Carbon Accounting Management Platform Benchmark…
The annual publication of accounts presents its share of challenges each year. It is a long and complicated process due to the multitude of actors to be coordinated, specific tasks, all of which are time-bound and subject to regulations.
The annual publication of the financial statements introduces its fair share of challenges every year.
It is a long process complicated due to the number of actors (accountants, management controllers, operational ...) involved who must coordinate with each other. The process consists of specific tasks that are often time-consuming and manual (setup of provisions, production of appendices, reconciliation of intercompany transactions, etc.). Bounded in time by a date to be respected imperatively, the process is carried out each year with increasingly shorter deadlines. Under the supervision of statutory auditors, it incorporates ever more stringent regulations (SOX, IFRS, GDPR, Sapin, etc.) on publications increasingly demanding appendices and extra-financial items (such as Corporate Social Responsibility).
Recurring issues related to the process can be found below:
At Sia Partners, we have identified 3 main areas for improvement to remedy this:
The delays in reporting by subsidiaries are the first cause of dissatisfaction in the consolidation process. Indeed, seemingly not very complex, this step is more complicated in the field, especially for newly integrated perimeters: heterogeneous account plans, many subsidiaries, different accounting practices, regulations, etc ...
To remedy this, it seems essential to work on a convergence of the following:
- Evaluation standards cover almost all cycles. The most common tackle invoices not received from suppliers that are valued based on the prices showing in orders, invoices to be drawn up and valued based on purchase orders, and the adoption of standard production costs for the valuation of stocks.
- Cut-off agreements can be developed to shift the date of consideration of certain information before closing. These conventions must be used in a limited and justified manner.
- Estimation standards may be developed to evaluate actual data unavailable at the closing date. These estimates must be based on statistical data and/or forecasted budget data.
Thus, given the challenge the annual closing represents, all these improvements can bring relief to finance departments. In addition to saving considerable time, they allow for consistent monitoring and are at the forefront of audit and compliance work (production of appendices: IFRS standards, provisions for risks, CSR...).
The contribution of technology is key but is not the only actionable lever; the organization of teams, the simplification of practices, and training also have an impact. It is a continuous improvement as a project that must be carried out throughout the year to successfully complete the closing.