More than a compliance exercise
Financial reporting helps strengthen corporate governance. It is not an end in itself, but a means to the chain of actions that sustains a business and creates value for shareholders. 74% of the surveyed companies say that their managers, board members, and investors were positive that they could make informed decisions enabled by good financial reporting.
Even though there are considerable benefits, it is common for many companies to struggle with the basics of gathering data and producing sound financial reports. Matters like achieving accuracy and transparency across all the local operating subsidiaries of a multinational require considerable effort.
At the same time, financial leaders need to be selective about what functional activities truly add value and what not, and who they can delegate the latter to. It was reported that financial leaders who made a difference invested more time on commercial insight, and less time on transactional work.
This type of workload, including standard analytics and reporting, could be entrusted to an external party that is able to handle great volume with high efficiency. When a business has high days sales outstanding, an external specialist could usually manage the collection process from end to end whist requiring fewer resources from the financial leaders.
In Atradius Collections’ case, its global presence and strong brand help get results. The connectivity and continuity between all local operating teams are also maintained. This improvement of the accounts receivable process is both cash- and cost-effective. A 35%-46% reduction of cost was recorded from improvement and automation across key finance processes.
To lead an organisation’s financial health and performance, financial leaders can make changes today by improving their next financial reports and reconciling information from the local operating entities. Once the reports are delivered promptly with detailed business insights, the financial leaders move one step closer to being a strategic partner to their business.