Earlier this year, Oracle and Accenture sponsored a global study on trends in financial close and reporting. We surveyed 1,123 finance professionals in large organizations in 12 countries around the world during February and March.
Financial Consolidation and Reporting is the most mature aspect of Enterprise Performance Management with mainstream solutions having been around for over 30 years. But of course over this time there have been many changes and very significant increases in regulation. So just what is the current state is Financial Consolidation and Reporting in our major corporations across the world? We commissioned this independent research to find out. Highlights of the result are:
• Seeking change: Businesses recognize they need to invest in financial reporting to address the challenges they currently face. 47 percent of companies have made substantial investments over the last year to the financial close, filing, and reporting processes.
• Ineffective investments: Despite these investments, spreadsheets (72 percent) and e-mails (68 percent) are still being used daily to track and manage reporting, suggesting that new investments are falling short of expectations.
• Increased costs and uncertainty: The situation is so opaque that managers across the finance function are unable to fully understand the financial impact or cost implications of reporting, with 60 percent of respondents admitting they did not know the total cost of managing and publicizing their financial results.
• Persistent challenges: 68 percent of respondents admitted that they have inadequate visibility into reporting processes, while 84 percent of finance managers surveyed said they find it difficult to control the quality of financial data across the entire reporting process.
• Decreased effectiveness: 71 percent of finance managers feel their effectiveness is limited in some way by data-analysis–related issues, while 39 percent of C-level or VP-level respondents say their effectiveness is impaired by limited visibility.
• Missed deadlines: Due to late changes to the chart of accounts, 15 percent of global businesses have missed statutory filings, putting their companies at risk of financial penalties and potentially impacting share value.
The report makes it clear that investments made to date by these large organizations around the world have been uneven across the close, reporting, and filing processes, which has led to the challenges these organizations currently face in the overall process. Regardless of whether companies are using a variety of solutions or a single solution, the report shows they continue to witness increased costs, ineffectual data management, and missed reporting, which—in extreme circumstances—can impact a company’s corporate image and share value.
The good news is that businesses realize that these problems persist and 86 percent of companies are likely to make a significant investment during the next five years to address these issues. While they should invest, it is critical that they direct investments correctly to address the key issues this research identified:
• Improving data integrity
• Optimizing processes
• Integrating the extended financial close process
By addressing these issues and with clear guidance on how to implement the correct business processes, infrastructure, and software solutions, finance teams will find that their reporting processes are much more effective, cost-efficient, and aligned with their performance expectations.
To get a copy of the full report:
To replay a webcast discussing the findings: