5 Considerations for Selecting a Collaborative Reporting Software Solution

Creating statutory filings and fulfilling financial reporting requirements used to be a fairly straightforward process for financial organizations. Today, external and internal reports typically include data from multiple stakeholders, locations and systems–often along with detailed descriptions and notations.

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Yet, in spite of increasing complexity, the reporting process for most companies remains largely manual, hugely time-consuming and error-prone. In fact, a 2012 benchmarking study from Ventana Research showed that close-to-report time (often called the “last mile”) actually increased during the previous five years. Unexpectedly, only 15 percent of survey participants cited regulatory requirements as the reason behind the increase in time. The primary factors reported were process complexity, the large amount of manual work involved and a decrease in staff headcount. When these factors are coupled with the increasing demand for a range of internal reports, it’s easy to understand why reporting is often a major headache for today’s finance organizations.

Technology addresses some of the stickiest reporting challenges. Collaborative narrative reporting software solutions are designed to create virtually any kind of financial report with the following criteria:

  • Reports are highly formatted, usually including narrative as well as numbers.
  • Information (data, analysis and narrative) comes from multiple stakeholders and systems.
  • Review and sign-off are required by multiple parties.
  • Frequent changes and edits are typical.
  • Accuracy is critical; errors can have serious repercussions.
  • Accountability and source tracking for both narrative and financial data is important.

 

Some software providers include collaborative reporting as part of an overall corporate performance management solution; others offer modules that can be added on to existing solutions. Some are designed primarily for those regulatory filings requiring XBRL (Xtensible Business Reporting Language) tagging; others offer features that are useful for virtually any kind of external or internal report, including annual reports, board books and investor presentations.
 
In the article “Three Good Reasons to Automate the Last Mile of Finance,” Mary Driscoll, the lead researcher for the American Productivity & Quality Center’s (APQC) financial management practice writes that increased reporting costs, pressure to condense reporting time, and the high risks associated with errors are all drivers for automating close-to-report activities. As she points out, reporting costs and cycle time are inextricably linked. The more time and staff resources required, the more expensive the process, and the less time senior executives have to react to information and make corrective decisions.

 

Here are five things to consider when evaluating all-purpose collaborative reporting solutions.

  • End user interface. Some companies have hundreds of contributors to reports, many of whom do not have financial backgrounds. Most finance organizations don’t have the time or resources to do extensive end user training on new solutions. Therefore, products that employ Microsoft® Word® and Excel® documents for collecting data and narrative contributions have an advantage when it comes to ease of use and adoption.
  • Real-time updates. When edits are made and accepted, does the report have to be published or exported? The lack of real-time updating can increase overall reporting time and result in many time-consuming revisions. Also, be sure updates are automatically made to all associated reports and documents.
  • Scalability. Some solutions charge by the report or by the contributor, while others limit the number of contributors. Such constraints are counter to the whole point of collaborative reporting, which is to encourage and facilitate input from stakeholders throughout a company and increase the transparency of their contributions, all while lessening the burden on finance. Ideally, a collaborative reporting solution should be so simple that it can be used for virtually any report produced, including ad hoc or customized reports and presentations that eat up staff time.
  • Workflow management. Look for a solution that automates much of the reporting process: sets and manages deadlines for contributions, assigns responsibilities, manages reviews and sign-offs, sends alerts when needed, tracks edits and sources and shows up-to-the minute report status whenever needed.
  • Automated consistency for number handling. Consistent number formatting, rounding and currency conversion are among the “minor” details that can drive a finance professional nuts. Solutions with built-in rules for handling such details can save many hours and eliminate staff frustration.


Automated collaborative reporting yields many significant and immediate benefits, including increased productivity, better accuracy and compressed reporting cycles. Even more importantly, solutions typically result in better and more meaningful reporting–moving finance into a more strategic role in the business.

What are your thoughts? Are you experiencing similar challenges? Are you using a collaborative system to automate the process?

 

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