Key Takeaways From the Global Statutory Reporting and Automation Trends Report 2021: In Conversation with Deloitte
Managing statutory reporting at an organization with many legal entities is a delicate task. Everything—people, processes, technology—needs to be working harmoniously to get the final reports over the line. Achieving this is no small feat: It’s too easy to hit the wrong notes.
We set out to understand whether statutory reporting technology has been delivering. So, we surveyed 682 CFOs, controllers, CAOs, finance directors and other finance and tax leaders across the United States, United Kingdom, France, Netherlands, Nordics and at companies with more than 10 legal entities to understand the current state of play.
The full results can be read in the "Global Statutory Reporting and Automation Trends Report 2021." Also, I discuss some of the survey’s main talking points with Valeriy Dokshukin, a partner at Deloitte & Touche LLP, in this webinar. In the meantime, here are some leading takeaways:
Only 17% of organizations reported having a repeatable process with minimal training and without increased chance of errors
The main reason behind this lack of repeatability is an over-reliance on unstructured manual processes. When your reporting process boils down to reams of spreadsheets being passed through email on an ad hoc basis, you’re opening the door to chaos—and chaos is something that’s almost impossible to perfectly replicate. More importantly, you’re introducing risk and possible oversights that could include disconnected figure adjustments, misinterpretations, typos...all of which could cause reputational harm.
Only 16% of enterprises’ statutory reporting processes are fully automated
In the survey, "fully automated" was defined as a state where all source files are linked to final outputs and updates to source data flow through automatically.
All other automation stages involve at least some aspect of manual work, with the highest percentage of respondents (49%) sharing that although they are able to link some source files, they still need to perform some manual updates.
During our conversation, Valeriy explained how many organizations function on a “hub-and-spoke” model, with each spoke operating independently to transmit information to a central hub without consistency and repeatability. Although each spoke may be partially automated, it’s still important to evaluate data harvesting and storage at a global level. That’s the only way to really increase fluidity. And it’s the ideal state that those involved in the statutory reporting process should be aiming for.
Nearly 60% of companies have no, or barely enough, resources to deliver statutory reports in an efficient and controlled manner
Clearly, this is a concerning statistic. The survey indicated that organizations aren’t shy about investing in their statutory reporting capabilities: 52% of U.S.-based companies reported that their company either frequently or always prioritizes statutory needs over other corporate functions, a percentage that increases to 69% in Europe potentially because of fragmented regulatory demands across the continent. Despite this, the majority of organizations still aren’t confident in their ability to satisfactorily deliver reports.
The final stages of the reporting process generally present the largest areas of insecurity. Which raises the question about whether more scrutiny needs to be placed on the entire record to report (R2R) chain. Companies are finding that most errors are found after data has been sent through their ERP and the data consolidation engine. But if they have true end-to-end automation, and if they can establish a nerve center where all dependencies within the process are connected, then they can minimize end-point risk.
The status quo doesn’t cut it anymore
Long-held approaches to managing statutory reporting processes aren’t working the way that they should. So, the question is: what now? Working with Deloitte, we offer some advice in the full report about how to ramp up automation, how to prioritize scalability and how to find focus when building your tech stack.
Is Statutory Reporting Tech Delivering?
Workiva surveyed nearly 700 CFOs, controllers, and more to get their opinions on the state of their multi-entity reporting. Check out this infographic...