The Evolution of Financial Reporting
A standardized structure to financial reporting as we know it today took a couple of centuries to evolve and can be traced to the formation of the Institute of Chartered Accountants in England and Wales (ICAEW) in 1880, and the American Institute of Certified Public Accountants (AICPA) in the U.S. in 1887. The following developments cemented this further.
The Companies Act introduced in the UK in 1900 required all registered companies to have auditors to report on the balance sheet presented to the shareholders at the end of the financial year. The Securities and Exchange Commission SEC, formed in the USA during the summer of 1934, required auditing of the firms and laid the ground for financial reporting. Following legislation like the Securities Act of 1933 and the Securities Exchange Act of 1934 led to the establishment of GAAP (Generally Accepted Accounting Principles) for the US listed companies.
A few decades down, in the 2000s, IASB (International Accounting Standards Board (IASB)) came into existence that was responsible for setting International Financial Reporting Standards (IFRS). IFRS endorsed by the International Organization of Securities Commissions (IOSCO) in 2000, changed the cross-border security offerings in global capital markets. The decade started with an accounting revolution with efforts to reconcile IFRS and US GAAP. But the most significant event happened in 2005 when the EU required all EU-listed companies to adopt IFRS standards. Thus began the era of standard financial reporting with common definitions and accounting standards.
The recent developments in the financial reporting space have been rapid and impactful.
With digital reporting and the introduction of XBRL, financial reporting went through another evolutionary cycle. Technology-enabled software solutions made financial data and reporting a source of invaluable insight for financial planning and strategic business decisions. The CFOs moved out of the shadows, and the finance executives became the business storytellers.
Additionally, Disclosure Management requirements and iXBRL tagging have made financial data fair, accessible, and transparent for investors.
The introduction of ESG and sustainability reporting has pushed the envelope for financial reporting even further. Newly introduced compliance mandates and soon-to-be-adopted sustainability standards require an additional layer of granularity and depth in the financial reports submitted by businesses.
From paper-based bookkeeping to excel sheets and now cloud-based software solutions dedicated to each specific category of financial reporting, the whole process has transformed for the better. The financial reporting market size has been steadily expanding and is projected to grow to USD 36,556.79 Million by 2030.
Finance executives have access to several tools to automate the reporting process and focus more on extracting insights and planning for long and short-term goals.
Types of Financial Reports
A firm’s financial reports share information about the activities, performance, and overall financial health over a specified period. Financial reports are also an indicator of current strengths and future potential and aid in making projections about growth and profitability.
The objective of the financial reports is to provide detailed information regarding:
- Revenues
- Expenses
- Profits
- Capital
- Cashflow
The above information falls under three primary types of financial reports that most companies opt for and consist of the balance sheet, income statement, and cash flow statement.
Financial reports are used by investors, creditors, regulatory authorities, industry consumers, market experts, and unions for various reasons. Transparent financial data helps the market and protects investors; therefore, regulatory bodies keep introducing improved financial reporting and disclosure mandates.
The constantly changing financial reporting landscape makes it imperative to choose tools and solutions that account for all changes and updates in the mandates to effectively meet financial reporting goals.
In this blog, we list all the financial reporting categories and explore the best tools within each to enable finance executives to choose the most relevant ones for the business.
Categories of Financial Reporting Solutions
As a part of the ERP suite that organizations use for day-to-day activities, the enterprise performance management software helps organizations manage their budgeting, accounting, and financial reporting. ERP systems are customized solutions to meet the specific needs of a business. Based on their deployment options, ERP systems are categorized into:
On-site or On-premises ERP Solutions – The on-site ERP systems are implemented and maintained in physical office spaces within the organization’s premises. The ERP system is hosted on the internal computers of the organization, giving them complete control over data.
Cloud-based – Cloud-based ERP systems are hosted on the web and offered as SaaS where the organization can store and access data on the cloud through the internet connection. It works on a subscription model with continuous training, support, and updates with customization offered by the service-providing platforms.
