Is the USA Ready for Real Time Financial Reporting?
SCOTTSDALE, Ariz., Sept. 9, 2014 /PRNewswire/ -- While many aspects of business have accelerated dramatically in the last 10 years, the speed of the financial close and reporting to shareholders has not improved. Column5 research into the USA's top 250 corporations shows that the average time for reporting year end results to shareholders has largely stood till over the last 10 years.
Some fast close champions have emerged in the last 10 years, significantly driving down time to report including: Schlumberger, Verizon, Monsanto, Wells Fargo, JP Morgan Chase, American Express and AT&T who have all cut reporting timetables by over 25% in the last 10 years. Although the USA still leads the way for speed of reporting compared with other major industrialized countries (USA Top 100 average: 29 days, Japan Top 50: 35 days, UK FTSE100: 52 days, German DAX110: 71 days) Column5's research does indicate that there is room for further improvement:
- The US FT Top 100 companies average days to announce year-end financial results in 2014 was 29 days, 2 days more than in 2004
- There are still wide discrepancies, with the fastest companies reporting in 14 days (JP Morgan Chase and Wells Fargo) and the slowest 60 days (Berkshire Hathaway)
- Hi-Tech Pioneers of the virtual close are now playing second fiddle to the financial institutions (e.g. Cisco was 2nd fastest to report in 2004, 14th in 2014, Oracle 3rd fastest in 2004, 17th fastest in 2014)(2)
There has been a growing clamour from some quarters for the dawn of a new age of "Real Time Reporting" for stakeholders. An Aberdeen Group research report (1) published in July was the latest to argue for the need for speed. Nick Castellina, the Aberdeen Group Research Director observed, "No longer is it acceptable to put employees through lengthy and confusing consolidation, reconciliation and reporting processes…… Top performers empower employees with the tools they need to prepare reports and provide them to key stakeholders as quickly, accurately, and efficiently as possible." Compelling sentiments, but the unique Column5 research shows that this is one area where technology, productivity and efficiency improvements are failing to benefit many shareholders.
David Den Boer, CEO of Column5 Consulting comments "It is clear that there has been a standstill overall in reporting timetables in the largest US corporations and this seems to reflect a combination of increased demands for disclosure, the long term impact of Sarbanes-Oxley and little concern from some company directors about the speed with which year-end results are reported to shareholders. There certainly seems no real desire to embrace an era of real time reporting."
Fast close – a missed opportunity
Den Boer went on to say, "This is a missed opportunity for companies to demonstrate just how much more efficient their financial processes have become in the last 10 years. Those that have invested in accelerating their close have not only pleased their shareholders and analysts but have also realized that a faster close drives significant internal benefits through process efficiency, quality improvements and standardization of systems and processes and also enables faster and better internal analysis of performance on a regular basis. Corporations should look again at their close cycle performance and consider how to use the metric to drive internal efficiency and reward their shareholders with more timely financial results."
Column5/EPM International Close Cycle Rankings 2014 Research
A PDF of key aspects of the research, including Close Cycle Rankings for the 250 largest US companies as well as major global markets beyond the US, can be found at: www.epm-international.com or please contact Column5 at [email protected] to request a copy of the report.
Column5 will be presenting key findings of the report in a free webcast event on Thursday, September 11. Please visit: http://info.column5.com/webcast-close-cycle-rankings-2014 to register.
Notes
- Real-Time Financial Reporting: The Need for Speed, Aberdeen Group, July 2014
- Alcoa Inc have maintained their leadership position for fast close (7 days to report in 2004 and 8 days to report in 2014) but are no longer included in our research as they have fallen out of the USA Top 250 Companies by market capitalization.
About Column5 Consulting
Column5 Consulting is a specialist in Enterprise Performance Management (EPM) processes such as financial close, financial consolidation and reporting and SAP EPM solutions, in particular SAP BPC (Business Planning and Consolidation). We work closely with our clients, assisting them with the full EPM lifecycle, from Blueprint and Road Map, detailed process and system design to successful implementation and configuration capabilities. Business benefits realized typically include accelerated reporting or internal consolidated results as well as externally reported results.
We also offer extended support and training services which help organizations liberate full value from their SAP EPM investment as well as technical infrastructure and hosting services to help our clients operate effective and efficient infrastructure to support SAP EPM. Our unique EPM Academy offers traditional class room based training but also an innovative on-demand e-learning SAP EPM training program which is being used widely by our clients both to support initial SAP EPM projects but also to sustain and nurture SAP EPM skills so that the investment in EPM is fully exploited.
We work with a wide range of clients across multiple business sectors in the US, Canada, UK and the Philippines, including some of the world's most iconic and best known brands. We also work closely with our colleagues in EPM International to provide comprehensive EPM solutions to all our clients.
For more information, press only:
Becky Wright
Global Marketing Director
Column5 Consulting Group
Phoenix, Arizona, USA.
[email protected]
+1.480.779.6983
SOURCE Column5 Consulting
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