In an era defined by digital transformation and rapid globalisation, one might expect financial reporting processes to be seamless and sophisticated worldwide. However, my experiences at a CFO Summit held in London last year revealed a surprising truth: the challenges CFOs face in financial reporting transcend borders, industries and even levels of economic development. Whether you’re in a first-world economy or an emerging market, the struggles CFOs face when it comes to financial reporting in particular are strikingly similar.
At the summit, CFOs and financial managers from 11 European countries echoed concerns that South African finance leaders know all too well, the perennial hurdles of data consolidation, regulatory compliance, accuracy and real-time reporting remain stubbornly persistent. But why do these challenges endure, and how can the ‘right’ technology provide a path forward?
Shared struggles
In today’s interconnected business landscape, financial data is often spread across multiple systems, subsidiaries and geographies, and consolidating this information into a single, coherent view can be daunting. This is especially true where organisations need to comply with reporting standards and Company Acts across various jurisdictions.
The growing demand for financial transparency and accountability has led to more stringent and detailed regulations, making it harder for companies to stay compliant while maintaining the necessary level of accuracy and disclosure in their financial reports. Stakeholders are also demanding more information, more frequently, and in formats that evolve constantly.
To make matters even more challenging, CFOs and their teams are often using legacy systems that lack the ability to automate various data collection processes, quickly generate customised reports or provide real-time insights that are crucial for decision making. Such organisations often rely on outside contractors to maintain their systems or to generate certain new reports. Dependence on these outdated tools hinders scalability and operational efficiency, leaving CFOs struggling to keep pace with growing business demands.
To add to these, the fast rise of new technologies and digital platforms presents a new set of challenges for organisations. Finance teams are now bombarded with sales pitches from a vast amount of software providers, all promising to solve the challenges above.
Unfortunately, most of these software solutions specialise in only a few of the reporting and planning processes that finance teams are responsible for, or are limited to certain industries or jurisdictions. As a result, organisations end up deploying multiple software solutions in order to manage different aspects of their reporting and planning landscape. Not only does this become costly, but finance teams are no longer as efficient as they were before, spending the bulk of their time operating, maintaining and administering multiple software systems instead of applying their expertise where it’s needed.
Without an efficient, automated and database-driven reporting system, businesses are exposed to several risks, including governance and data security. Eventually, collating data and generating reports for various stakeholders becomes far too cumbersome and time consuming for financial teams, leading to escalating inefficiencies.
Finding the right balance
We’ve come to realise how every reporting and planning process, regardless of industry, function or complexity, always consists of the exact same components. From needing to integrate with- and import data from multiple sources, to grouping, calculating, consolidating and analysing data, to generating final output reports and presentations, people always need to receive, process and make sense of data the same way.
With the right consolidation, reporting and planning software, like Finnivo®, companies have one software solution they can use for all their reporting activities. From integration with multiple source systems, to collating information from multiple systems, people and locations, to extensive analyses or the publishing of final output reports and presentations like management accounts, annual financial statements, board packs and other compliance reports.
Lessons learned
Not only was it eye opening to see how CFOs from many different countries all experience the same challenges as CFOs in South Africa do, it’s encouraging to see how software developed in South Africa is at the forefront of solutions available globally.
Despite regional and economic disparities, the fundamental challenges of financial reporting are universal. Financial reporting solutions should be about more than just implementing software, but a strategic partner in transforming how financial reporting is done, and as CFOs continue to navigate an increasingly complex business environment, the right tools will make all the difference.