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Financial Reporting Automation
A Software Guide
The need for a reporting software that can produce reports ready for external reporting complete with all required disclosures, general information and other non-IFRS reports (Value Added Statements and Five Year Financial Summary) is undoubtedly on the increase
Financial reporting expectations for CFOs are rising. Financial statements are now required on more regular intervals to provide good financial insight for decision making and meet external reporting requirement. CFOs and finance executives themselves want to be strategic- they want to spend less time on the “nuts and bolts of accounting” and concentrate on evaluating new business models and opportunities. They want to make reporting faster and easier so they can do more with less but what commonly stands in the way is the time and effort it takes to manually prepare financial reports in IFRS from operational silos. Most organizations were able to modify their chart of accounts and general ledger structure to report IFRS to trial balance level or financial reports with inadequate notes disclosure. The notes are complete through manual of persons that have good IFRS skills. This manual process is cumbersome, time consuming and expensive in time cost. The prevalence of manual interventions in the current financial reporting dispensation is not a desirable option. The IFRS key-man risk and cost is high could be disruptive for most organisations. Some entities invested huge sums on capacity building during the first phase of the transition to IFRS in Nigeria but ended up losing some of the key skills to entities that transited in the second phase.
With these risks in mind, it behooves CFOs to automate the financial report preparation process through the use of a standard reporting tool. A software that automates financial reporting can enable preparers of financial statements perform in-depth analyses, speed up the process and simplify financial analytics. It can also increase regulatory compliance and reduce the amount of manual-time involved in generating reports. Implementing a financial reporting software can also help to streamline the reporting process and reduce errors.
There are literally scores of financial reporting automation tools in the market ranging from tools for small operations to more robust and functional systems for midsize companies and giant ERP systems. The most important consideration is having a larger view of what the financial reporting software should do for the company in terms of audit readiness, interim reporting, regulatory compliance, financial statement analysis and other qualitative aspects of reporting. With the adoption of International Financial Reporting Standards (IFRSs) in Nigeria, many companies (Big, medium and small) require a financial reporting tool that will prepare the required financial statements and also significantly eliminate the rigor that comes with the robust disclosure requirements of IFRS. The need for a reporting software that can produce reports ready for external reporting complete with all required disclosures, general information and other non-IFRS reports (Value Added Statements and Five Year Financial Summary) is undoubtedly on the increase.
The automation of financial reporting can be achieved either through an ERP system or with the help of a specialized software like CaseWare. Many specialized reporting software do not require extensive implementation time as they often integrate well with other systems thereby offering deeper and more customized functionality than reporting modules within an ERP. While automation of financial reporting is the obvious solution to challenges earlier mentioned such as inability to meet external reporting deadlines and inaccurate financial reporting, some financial reporting systems are too complex for an organization's needs.