So far in the evolution of statutory reporting, we have seen the initial drive towards the centralisation models (in-house, outsourced and the hybrid model) and the subsequent push towards greater process control and standardisation. The third phase of evolution has seen the development of greater automation of the statutory reporting process.
As all aspects of finance and non-finance activity have been examined to identify those activities that can be automated and statutory reporting is no different.
Automation in statutory reporting has tended to focus on two key areas: improvements within the actual process itself and software solutions to automate overall production of deliverables.
Driving automation in statutory reporting process:
Within the statutory reporting process, there has been a greater focus on identifying areas where recurring transactions or adjustments can be automated. Some organisations have looked at utilising shadow/separate statutory ledgers within their ERP system to record local GAAP statutory adjustments. Routine transactional entries can be configured to post automatically. These shadow ledgers ensure the organisation captures all non-primary GAAP data in a reliable and robust system, while also allowing for ‘one-version of the truth’ to exist.
Other organisations have looked to push as many as possible statutory adjustments into the primary GAAP ledger, and only requiring the shadow ledger to hold adjustments where local GAAP is substantially different to primary GAAP.
Driving automation in statutory production.
While the greater utilisation of ERP systems is to capture and maintain statutory ledgers, and related adjustments, the need to automate the actual production of statutory financial statements still exists. The growing trend is now for organisations to supplement their ERP systems with additional automation software to produce the statutory financials statements.
The growth of centralised models has resulted in the creation of dedicated and knowledgeable statutory reporting teams, while a standardised process ensures consistency in reporting and disclosures. Equipping these teams with the ability to automate the production of statutory financials has driven efficiencies in turn around times, while also ensuring the financial statements are maintained in a robust secure environment.
Throughout this series we have looked at the evolution of statutory reporting, from the perspective of organisations within a shared service centre environment. It is true however, that the trends we have discussed also exist within other organisation types, and the drive to standardise and automate statutory reporting processes are not exclusive to shared service centres. That being said companies within a shared service environment have been at the forefront of driving centralisation, standardisation and automation of the statutory reporting process.