Financial reporting is a practice that’s constantly evolving. Each year, companies have new regulatory standards to comply with, more data to report, and different market conditions to contend with. In today’s volatile corporate landscape, public companies cannot allow any single note disclosure or line item to be subpar.
That’s why best-in-class companies focus on producing exceptional disclosures to maintain compliance, investor confidence and of course, a streamlined and efficient internal workflow. The formula for being able to achieve this disclosure quality is dependent on a framework consisting of 3 critical components:
In a recent roundtable discussion, senior finance professionals outlined what’s most important for great disclosure today:
- Automating manual processes – Teams that embrace new technology and leveraging financial reporting automation software see a reduced risk in manual errors and the added bonuses of saved time, money and sanity – a win-win situation across the board.
- Keeping on top of accounting standards – Revenue recognition, new lease accounting standards…. need we say more? As accounting regulations are issued and add new and complex layers to the disclosure process, it’s imperative that financial reporting teams work as a group to understand and comply.
- Monitoring competitors and peers – They say that you’re only as good as the company you keep, but the most successful financial reporting teams want to be better. That’s why even amidst the chaos of quarterly reporting, it’s critical to keep one eye on the market by reviewing peer disclosures to remain competitive and relevant.
Organizations should also take an in-depth look at internal disclosure management processes to identify what works, what doesn’t, and what steps need to be taken to improve the process and produce better disclosures.
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A disclosure management process that’s set up for success has these high-level characteristics:
- A direct connection with internal data sources to reduce manual work and ensure accuracy
- Workflow that promotes reporting efficiency and data validation
- Planned approval processes and a permission system
- A consistent method for conducting detailed competitive analysis and peer comparisons
- Forecasts, projections and risk assessments informed through market analysis and verified by qualitative and quantitative evidence from reports
This is where software such as Certent Disclosure Management plays a crucial role for companies like Aqua America, to optimize financial reporting processes and produce exceptional disclosures.
- Access to the Right Resources
From the training and support you receive from your software provider to the industry events you attend, consistent and credible access to the right resources is one of the strongest tools available for creating better disclosures.
Here are some resources that are integral to helping improve financial reports over time:
- Professional development opportunities –Staying current with industry news, trends and best practices through reading, networking and knowledge sharing is one of the best ways to improve the disclosure management process. Financial Executive International’s annual conference Current Financial Reporting Issues (CFRI), is a great example of one such industry ‘meeting of the minds’ that features relevant workshops, panels and breakout sessions. Other industry resources like webcasts and white papers are available to equip you with the knowledge you need to produce better SEC filings.
- Vendor training and support – Most financial reporting software vendors like Certent offer robust ongoing training and support services. These teams are comprised of CPAs and XBRL gurus whose passion is to teach clients how to better understand and apply complex accounting practices. It’s an opportunity to learn on the job and put the knowledge to use in the constant journey of disclosure improvement.
Rome wasn’t built in a day and neither is the ‘perfect’ disclosure filing. But now more than ever it’s imperative for public companies to strive toward producing exceptional disclosures to remain favorable in the eyes of regulators, investors and internal stakeholders.
Certent Disclosure Management is the best step to help you get there faster – book a tailored demo today and we’ll show you how