Hybrid – The hybrid ERP models bring together the advantages of on-premises and cloud platforms while offering the flexibility to migrate between the two based on changing needs. It can also become a unique solution for an organization when the platform in isolation proves insufficient.
Accounting Software
Accounting software helps record and manage day-to-day financial transactions like basic invoicing and billing, bank reconciliation, expense tracking, inventory management, tax compliance, online payments, timesheets & project management, and report generation.
Traditional spreadsheets have gotten replaced with technology solutions that have reduced paperwork, errors, and loss of financial data due to damaged documents. Automation, AI, and machine learning reduced data discrepancies, and improved data security is shaping the future of accounting software solutions.
Sage Intacct – A cloud-based software that automates routine processes with a diverse range of features and is affordable, scalable, and apt for small and medium size businesses across sectors.
Acumatica – Streamline your accounting process across multiple entities with Acumatica. Multi-dimensional reporting, personalized dashboards, and custom reports will provide insights your business needs to grow.
Nomisma – Manage your accounting process efficiently using CRM and practice management and accelerate your business with automated bookkeeping, accounting, payroll, taxes, and more.
Zoho Books – One of the best cloud accounting platforms, it is an all-encompassing solution that can take care of your core accounting needs, automate workflows, and keep your business GST-compliant. The best part is this integrated platform can accommodate all the growing needs of your business.
Intuit QuickBooks – Track sales, produce and send invoices and manage your accounting data on the cloud without having to become an expert.
Oracle NetSuite – A web-based professional services automation platform that takes care f your project and resource management, time and expense tracking, project accounting, billing, invoicing, and much more.
SAP Business One – An entire financial management software that offers solutions from financial planning, accounting and financial close, tax and treasury management, accounts receivables, billing cycles, and revenue management to GRC and cybersecurity.
Invoicing and Payment Software
Invoices and payments are the primary financial transactions for any business that happens on a day-to-day basis. The sheer volume of these transactions through card payments, electronic transfers, and online payments requires technological aid for efficient tracking and record keeping and to avoid erroneous billing and delayed payments. Cloud-based invoicing and billing platforms offer simple, flexible, and scalable options to take care of your invoicing and billing needs.
Sage 50cloud – Reduce your time spent on admin tasks by automating them using the Sage 50cloud platform, which has powerful finance and accounting features to boost your business performance.
Square Invoices – Need invoicing solution for your product or services, online or in-person invoicing, Square Invoices offers solutions for both.
Billtrust Invoicing – Billtrust Invoicing provides flexible invoicing solutions, from self-service portals to AP provider integrations. Automate your invoicing process with data extracted from your existing ERP system for faster, more insightful, and cost-effective invoicing.
FreshBooks – Not an accountant but have to take care of your invoicing process? FreshBooks offers a simple and easy-to-navigate interface to cover all your current invoicing needs and upgraded plans for when your business scales up.
Zoho Invoice – A free billing software for service-based businesses to track projects, send estimates, and create custom invoices with a built-in client portal to communicate with the clients.
Xero – Affordable solution for small and yet-to-scale-up businesses, Xero allows adding additional features like back reconciliation plans, inventory tracking, and several other integrations.
Chargebee – In the middle of scaling up? Chargebee offers a subscription billing and revenue management platform that allows you to scale globally with currencies, compliance, and taxes all taken care of. The platform automates your lead-to-ledger workflow across the revenue stack.
Tax Management Software
Tax compliance is a critical component of financial reporting management. Businesses have to ensure the timely filing of taxes in the required formats. The taxation process is time and effort intensive and is prone to human errors. Taxation software provides solutions that help businesses optimize their time and resources better. Some benefits of tax management software include better accuracy, minimal error and time investment, and e-filing with a few easy clicks.
TaxSlayer Premium – Solving tax problems for over 50 years, TaxSlayer offers expertise, accuracy, and priority support to their customers to meet their tax filing requirements.
Cash App Taxes – A 100% free solution to file federal and state taxes with accuracy. An authorized IRS e-file provider Cash App Taxes complies with security, privacy, and business standards set by the IRS.
