Silo-breaking tips for global statutory financial reporting
The benefits of moving to a centralised model, organised around a global or regional shared service centre (SSC), far outweigh a siloed operation. Centralised models today address compliance processes such as statutory financial reporting with ease.
Centralisation is becoming more commonplace. A report by Thomson Reuters and SSON found that close to three in four organisations will have adopted a shared services or similar centralised strategy to manage statutory reporting by 2025.
A siloed approach has the potential to reinforce impractical ways of working, from what could potentially be standardised across the organisation. What is more, silos hamper the visibility so crucially needed across the process and numerous data sources.
The challenges of the pandemic have elevated the strategic role of SSCs in impacting business decisions and expanding scope. This means that siloed working needs to go. Here are four tips to help break down silos in your statutory financial reporting process.
1. Prioritise process improvements
Silos are more easily broken when there are superior processes to replace them with. Aim to redesign processes based on what the organisation needs, then establish a standard for each process.
Across statutory financial reporting (from the preparation of financial statements to notes/ disclosures), a lot can be standardised and streamlined through centralised teams. Consider breaking the process into steps and aim to standardise and automate to reduce the time your teams spend on checking for data consistency. Further, consider the time they spend on researching the array of content updates to accounting standards and other in-country regulatory disclosures across the jurisdictions you operate in. Coupled with formatting, referencing and other burdensome manual tasks your teams dedicate time to, the need for standardisation and technology is more apparent.
Action: Nominate process owners within the department and give them responsibility for implementing end-to-end processes. This ensures they have the necessary authority to harmonise processes in line with organisational standards.
There is a definite move towards a central model fulfilling most jurisdictions for statutory financial reporting but depending upon priorities and the operational outfit of your organisation, you may consider a hybrid model. Whichever model you adopt, harmonisation is necessary to reduce the time, costs and risks associated with disparate, complex, and inconsistent process.
2. Drive change management
The organisations that embrace change and seek to gain competitive advantage thrive. If you have decided to break silos and harmonise your process, then you have made an important step towards a faster, more efficient process.
It is imperative to engage with internal stakeholders to conduct gap assessments of current and future processes. These assessments can materialise in the form of harmonising processes, from mapping, documenting to standardising processes. As these changes take place, be mindful of the effects they can have on your people.
Ensure that you identify detractors and pain points early on. This means addressing attachments to old ways of working and any staff insecurities about documenting their processes.
Action: Find success in an internal change program that fosters knowledge building and rewards staff for empowering each other. Share why the transformation is necessary and what benefits it will bring to their day-to-day role as well as to the organisation at large. Transformation is an opportune time to revisit your country-specific disclosures and align them with best-practice content.
3. Find the right technology solution
Technology is the enabler that brings processes together, reducing manual activity, risk, and cost. It also helps to improve controls and efficiencies, especially within virtual team settings.
When it comes to statutory financial reporting process, content-rich technology with pre-tagged global templates in the local language coupled with translation capabilities can address localisation concerns. Cloud-based platforms are better suited to this type of work, as they enable organisations to share data remotely and securely.
Another benefit to deploying technology is that centralised platforms support and enable finance transformation. It is easier to scale a standardised process than to extend multiple.
Action: Ensure your technology solution integrates local content from the “big four” accounting firms. This is critical to successful harmonisation, as it provides assurance that mandated local compliance rules are being met. Look for a solution that integrates a universal language-translation function can essentially “de-language” the entire statutory financial reporting production process.
4. Set the “tone from the top”
The removal of departmental silos can lead to new tech-enabled ways of working and a greater focus on value delivery.
Division managers who set the tone from the top and take a business-first approach will yield better results. Their influence and leadership are key to gaining buy-in for process harmonisation plans. Team leaders also need to advocate for process excellence across statutory financial reporting process to ensure staff are aligned on business objectives.
Action: Measure results from before and after implementing process efficiencies, such as compliance milestones met and other benefits including cost savings. There should be an uptick in productivity and data transparency from the new benefits that have come from breaking down silos. The less tangible benefits of harmonisation, for example, more accurate reports that are consistent across the whole enterprise and delivered more quickly, can be at least as beneficial to your organisation as the more tangible measures, even though they are qualitative.
Organisations are often burdened by silos within global statutory reporting. Many audit processes undergo multiple iterations due to inconsistent data and process management approaches. This increases the risk of non-compliance and penalties for accidental breaches.
Global harmonisation of end-to-end processes fosters collaboration and offers a greater sense of purpose for individuals and teams alike.
Best-in-class cloud-based content-driven technology is expected to drive seismic changes in shared services. Fortune favours the bold — those who are willing to do what is necessary to safeguard the future of their business. Are you one of them?
Statutory Reporting Proposition Lead, Asia & Emerging Markets, Thomson Reuters
Sakshi has over a decade of professional experience in the tax and tax technology industry. She works closely with Shared Service Centres and multinational customers propelling their adoption of technology to meet global tax and financial reporting requirements. She is a Chartered Accountant from the Institute of Chartered Accountants of India.