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Jannie Marais - Regain Financial Control

Consolidated view gives back financial control to CFOs

Take control of your portfolio. Invest in technology and regain financial control as a CFO.

Jannie Marais | CQS

n today’s economic environment, and given the numerous competitive pressures that businesses are faced with, it is little wonder that companies are being forced to streamline their entire operation to have some chance of success. Belts need to be tightened and focus must be placed on core competencies. What’s more, frequent accurate financial reporting is becoming more and more critical as it not only provides a platform on which to view the financial standings of the business, but also ensures risk can be mitigated, broader business decisions can be made more accurately and the business can be opened up to investment.

In fact, the importance of financial compliance cannot, and must not, be underestimated. Rather, this should form the basis of sound financial reporting, especially as African businesses start to take their rightful places in the global market and as businesses look to infiltrate and expand across the continent.

As a result, many Chief Financial Officers (CFOs) are facing a rude awakening as their scope of liability grows. In fact, a new level of accountability has been introduced, as CFOs are required to sign off on all financials, making them responsible for reporting on whether the annual financial statements are fairly presented in accordance with the applicable financial reporting framework. To ensure not only that the financial statements are accurate, but that the business is compliant and audit ready, many businesses are turning to technology and in particular, financial reporting tools, to make this process easier and to mitigate risk.

With ever-changing compliance requirements and important new standards on the horizon, today’s corporations need reporting solutions that are flexible, efficient and dynamic, to ensure they stay on top of the company’s financial performance. CFOs are therefore looking for a solution that not only guarantees reporting accuracy, but supports documentation transparency with built in audit trails to minimise risk and guide them on changing International Financial Reporting Standards compliance requirements. Additionally, they seek solutions that will enable them to undertake relevant financials efficiently – allowing them to get it done accurately, in less than half the time it used to take – so they can focus on core business issues. Having the right system in place will allow them to sleep easy.

Automating financial processes reduce potential risks as monthly management reports and the annual financial statements run off the same data through the automated systems, making the entire process easier, as there is also an audit trail to follow.

What’s more, what often happens in companies is that their monthly financial reporting does not tie in with the annual financial reporting – as such this is not a true reflection of the business.

It also allows financial statements to be done more frequently, though only required once a year – which enables businesses to have a real view of their business health. This information is constantly updated and readily available so that they are able to respond much quicker to business growth and opportunities.

In essence, financial reporting software eliminates the risk of errors and inconsistencies associated with using massive spreadsheets. A built-in validation process immediately brings any discrepancies to the fore. It also drastically reduces the time and frustration spent on the drafting and preparation of Annual Financial Statements. The result is that businesses can provide their auditors with the information they require, in the correct format, so there is no need for the auditors to re-work anything – with obvious cost benefits to the company.

What’s more, as technology advances, it changes the way the financial team in companies work. The intelligent cloud offering adapts the environment – especially as more organisations adopt a remote model of working. With cloud and integrated SmartSync technology, whether the relevant financial team member is online or offline, at home or at the airport, they can work on the company’s financial reporting in real-time. If they are offline, their changes will simply be updated the next time they connect to the network. Team members can thus work on local copies of financial reports, with each file synced automatically in the background so that data integrity is not jeopardised. This opens up a new level of working for the financial team in any organisation.

In addition, it is imperative that companies look for technology ambassadors, those individuals that will drive a vital agenda among colleagues, peers, practices, etc. to foster in-company adoption of this type of technology, which in turn will contribute to business growth and increased productivity.

Unforeseen liability lurks seemingly around every corner for CFOs who need to personally certify that the annual and interim financial filings do not contain misrepresentations, and that the financial statements and other elements of financial information give a fair presentation of the company’s financial condition. What’s more, given that they can be personally sued for damages, there needs to be evidence to prove that the CFO acted with prudence and diligence – and that adequate control measures have been taken.

It is no secret that emerging technologies are continuously fuelling innovation in many industries, and the financial reporting sector is no different. The evolution to automated financial reporting software is inevitable to realise innovation of benefits such as cost, speed and efficiency while balancing requirements of security and compliance – and of course risk mitigation. Additionally, as technology becomes more intuitive, it will continue to address even more pain points and become an enabler for financial reporting – changing the way businesses operate where it ensures they are both connected and intelligent from a critical financial perspective.

Regulatory pressure shows no sign of disappearing and needs to be a prime issue on the agenda in order to drive significant growth in compliance activity, which in itself is probably driving increased fraud awareness and detection. Making the decision of when and how to undertake audit and compliance procedures needn’t be a complex process, but it is one that needs to be done. Investing in the right technology can be one of the most critical aspects needed to do this. And for businesses and CFOs operating in an ever-changing risk environment, surely it’s worth it?