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Help for reporting issues faced by car retailers

23rd Mar 2017
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How the ‘ultra-smart’ spreadsheet is tackling financial reporting difficulties faced by car retailers

The reporting challenges faced by car retailers, that are part of a group, are complex to say the least and until now, spreadsheets have proved to be most ‘straight-forward’ solution for consolidation purposes and analysis. They are the easiest choice as users are already familiar with them, they are scalable and the IT department does not need to be involved whenever a new report is needed. When weighed up against an expensive enterprise solution, the spreadsheet invariably wins hands down.

However, issues can arise when spreadsheets are stretched beyond their intended use for complex modelling and for collaborative work. Versioning issues go hand in hand with traditional spreadsheets and manually copying and pasting different users’ work too often leads to errors. The sheer breadth of the industry’s reporting requirements makes them unwieldy and increasingly complex.

Reporting to 4 different audiences

Reporting issues can arise as a result of having to report for four different audiences.  

  1. Operations managers will require management information and KPIs for each department within each of their branches. These results are then presented in various ways to provide performance comparisons (e.g.) by department, by branch, and by franchise, and these various reports all require comparisons against the budgeted and prior year performance
  2. Investors, banks and other business partners like to see results consolidated by statutory entity, often including significant analysis of performance against budget and prior year
  3. HMRC & Companies House require accounts in statutory format with sufficient analysis for Group Corporation Tax returns , VAT returns by VAT group, including intrastats, where appropriate, partial exemption calculations and PSA
  4. There are always requests for the production of ad hoc reports. Examples of those reports might be to produce cost comparisons across the group or to find out accumulated costs, revenues or KPIs for various activities across the group.

Most reporting is designed to primarily meet the requirements of Operations, as they are the users that utilise the information to make decisions at a departmental level and that will impact the profit and performance of the business. Operations require this information regularly on a daily, weekly and monthly basis, which means that the consolidation process becomes prone to error whenever updates are made. These range from adding new branches, franchises or product lines as this changes all of the linked spreadsheets. This is where anyone involved with spreadsheets will realise the nightmare begins, as any change or where a code is linked, all subsequent spreadsheets will need to reflect that change.

In some organisations, these issues have been addressed through utilising a database that is controlled and accessed by just one person. This can, however, bring about a risk of a single point of failure.

The challenges

  • Lack of uniformity in reporting and presentation, particularly where groups include various acquired branches
  • How to find a group wide/consolidated view particularly with regard to ad hoc reporting
  • Third party reports are often not adequately catered for by DMS providers
  • Reconciliation of third party reports to operational reports. The various reports are often produced by different personnel within the business; all with differing logic and assumptions resulting in conflicting results

 

How new ‘smart’ Enterprise spreadsheets can transform reporting

So how can groups of car retailers cling on to their beloved spreadsheets and make them robust enough to satisfy regulators and auditors who have already indicated that they consider them to be a major potential risk?

One option is to industrialise them and transform them into Enterprise spreadsheets that are connected to a secure Cloud server designed for group financial reporting and management information. This automates the entire close process, down to P&L, balance sheet, cash flows and other required reports, saving days of laborious and error prone consolidation.

20 entities will take minutes, not days to complete group reporting

In practice, entities can exist anywhere in the world and all are required to submit financial data to group finance at regular intervals. With Enterprise spreadsheets, each one is connected to a Cloud server via a simple spreadsheet interface from which, data is fed and all the local formats are translated to a group chart of accounts.

The data is immediately available to view upon submission to the server so they can see a real-time consolidated position of the group. This approach means that the finance team can take immediate control of modifying the fine details of the financial consolidation process and associated adjustments such as defining currency conversion logic. It has the added benefit of ensuring formulae and rules are executed correctly as well as being supported by a full audit trail that logs every change involving accounts or administrative data, which is securely stored in the Cloud server.

20 entities in different parts of the world and all running different systems will typically take minutes not days to complete group reporting and finally, car retailers can breathe a sigh of relief.

Brian Donnelly, CEO, Synapse Information Limited and developers of Cloud CFO for group financial consolidation and reporting for the motor vehicle industry. http://www.synapseinformation.com/ 

 

 

 

 

 

 

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By CammieDHereford
09th May 2018 05:23

Awesome post. Thanks for sharing this.

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