How members in business make light work of the annual reporting season

Finance teams discuss how they take the hassle out of the annual reporting process.

Annual reporting season is always a challenge. Last season was even trickier, due to the uncertain conditions in which businesses were trading. Finance teams work hard to ensure that any stress is minimised as they find themselves working flat out to finish the final accounts.

Some start planning early. Others switch the date of financial year-end. Tech-savvy finance teams are automating as much of the work as they can to cut down the time team members need to spend on the reporting process.

Panellists from our members in business group (see the end of the article if you’d like to get involved) share how they are taking the hassle out of annual reporting, and some of the challenges they overcame in the last annual reporting cycle.

We switched to a 10-month audit to reduce pressure

Andy Murray MAAT AATQB, finance lead, Manna Pro UK

We hold various internal finance meetings in the build-up to year-end to discuss the audit schedule, which is received in advance, with all the deadline requirements. These meetings also involve other departments, such as Supply Chain, to help coordinate the annual stock take process, which stretches over two inventory locations.

We have a rigorous requirement for the turnaround of the yearly financials, which are required by the management board based overseas. Final annual accounts are required by March at the latest. It can be a real challenge.

We held various brainstorming sessions to see how we could alleviate the additional stress of year-end and audit requirements. It seemed natural to include our group auditors to see what could be done. The finance team shared some great ideas, including bringing the audit forward and completing ‘mini quarterly audits’ or perhaps a six-monthly audit. It was suggested that a 10 monthly audit would best suit our company and the team workload. The other two options would have added greater deadline pressures.

In preparation for the next annual reporting season, we have worked with our group auditors to introduce an early “pre-audit” process which essentially audits the first 10 months of the accounting period. Once the month-end close process has been completed for the 10-month period, the auditors are provided with all backup schedules and data up to this point. This is very much a working trial. The ideal vision is that just two months require auditing post-year-end in February, allowing sufficient time for any follow-up questions between the 10 months and the final two-month audit.

We have successfully implemented numerous process improvements throughout the year. These are across transactional to month-end accounting. Transactional data entry improvements are around Debit/Credit note raising and implementing a tight timeframe to have these raised in the correct accounting periods, which has dramatically reduced additional accruals. On the other side of this, the month-end accounting process improvements have primarily centred around improving the overall audit trail, producing backup schedules to all journal entries and full reconciliations to justify the accounts in a much stringent manner.

Planning is crucial, as is breaking down tasks

Sanjiv Bali, senior project accountant, A2 Dominion

The key element to a good annual reporting process is planning. This involves having access to the yearly timetable and identifying the tasks that our team are responsible for. This helps us to break down the tasks into sub-tasks and allocate them to area specialist team members. We maintain a task tracker to navigate through the checklist to ensure everything is on track. In addition to this, we have efficient templates in place to help us to complete the process swiftly.

During the lockdown, we had to liaise with auditors remotely. Thankfully, we had efficient and productive communication tools in place such as Zoom, Skype and Teams, which helped us to overcome the challenges.

Providing large audit files to the auditors was another challenge. We used an audit portal to upload files to get past it. We’re already looking regularly at our year-end timetable months in advance, so we’re carrying out adequate planning and maintaining our team task tracker.

We have templates with data APIs to streamline the process

Clare Elliot FMAAT, CFO, ILUX

We have a very defined process, using a To-Do Task List. Each team member knows all of their responsibilities and deadlines and can see each other’s tasks, so we all know exactly what has and hasn’t happened at all times.

I strongly believe that we should only do tasks that are necessary. We never repeat anything, and we don’t do anything that we won’t use in the future. Before anyone does anything, they consider whether it is going to add value to their role, their colleagues or the business.

All of our templates are already set up, and they API wherever possible so that data flow is streamlined. Even within excel spreadsheets, all formatting and formulae are already created ready to go, so we simply have to drop numbers in place.

Last season, we were all incredibly busy as the business had grown quite significantly over the past year. Year-end responsibilities added a little more time pressure to everyone. Secondly, we had two new team members that had never completed a year-end process with us before, so it was a learning curve for them, which takes up more time for everyone. Lastly, we had a new software package, so understanding the dates and reporting capabilities from that took time.

As each year-end goes by we always add tweaks to our process; tasks that could be performed better, events that happen in a different order, new tasks that have arisen from new circumstances, etcetera. Every year is a learning curve and helps us to prepare better for the next one. The Task List is always open for the whole team to see all year. As we think of any changes throughout the year that will impact the year-end, we can simply drop in changes and notes.

Our year-end is broken into small chunks

Björgvin Vigfússon MAAT AATQB, finance manager, Westmorland Linen Rental and Laundry

In order to prevent the annual reports process from becoming a headache from A-Z, I do it in small chunks over the year. This does the trick. I make a tick list at the beginning of each reporting period of what information is required at the end. This could include revenue, cost of sale, payroll cost, VAT paid/received, for example.

As the year progresses, I then try to verify the figures each month and quarter. Once we get to the reporting period, I know they are true and accurate, as they’ve been verified multiple times. Breaking it into small bitesize pieces makes the whole process less hassle-free.

One challenge we faced repeatedly last period was the new ‘reports’ that needed producing. After a team meeting, it was decided that with each report, a small summary of the process, and the thought process of the staff member who produced it, followed each report. Following these steps, it made the reporting season easier when specific reports needed to be worked on by more than one member of the staff.

The team already has a team meeting where we looked at what went well and what could have been better. A plan has been drawn up for how we will attack next season and how we will make it easier and more streamlined than the last one. We will then see if it does.

Join our members in business panel

Would you like to share your thoughts about various issues affecting finance teams? Email [email protected] to get involved.

Mark Rowland is a journalist and former editor of Accounting Technician and 20 magazine.