How to Prepare Annual Reports Efficiently in 2021
At the end of the fiscal year, many companies are confronted with the same picture – Excel files as far as the eye can see and labor-intensive processes still carried out by hand. Never-ending rounds of clarification ensue. This so-called “Last Mile of Finance” can be a cause for headaches in the finance department. The result? Errors seep into the preparation of the annual reports, enlarging the risk for potential regulatory ramifications.
But a convenient disclosure management process doesn’t just have to be wishful thinking. Find out what is meant with the term disclosure management and a disclosure management solution. What challenges lurk beneath the surface when it comes to preparing annual reports? How can a software solution help you to easily prepare your annual reports?
What is disclosure management?
The term disclosure management is generally used to describe the fulfillment of external and internal reporting obligations, in particular the process of preparing the year-end annual report. While internal reporting serves to inform management and other stakeholders in order to develop strategic business opportunities and to maximize profitability, the aim of external reporting is to meet regulatory disclosure requirements. High quality standards must therefore be observed, especially when preparing external annual reports, because regulatory risks may arise if these standards are not met.
What challenges does the annual report present?
To make a success of the disclosure management process, you should familiarize yourself with the challenges you may face when preparing your annual reports. We have summarized the most common problems encountered in the preparation of annual reports.
1. Too many manual processes
Despite the continued advancement of digitization bringing automation to once time-consuming manual processes, many companies still rely on MS Excel for the preparation of their annual reports. Error-prone Excel spreadsheets that on any given day get edited by every which member of the finance team complicate the disclosure management process further.
2. A lack of data transparency and data quality
The moment you use more than one system to produce the annual report, the results become all the more opaque. Extracting data from various source systems can also lead to unnoticed errors creeping into the results when preparing the annual report.
3. Heterogeneous data
ERP source systems, CRM systems, or completely different tools: company data can be found in any number of forms and structures. Heterogeneous data that are spread out over different systems require software for annual report preparation to consolidate the data and process it further.
4. Coordination that lacks efficiency
Constant rounds of clarification are a daily occurrence in many finance teams. In order to avoid delays and bottlenecks in the preparation of annual reports, you should rely on professional software with integrated task management.
How can professional software help me during my own disclosure management process?
To avoid serious consequences for your company down the line, a high quality standard for your reporting should be ensured, especially when it comes to your annual reports. A convenient option is to use professional Disclosure Management software. Such a solution for the preparation of annual reports must be able to...
- prepare and centrally manage unstructured data from various source systems, such as MS Excel, source systems for financial accounting, and OLAP.
- allow for internal validation options.
- create closing documents in various formats, such as Word, InDesign, or electronic reporting formats, such as the electronic version of the German Federal Gazette or ESEF.
This flowchart shows you how to prepare annual reports efficiently, letting you gain the upper hand in your disclosure management process:
Fig. 1: Process flowchart for annual report preparation
A professional software tool for disclosure management serves as an ideal solution for creating reports directly from the data of your tool for financial statement preparation.
These advantages ease the load when preparing annual reports:
- Optimal workflow support
- Sophisticated permission concept
- Validation and consistency checks
- Full MS Office integration
- Updating and pre-completion of reports at the press of a button
- Integrated XBRL processor
- Print-ready annual reports
Are you looking for further information and assistance to help you prepare your annual reports? Our website shows you how easy it can be preparing your annual reports.