision. They understand their company’s strategy. They have a clear view of the metrics they need to monitor, and they know the importance of integrating an enterprise performance management solution.”
Oracle’s O’Rourke said financial teams need to take the time to find a truly effective solution that can address data integrity issues and optimize processes, which is a challenge, according to the report. The inability to effectively gather and analyze data is also having an impact on the wider business. Due to late changes to the chart of accounts, 15 percent of global businesses have missed statutory filings, putting their companies at risk of financial penalties and potentially impacting share value. Unreliable and opaque data is presenting finance teams with significant challenges, not least of which is around how effectively finance professionals can do their jobs. Seventy-one percent of finance managers feel their effectiveness is limited in some way by data analysis-related issues.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access