Crunch – Save your time, money, and tax with this automated tax & accounting software with a monthly rolling subscription and no contracts, and with an option to upgrade whenever you need.
Sage 50cloud – Combine the power of a trusted desktop solution with secure online access and Microsoft Office 365 integration and manage your accounting, invoicing, cash flow, inventory, and taxes effortlessly.
Quick Books Online – Need access to your business data and insights from anywhere? Choose a software solution that manages your accounting and payment needs and also saves its cost as tax-deductible.
Avalara – Get your tax compliance right with a comprehensive finance tool set with multiple indicators, compliance standards, and tax categories to meet all your needs.
Fastspring – A trusted e-commerce partner for companies selling software and SaaS managing every payment need under one roof.
Expense Management Software
Expense reports record the expenses made on behalf of the organization and track purchases and reimbursements while providing insights regarding expenditures, budget goals, spending trends, and alignment with the financial objectives. Expense Management software automates the process making the receipt-to-reimbursement faster and streamlined.
Concur Expense by SAP – Concur helps track your spending by automating, connecting, and simplifying your expense. Capture, submit, and approve an expense report instantly.
Web expenses Expense Management – Web expenses automate employee expense tracking by using Google-Vision-powered OCR and drag-and-drop reporting. The solution works seamlessly between the desktop and the app version and can connect with the existing ERP for data integration.
Expensify – A free app that allows expense tracking, receipt scanning, and reimbursements.
Zoho Expense – Travel and expense management solution that helps automate expense reporting by providing better control over spending and offering critical financial insights for better expense planning and management.
TripActions – Built-in policy controls, smart virtual and physical cards, auto-categorization, and accounting integrations are some of the features offered by this solution.
Happay – A travel and expense management ecosystem to manage corporate spending, reimbursements, petty cash, business expenses, payments, cards, travel, and more. The platform offers complete visibility & control, end-to-end integration, and security.
Spendesk– The platform offers 7-key solutions for the payment process with control and visibility with real-time reports.
Budgeting and Tracking Software
Financial planning and analysis have evolved from a mere recording and reporting exercise. Modern-day businesses require financial management strategy aligned with larger financial goals. Budgeting is an important aspect to consider to achieve those goals. Cloud-based or on-premise budgeting and tracking software solutions have enabled organizations to manage their budget better and use budgeting insights to make better financial decisions.
Personal Capital – Personal Capital is a finance software solution that provides a 360- degree view of your money. You have all your accounts in one place with reporting options, desktop capabilities, an investment management platform, and spending tracking. The advisory tools help with an investment checkup, investment fee analysis, financial planning, cash flow tracking, education-cost planning, and real-time tracking of net worth.
Sage Intacct – This platform takes care of all your financial planning needs with a promise to slash your closing time by 50% and increase productivity by 40%. Tailored to meet the needs of your specific industry Sage Intacct is the best-in-class cloud financial solution.
YNAB (You Need A Budget) – Put your financial goals on the path of efficient budgeting with goal tracking, reporting on financial habits, and support from this award-winning platform.
Mint – Monitor and analyze your personal finances, including personalized insights, customizable budgets, and subscription monitoring with this No. 1 most downloaded personal finance app.
Goodbudget – Struggling to manage your budget? How about putting money in labeled envelopes but only digitally? Meet your financial goals with this platform which is accessible from mobile devices, tablets, or desktops.
Stash – Stash is essentially an investing app but has an in-built budgeting tool that can track spending and set and automate saving goals. Passive saving features, no overdraft fees, no minimum balance, no hidden fees, and direct deposits in your account up to 2 days faster, making it a great option.
Honeydue – Struggling in your relationship? Perhaps you should consider collaborating with your partner to combat your financial challenges and in the bargain improve your relationship as well. Along with Wall Street Journal, even we think it’s a great idea, and this platform is perfect for your money and relationship troubles.
