Modernised reporting for a rapidly changing world

A connected, integrated business reporting framework can foster a culture of continual improvement and produce a single source of truth across the enterprise.

In the rapidly changing business environment, modernised financial reporting is becoming more important than ever. Risks related to manual, decentralised reporting processes are increasing amid regulatory change, emerging technology, globalisation, and a rise in remote work arrangements.

Modernised reporting uses cloud technologies, automation, and collaboration platforms to connect and integrate reporting across an enterprise. A modernised approach to reporting fosters a culture of constant improvement by enabling tech-savvy, data-driven financial analysts to tell a clear, cogent story about an organisation’s financial positions, risks, and opportunities. Connected, integrated reporting that leverages modern technologies can enable an organisation’s finance team to produce a single source of truth, which can empower business leaders at multiple levels to use reliable data to support and improve mission-critical decisions.

During a recent webcast to describe this approach to reporting, only 26% of 6,157 polled participants say their organisations are using leading or advanced reporting automation processes, meaning their data models are well defined and governed with significant or moderate uses of automation. Another 51% of participants say their uses of automation are less sophisticated or developing, suggesting they may have an opportunity to increase their use of automation to improve reporting.

Value drivers for modernised reporting

Connected, integrated reporting can provide many benefits to organisations by helping to produce consistent, highquality data through a streamlined process to enable improved business decisions. This reporting model can shift an organisation’s focus away from collecting and reconciling data and toward exceptions or anomalies that warrant scrutiny.

Modernised reporting can elevate the use of analytics to provide more insightful data regarding performance, which often highlights risks and opportunities for business leaders to consider. In addition, modernised reporting can lead to:

• Improved transparency of metrics used in reporting, in addition to improved auditability.

• Enhanced collaboration across the business to streamline document sharing, signoffs, and accounting workflow.

• Improved data architecture and source systems to support data quality.

• Reduced time and effort for collecting and validating data.

• Improved efficiencies through centralised report development and change management.

Many economic and globalisation trends provide reasons for organisations to consider a modernised approach to reporting. As an example, an increasing number of organisations are pursuing merger or acquisition activity through special-purpose acquisition companies (SPACs), which often provide an accelerated path to accessing capital markets. However, these accelerated timelines are often difficult to achieve for organisations with reporting structures that are not nimble, which can lead to missed opportunities.

As another example, complexity in tax reporting continues to escalate in many jurisdictions. Many organisations handle tax reporting as a somewhat discrete process from other business reporting activities and use manual procedures to integrate the tax provision disclosures into financial and statutory reporting. Global increases in tax and disclosure requirements are giving many organisations reason to consider automating more of their tax provision processes.

Making a business case

A transition to modernised reporting requires capabilities across reporting environments and data management to produce standardised data. Three critical components of this framework include a means of data sourcing and validation; a method for consolidating, aggregating, and calculating data; and a system for preparing and delivering financial and management reports. These components are supported by capabilities across the framework including embedded controls, audit support, data remediation, exception handling, orchestration, and intelligent workflow.

Securing executive support and funding for building a modern financial and management reporting system requires careful planning focused on building a business case for automation. Making the case can centre on a variety of quantitative, qualitative, and risk-based or compliance drivers depending on which priorities are more salient in an organisation. Some business leaders may respond to time and cost savings, and some may value factors such as completeness and standardisation of reporting or real-time visibility and enhanced data for decision-making. Factors that reduce compliance risk such as an improved ability to follow policies and procedures, data integrity, or segregation of duties may also be important to consider.

With support secured, a plan for building a modernised reporting infrastructure can start with identifying initial use cases for automation, then prioritising them based on the potential value derived and the effort required to automate. Organisations can consider a multitude of possible use cases in areas such as the development of financial statements or reporting to meet global statutory, insurance, environmental, tax, or internal control requirements. They may consider managerial functions such as flash reports, sales and operational reporting, board reports, monthly or quarterly reporting, and other executive reporting. They could also consider reporting related to industry-specific requirements.

With use cases selected, projects can be placed into piloting and scaled up quickly to demonstrate success. An effective change management process can help organisations address the more complex or challenging aspects of transitioning to modernised reporting. As each project contributes observable value, support for further positive change often grows, fuelling an organisation’s journey to a connected, integrated reporting structure that promotes data quality, transparency, and improved business decisions.

For more information, please visit www.deloitte.com/mt/strategy