The CFO and senior figures working in the financial operations department need consistent and comprehensive reporting more than most. While this is generally accepted as a major necessity, it is not always easy to achieve and there is a growing trend of dissatisfaction and frustration among CFOs and finance professionals about the depth and quality of the reporting they are receiving.
This is not a criticism of an organization or even individuals, it is more about an assessment of the legacy technology stacks in place and their capabilities when it comes the detailed and comprehensive reporting.
Today's reporting requirements have become more nuanced and there is a greater need for consolidated figures around cashflow and forecasting to be delivered in a digestible reporting format. Many of the reporting technology stacks in operation at multinational companies around the world are simply not designed to deliver this level of reporting and accounting data.
In this article, we will look at some of the reasons why reporting technology is in need of an upgrade to be in a position to respond some of the more nuanced demands from the office of the CFO.
More depth, more detail
Every CFO needs a high-level overview of what is happening at the various departments within the organization they work for. In the first instance, this is usually about getting a handle on operating costs- key metrics on where money is being spent and in particular where it is being spent at very high levels. This helps the CFO make an assessment of whether these high levels of spending are justified and sustainable in terms of the bottom line or if a change in approach around capital expenditures is needed.
But, as the years have gone by, there has been a greater need for the CFO and financial operations executives to drill down into the micro level. The high-level macro overview is no longer enough and there is a need for better financial reporting to complete the full picture. This full picture can only be achieved with comprehensive, detailed and consolidated reporting. Reporting that enables the reader to filter and get additional detail when and where they need it. It is essentially about getting financial reports that tell the story behind the data, KPIs, profitability figures and statistics. A story that reveals insights and trending results in a way that can deliver solid future predictions around what costs might look like in the future.
When there is a need for more depth, more detail and more nuanced reporting, there is a corresponding need to have a flexible and responsive technology stack in place that can deliver this kind of sought-after reporting. Companies operating with legacy technology or no longer fit for purpose reporting stacks are falling behind the curve when it comes to delivering the kind of reporting and financial data needed by the office of the CFO today.
Consolidated and comparative
Reporting today of any kind also needs to be consolidated-by this we mean reporting that gives the overall operating costs figures for combined countries within the network of the global organization. While it will always be important to understand individual country costs, the CFO and finance operation professionals need to bring everything together for a consolidated regional overview.
Figures need to cover clusters, operational hubs and even continents. Siloed reporting or fragmented technology stacks that do not integrate or connect very well with each other make this kind of reporting a challenge. It forces finance professionals to manually put together this information from a disparate and disconnected selection of different reports-this is a manual process, often cumbersome and always time-consuming. Such a process is no longer sustainable and reporting today needs to be consolidated and comprehensive.
Reporting also needs to be comparative, both across individual elements as well as countries. HR and global payroll reporting for example needs to be capable of showing comparisons between individual countries so that a CFO can get a strong handle on labor costs as well as employee headcount numbers into various entities and companies that may be spread across multiple different countries and regions. They need metrics and forecasting data for budgeting, decision making and risk management to help them comment on the overall success of any business model in operation.
A flexible, agile and responsive reporting technology stack is needed to deliver this level of consolidated and comparative reporting. The CFO is part of the C-Suite leadership team that need consistent access to detailed reporting in order to help them develop and apply a strategic plan. Data is key to any decision making and step one is ensuring that such data can be extracted and delivered in a clear and concise manner.
Of CFO`s put better or faster reporting in there top 5 priorities for 2021
NetSuite Brainyard, State of the CFO Role, 2019
Different and better reporting
The CFO’s reporting needs have understandably evolved and changed over the years- as companies grow into global organizations and enter new regions and territories, more data is created and this data needs to be analyzed, interpreted and understood.
Reports which helped finance professionals fully understand costs and company spending will always be required but due to the global pandemic, there is increasing scrutiny on where money is being spent and why. The global pandemic his thrown the business world into crisis mode and the CFO often wants reporting on a daily basis to track and monitor financial expenditure.
Different and more nuanced reporting requirements have also come to light in recent years-an example of this would be gender pay gap reporting. There has been a surge in media attention on this sensitive issue and many companies around the world have made commitments about achieving a fair balance when it comes to gender pay. Reporting is needed to tell them where things stand at their organization today and help them build a road map for what they want to achieve when it comes to the gender pay gap divide.
Not only that, but some countries are also now making gender pay gap reporting a mandatory and legal requirement. More and more countries will join the list and global employers will face a legal obligation to disclose accurate and detailed reporting around gender pay equity. There will therefore be a requirement for a more advanced technology stack to ensure an organization is in a position to deliver this kind of reporting on a consistent basis.
A technology solution
The best way to avoid frustration around the quality and depth of reporting at a multinational organization is to invest in a technology platform that is flexible enough to provide varied reporting and which also comes with a range of tools and filtering options that allow finance operation professionals to create the kind of reports they need on an ongoing basis.
The office of the CFO needs a reporting technology platform that is fit for purpose in the present moment and also capable of meeting changing future needs around reporting at various departments such as human resources, IT, global payroll, compliance and others.
The best scenario is to ensure that this technology stack is integrated and connected with other IT infrastructure inside the organization so that the necessary two-way dataflows exist to provide the data transfer foundations needed for consolidated and comprehensive cost reporting on a global scale.
When CFOs are running the reports they need from an agile and responsive reporting technology stack, they can then be a lot more confident about quality and accuracy of the reporting they are receiving. Reporting at this level tends it to make its way up the chain all the way to board level so it is absolutely essential that the data is accurate and can be produced in a digestible and easily understood format. Strategic decision making at the highest level often happens inside the boardroom and it is necessary to have fit for purpose reporting for such decision making to be balanced and well informed.
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