PwC on How to Adapt and Thrive in Year-End Statutory Reporting
In this Q&A with PwC, we talked about how statutory reporting teams are working to reduce risk and add transparency, consistency, and efficiency into their reporting process, particularly given the way it has been impacted by COVID-19.
Jamie Barakat, a partner in the Finance Effective Advisory practice at PwC US, shared his experience and what he’s seeing from clients:
1. What do you see as the biggest impact of the pandemic on global reporting processes for organizations?
There are two things that stand out. First, what we saw with a lot of our clients was a renewed realization that it’s critical to have a process in place that provides transparency. In the initial months following the onset of COVID-19 and related disruption, companies were often struggling to get visibility into real-time statutory preparation and reporting progress. This created a lot of stress in the system with the regulatory risks and potential penalties due to statutory and tax filing delays.
Second, as a number of accounting teams have transitioned to largely working from home, companies are seeing proof that many activities that they previously considered to be off-limits can be centralized. We are seeing this dynamic play out across the board, including those companies where culturally they did not think that would be an option suitable for them.
2. What steps have multinationals been taking to transform their statutory reporting process?
Companies are focused on disrupting their statutory reporting process and are evaluating ways to lower the total cost of compliance by looking at a shift of their operating models, further enabled by technology.
At a minimum, companies are working to increase transparency into the global process and enable more effective governance. In parallel, we see companies working to transform their operating model, leverage technology, and drive more efficient processes.
3. What is the right operating model for statutory reporting?
There is no one-size-fits-all operating model that works for all companies. (Nothing like a consultant to answer "it depends," right?) Multinationals typically adopt an operating model comprising local and centralized resources, but the degree of centralization varies widely based on several key factors.
Evaluating a company’s operating model usually starts by understanding the overall finance strategy and operating model. From there we see management teams honing in on other factors such as cost, local requirements they need to address, desire for transparency and control they want to maintain, and appetite for investing in new technology.
4. What do you think is holding companies back from bringing their global statutory reporting into a cloud-based, centralized model?
There are two usual suspects that we often encounter with our clients, in addition to competing priorities and the accounting teams being stretched too thin.
First, it’s often not knowing how to transform statutory reporting or where to start. Given the number of stakeholders involved across the globe, a variety of local regulatory requirements and complex legacy processes established to meet those requirements, it can seem like a daunting task.
Second, there needs to be a well-defined business case with a clear plan to execute a transformation. Otherwise, we see companies being interested in transforming their process, but not being able to get traction with their transformation and obtain executive buy-in. If a company finds themselves in either of those situations, we typically recommend finding a partner who’s done it before and can help them think through their transformation journey.
5. What would you advise companies on how to most efficiently prepare for their next statutory reporting cycle?
Consider all the points above! Start by evaluating the maturity of your current statutory reporting process and building a roadmap for where you are trying to go and what gaps in your current process you are trying to overcome.
Interested in more insights from Workiva and PwC on how companies can transform the statutory reporting operating model, processes, and technology?
We’re joining forces for a webinar on Jan. 26 where we’ll discuss what you need to do to adapt and thrive with year-end statutory reporting in 2021. Make sure to save your spot, so you can join the conversation.
You know what your challenges are, and you know how new global statutory reporting software can solve them. But how do you get your software purchase...