The real cost of poor statutory reporting processes
A recent report, by SSON Research & Analytics, commissioned by Thomson Reuters, found that while only 11% of those surveyed listed ‘cost’ as a concern, over half (53%) confirm that their businesses prioritise minimizing errors in their record-to-report processes. This emphasis on reliable, up-to-date data underscores the critical importance of accurate statutory reporting for corporate governance.
Yet, even though they are recognised as a critical business need, statutory reporting processes are often overlooked and neglected in organisational improvement initiatives.
And, it shows. Despite global technological advancements, statutory reporting has not kept pace with optimisation and automation technology in other financial processes. In fact, most statutory reporting tasks are still performed manually, leading to inefficiencies, errors, and delays, which in turn lead to financial penalties, legal risks, and reputational damage.
The widespread use of manual spreadsheets and inconsistent policies, alongside data fragmentation due to a lack of standardisation and centralisation exacerbates the complexity inherent in corporate governance processes, impeding decision-making and requiring even more time-consuming intervention.
The hidden costs of getting statutory reporting wrong
Nearly one-half (47%) of tax departments describe their position as reactive and 11% say it’s chaotic.
Chaos can be costly. Tax errors, audits, fines, and penalties can all result in a loss of revenue, but even more importantly, a loss of reputation and customer confidence for businesses.
Imagine, for a moment that your company underreports its income due to errors in statutory reporting – made by under-resources, time-pressed teams with too many manual inputs. The consequences could include having to pay back taxes on any undeclared income, plus interest, penalties, and fines from the relevant regulatory authority. But what if the news was leaked that the company’s corporate governance was poorly managed? What would customers think? Would new prospects trust your business? Would investors become skittish? What about the employees responsible for the errors? What would poor performance do for team morale, and hiring prospects?
Recently, there has been a growing trend of increased regulatory scrutiny and enforcement of statutory reporting requirements, which has led to even higher penalties for non-compliance. Alongside this, the increasing complexity of regulations makes it more difficult for businesses to ensure accurate and compliant statutory reporting using traditional, manual methods.
Navigating regulatory complexity effectively
Emerging trends and challenges globally have made compliance with statutory reporting requirements more challenging for businesses, with regulatory authorities placing a greater emphasis on transparency and accountability, demanding accurate and timely financial reporting. Many regulatory bodies are also becoming more proactive in identifying and addressing non-compliance, leading to stricter penalties and enforcement actions. The impact of digital transformation, data privacy concerns, and remote work environments, simply exacerbate this complexity.
And, while no-one can remove complexity from their organisation entirely, they can accelerate their business’ ability to navigate through it by centralising statutory reporting and organising data and processes within a single, efficient platform.
Accurate data management from trustworthy sources is a critical component of any tax compliance process and using technology solutions to help your business maintain a single source of data truth can help your business maintain a high standard of corporate governance.
A single, secure source of data, designed specifically to house tax information and integrate with reporting software allows for the streamlining of audit requests and access to historical data without concerns about mismatches or overwriting, helping eliminate errors. Standardised and efficient data import processes, like transferring / sharing data with outsourced service providers via a hub infrastructure, multi-year tax attribute support, as well as cloud-based hosting to provide unlimited storage can also provide efficiencies and cost savings across the business.
The case for optimisation
The right platform should provide a complete audit trail and accurate version control, ensuring transparency and accountability in the reporting process. A centralised source of regulatory truth can help build more reliable, automated processes that drive efficiency and help mitigate the risks to your business’ reputation.
Technology solutions like Thomson Reuters ONESOURCE™ can not only improve data consistency, workflow efficiency, and overall collaboration, but can also provide insights into tax and trade performance, which can be used to identify opportunities for improvement and help businesses make more strategic, data-driven decisions:
- Quick data collection and flawless reports
Automation cuts the risk of human error and helps teams work faster. With the latest data management tools, your people can collaborate efficiently.
- Seamless compliance across the globe
With continuous updates from trustworthy experts, your team will always have the latest information on changes in regional laws. One-click machine translation gives leaders control – no matter where they are.
- One platform for all data
Centralised data from every corner of your business gives teams full visibility. With API-enabled software, you can integrate all your existing systems and gain a comprehensive view of your data.
- Staying on top of the latest legislation
Trusted content is updated automatically via the cloud, so you never fall behind. With over 1 million direct tax validations, 3 million global rule updates, 100 million trade updates, and the expertise of over 200 editors, you can be sure you’ll stay ahead of regulatory changes.
A new approach to corporate governance
Accurate and up-to-date statutory reporting can be immensely challenging for even the most experienced businesses. Constant changes in regulations, lack of manpower, and outdated systems can put extra pressure on corporate governance teams.
But, adopting the right technology solutions, with advanced automation and AI-enhanced functions, can help play a crucial role in transforming statutory reporting and helping businesses maintain corporate governance. Optimising your business’ statutory reporting solutions can help automate repetitive tasks, such as data entry and reconciliation, freeing up resources for more strategic activities.
Technology that uses real-time data can enable businesses to more accurately monitor their financial performance, and cloud-based platforms can provide scalable and flexible solutions for statutory reporting, reducing the need for significant upfront investments.
Find out more about how Thomson Reuters solutions can help you improve your corporate governance ONESOURCE Statutory Reporting – Thomson Reuters Tax & Accounting – UK/EMEA or contact our team directly to discuss the best technology options for your organisation.
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