Financial Planning and Analysis Software
Financial planning and analysis include the entire gamut of processes required to meet the financial goals of a business. It involves planning, budgeting, forecasting, modeling, analysis, scenario planning, and financial reporting and needs a team of experts to take care of each aspect. A business’s finance and financial health depend on strategic decision-making for the present and future. The best financial decisions are data-driven and financial planning and analysis software which enable organizations to leverage their financial data for optimal results.
Workday Adaptive Planning – Workday Adaptive Planning is a flexible and easy-to-use enterprise planning software that can easily connect with your ERP/GL or other data sources. It can expedite your financial, workforce, sales, and operational planning and help meet the challenges of a constantly evolving business environment.
IBM Planning Analytics – IBM® Planning Analytics with Watson is an AI-infused, continuous integrated planning solution that breaks down business silos for better information and thus, accurate plans and forecasts for FP&A, sales, supply chain, and more.
Prophix – Prophix simplifies and automates your financial process by using pre-built functionality and pre-populating data to create logical and consistent budgets, plans, and forecasts.
OneStream Platform – OneStream is a unified CPM software to consolidate your reporting, planning, and analytics through a single, extensible technology platform.
Oracle Cloud EPM – A leader in the EPM area, Oracle Cloud EPM is a complete cloud solution that caters to all your financial and operational needs across functions and in-depth using embedded intelligence to help you make better business decisions.
CCH Tagetik CPM – CCH Tagetik Corporate Performance Management is a cloud platform with embedded predictive intelligence and an open architecture that can accelerate your close, increase your planning agility, and empower your decision-making.
Jedox EPM Software – Jedox EPM Software allows you to optimize business processes, boost data quality, and slash planning cycles. The best part is the option to build your customized application with minimal IT support and leverage agile deployment and faster turnaround time. They offer pre-built Jedox ERP models too.
Compliance Software
Businesses need to manage compliance in areas covering corporate governance, risks, and disclosures. To ensure quality standards and meet the mandates and regulations set by the regulatory bodies, organizations need to manage their compliances in a manner that is efficient and sufficient while meeting the challenges of a global business environment and constantly updating and changing regulatory mandates. Compliance software helps organizations meet these challenges in a precise and time-sensitive manner in accordance with the relevant standards.
GRC Solutions by SAP – SAP GRC solution allows you to continuously monitor risks, security, and compliance across your business with predictive capabilities, agile compliance processes, and flexible solutions for cyber threat monitoring.
Archer Regulatory and Corporate Compliance Management – Don’t get ‘compliance fatigued’ in your efforts to remain abreast with the changing mandates and updating rules. Archer Regulatory and Corporate Compliance solutions help you consolidate your compliance and assurance activities and minimize the risk of compliance failure.
Thomson Reuters Compliance Management – Thomson Reuters Compliance Management solution aids you in gathering, monitoring, and analyzing your regulatory data and tracking developments to meet regulatory goals. Access their world-class compliance training to support your business.
Workiva – Connect your business processes with a one-stop platform for financial reporting, ESG, audit, and risk with Workiva. A modern platform to help meet the challenges of the complex business environment.
Sanction Scanner – The sanction Scanner is an AML (Anti-Money Laundering) solution that can help you with name screening, transaction screening, and monitoring, customer risk assessment, and AML compliance.
Quixy – This award-winning platform allows you to create custom applications, optimize business processes and monitor work across the organization.
Workato – Integrate and automate your workflow across the organization using this low-code platform. Workato offers enterprise power, serverless operation, and improved security with speed and simplicity.
Financial Data Visualization Tools
Organizations track and monitor their performance across functions and parameters daily for day-to-day insights and future planning. However, vast amounts of data generated by businesses remain underutilized without proper data visualization tools. The reporting dashboard software enables organizations to track their KPIs across functions through intuitive dashboards, and interactive data visualization allows data analysis in real time.
Tableau – Use data to address your critical business questions with AI-driven insights that help with deep exploration and data-driven decision-making.
