Differences in work style, work-time, priorities, and access to updated data are only a few examples of difficulties that multiple teams working on a single project may face. Getting everyone to collaborate and work as a single unit on the Annual Financial Report (AFR) may be a challenge in itself.
As per the ESMA iXBRL mandate, that’s coming into effect on 1st January 2020, you are required to submit your AFR in iXBRL format. So, if you think getting everyone to complete the AFR without any errors is difficult, you will soon have to face the challenge of converting the AFR into iXBRL too.iXBRL reporting is not only important from the compliance point of view but also important for potential investors, market confidence and self-vs-competitor analysis (more on this in a future blog) With so many people involved in the process, it is imperative to have your teams working as well-oiled machinery.
Benefits of team collaboration
The main benefit of being in sync with one another is that there will be a track of work done by each team member. Preparation of AFR would be much easier and everyone works on the latest version of the document.
Three Common challenges while preparing for AFR
1. Collaboration between multiple teams
With so many people; authors, reviewers, audit, and analyst teams involved in the process, preparing an AFR usually becomes a tedious task. Here’s an example: Carl and Doug, missed the deadline for filing their AFR. The reason it happened was Carl, a financial analyst in the compliance team, was located in Paris, and Doug, an auditor was located in London. Carl was responsible for coordinating between the auditing and accounting teams.
After having done an initial audit of the report, Doug had sent in a bunch of queries to Carl, which he in turn had to send to the accounting team to edit and the CFO to get their sign-off. However, Doug had not sent those queries all at once. He had sent them over a period of a week and in several emails. Amidst all this back-and-forth of emails, Carl got delayed in forwarding the last communication that came in from Doug. This led to someone from the accounting team missing to update the latest numbers in the report. This small miss snowballed into a much bigger delay in the process. End result: missed filing deadline.
2. Maintaining multiple versions
Continuing with our earlier example; while reviewing the AFR after its completion, Doug found erroneous data in the document and informed Carl. Carl, in turn, informed the accounting department about it and asked them to fix it. The accounting department had to not only update the data but also inform the consolidation team and the CFO about it and make sure they got a sign-off from them too. All of this happened through back-and-forth emails, which ultimately lead to someone in the team losing track of the latest version.
3. Updating data in multiple places
Another issue that comes up with such number updates is that it isn’t just one number that is updated in one place in a report. A single number update can mean checking every place in the document where the number is referenced and updating it there as well.
4. Converting the AFR into iXBRL
Even when you surpass the difficulties of streamlining your AFR preparation process, you will soon have to reckon with a new requirement. Effective 1st Jan 2020, you will be required to convert your AFR into iXBRL. iXBRL, or Inline XBRL, is an open standard that enables a single document to provide both human-readable and structured, machine-readable data.
You might be able to close your books in a matter of days, yet take weeks to publish your reports. This could affect, or even delay analyses and decisions by the management and stakeholders. That is exactly where a Disclosure Management Software is just what the doctor ordered.
What is Disclosure Management Software?
Three Main Benefits of Disclosure Management Software
Easy collaboration among teams:
A good Disclosure Management Software enables your teams to easily collaborate, even while working from different locations, and still retain full control and visibility of their documents.
Centralized version control:
With solid Disclosure Management Software, you no longer have to sweat it out on checking and comparing multiple versions of the document. Your teams will always be working on the latest version. You can create, view, and manage multiple versions on one platform. You can easily view and compare different document versions, add comments on the document and review the numbers.
A Disclosure Management Software will have links to data sources so that updates in numbers at the source automatically reflect the updated numbers throughout the document.
Investing in a Disclosure Management Software will go a long way in streamlining your AFR preparation process. Opting for a Disclosure Management Software with built-in iXBRL capability is simply the best decision you can take for your compliance reporting. IRIS CARBON® is a world-class, cloud-based, highly secure platform that not only helps you prepare your AFR with ease and accuracy but also has AI/ML-enabled automated XBRL tagging, and in-built iXBRL capability and supports 23 EU languages.
Get complete control with IRIS CARBON®, the ability to always view the latest version, online review, and easy document management; you are assured of nothing but the best.