Zoho Analytics – Zoho Analytics is a self-service BI and Analytics Platform to analyze your data for insights and create impactful data visualizations.
Domo – Domo is a low-code data app platform that allows you to integrate all your data and use it in a flexible, and secure manner.
Looker – Looker & Google Cloud’s data analytics platform helps you create custom apps to deliver tailored data experiences with invigorated workflows, and integrated insights with modern BI and analytics tools.
DashThisKlipfolio – Track data, collaborate with teams by sharing accounts, add insights and create beautiful reports with DashThisKlipfolio. All their plans offer all their features irrespective of the business size or choice of plan with personalized support. The platform is a complete package to meet all your reporting dashboard needs.
Grow – Grow is a cloud-based BI solution that helps you create customizable dashboards and monitor day-to-day performance across multiple data sources on one single platform
Sisense – Have to share terabytes of information with thousands of users? The platform comes with a drag-and-drop user-friendly interface and eye-grabbing visualization that has revolutionized the world of business analytics.
ESG Reporting Solutions
The recent changes in the financial reporting and disclosure mandates have brought ESG reporting under the spotlight. Regulatory bodies and investors seek information regarding the environmental, social, and governance impact businesses have to ensure transparency and reduce risks.
Effective ESG strategy involves defined goals and streamlined methods to collect data pertinent to them. ESG reporting is on the path to becoming more comprehensive and granular, and organizations need solutions to help them meet the upcoming regulatory mandates. ESG Reporting solutions enable organizations to manage their ESG goals through metrics, frameworks, analysis, reports, and audit and compliance readiness.
Workiva – Workiva’s ESG solution platform offers an end-to-end solution. The platform has pre-built ESG frameworks and standards and aids in creating a sustainable strategy for your business. It collects ESG-related data and syncs them through APIs for interoperability, connects teams, and provides on-demand reports. Finally, it ensures that your ESG data is compliance and audit ready.
Planetly by OneTrust – Planetly is a leading climate-tech company that enables businesses to analyze and monitor their carbon emissions and take steps to offset them. With automated data collection, real-time analyses of the carbon footprint, and transparency and tools to reduce it, carbon management becomes efficient and simple for big firms.
Rio ESG – Rio ESG is a sustainability software platform that delivers data analysis, Governance tools, and education with its proprietary AI. The platform is aligned with popular ESG frameworks and helps you meet ESG and carbon reporting requirements and management while complying with relevant legislation.
Novata – Novata is an ESG solution for the private markets that offers baseline, advanced and integrated metrics to meet your ESG priorities. The platform promises a simple data collection process and intuitive and insightful analytics and reporting tools.
Cority – Cority is a global enterprise EHS and ESG software provider that offers a bouquet of solutions to meet your specific ESG priorities.
Audit Board – Audit Board offers a solution to streamline your ESG program management through focused data collection, leveraging materiality assessment, simplifying reporting, disclosure, and rating submissions, and identifying ESG risks and opportunities.
Onspring – Onspring’s ESG software helps manage climate-related risks, financial risks, operational risks, reputational risks, and governance issues. The software has centralized data, automated assessments, and streamlined sustainability disclosure reporting for audit-ready ESG data that investors trust.
Sustainability Reporting Solutions
Businesses need to display their commitment to sustainability goals by providing transparent information to internal and external stakeholders about their initiatives and efforts. Organizations need to chart their sustainability journey by measuring themselves against the current impact created across the value chain and actions taken to achieve future sustainability goals while meeting the reporting mandates. Sustainability reporting solutions help companies with streamlined data collection, performance benchmarking, sustainability frameworks, and sustainability compliance reports to meet international standards and mandates.
Benchmark Risk+Compliance® – Benchmark Risk+Compliance® platform can help initiate your ESG program, minimize associated risk, enhance safety and improve compliance and performance to deliver on your ESG commitments.
IntegrityNext – IntegrityNext is an end-2-end ESG risk management platform that improves supply chain sustainability in alignment with international standards and stays current with the latest ESG legislations.
Novisto – Create value through your ESG strategy with this all-in-one sustainability management platform with streamlined superior quality data collection, performance benchmarking, and effective communication with external and internal stakeholders.
Diligent ESG – Diligent ESG helps organizations drive and track their ESG progress through standard mapping and benchmarking, ESG automation and data pre-population, dynamic reporting platforms, and sustainability and energy-related data collection. Map across multiple standards – including WEF, TCFD, CDP, GRI, and SASB – and your organization’s benchmarks.
SmartHead – SmartHead allows you to have all your sustainability data in one place, including ESG metrics, CO2 calculator, KPIs, SDG pledges, impacts, certificates, reports, and more to manage and meet your ESG commitments.
VelocityEHS – Global Enterprise ESG & EHS Software- This is an AI-powered EHS & ESG software solution with predictive technology that creates efficient workflows, reduces costs, and drives sustainable outcomes for your business.
EnergyCAP – EnergyCAP is an energy and sustainability software solution that provides instant data access and manages resource consumption, reduces carbon footprint, and drives savings.
Disclosure Management Solutions
Businesses issue disclosures to share financial information and health with investors, analysts, and regulatory bodies. Disclosure management platforms allow organizations to produce, file, and publish financial statements and reports that are accurate and risk-free in a timely manner. The XBRL/iXBRL tagging required by most regulators, adds another layer of complexity to financial reporting. Disclosure management platforms with their in-built tagging capabilities and other features, enable organizations to tag, generate and file reports with ease.
Workiva – Workiva is the world’s leading regulatory, financial, and ESG reporting solutions. Workiva’s platform facilitates transparent disclosures through a streamlined process, connected data, and teams that ensure consistency in reporting financial and non-financial data.
IRIS CARBON® – IRIS CARBON® is a cloud-based, collaborative platform used for regulatory reporting while meeting the XBRL/iXBRL requirements. IRIS CARBON®’s platform is simple and intuitive, with a feature-rich Office 365-based solution that seamlessly handles your financial and non-financial report authoring.
LucaNet – LucaNet is an easy-to-use software platform for financial consolidation, planning, reporting, and data management. The platform offers features like optimal interfaces, a consistent dataset, an integrated permissions system, multilingual capability, print-ready layout, and maximum transparency.
Certent Disclosure Management – Certet is an All-in-One Disclosure Management System built on MS office which promises speed, accuracy, and consistency. The platform offers features like seamless MS integration, automated narrative reporting, version and workflow control and audit trails, multi-source data connection, and accurate XBRL tagging.
Oracle Hyperion Disclosure Management – Oracle Hyperion Disclosure Management is a complete XBRL creation and management solution. It allows you to create and edit graphically the Extensible Business Reporting Language (XBRL(c)) tagged submissions and manages your critical documents to reduce the risks of inaccurate disclosures.
Data Tracks – Want a hands-free solution for your regulatory reporting requirements? With Data Tracks all you need to do is feed your financial statements and narratives into the solution, format, tag it and extract reports in your preferred format for submissions.
SAI360 – Have an ambitious ESG program but not sure how to drive it with accurate and auditable data? SAI360 offers solutions that will start your ESG journey with early detection of regulation, broad visibility across risks, and deeper insight into happenings with accurate performance reporting.
Financial Reporting Solutions and Finance Executives – The Way Forward
Financial Reporting has undergone several changes over the past few years. A volatile business environment means that financial decision-making cannot rely on data that is old and outdated. Therefore, periodic reporting is getting replaced with technology-enabled access to real-time information.
Dedicated tech stacks for finance and solutions that address specific areas have provided access to data in a manner never seen before. The data is being used for critical business insights and telling stories with numbers thus painting a picture that is accurate and authentic.
New service delivery models with Robots and AI have reduced human intervention, and consequently, errors in data have been alleviated too. Self-Service solutions are the next step in the evolutionary process.
Finance executives will have to learn skills like cross-functional collaboration and dynamic decision-making to meet the new challenges of the new year to remain relevant.
