Five reasons to outsource your statutory financial reporting

Five reasons to outsource the preparation of your financial statements:

1. Keep up with reporting requirements

Financial reporting requirements seem to increase year on year and have become more complex as a result. In our recent Global compliance study, only 24% of respondents thought that compliance requirements would get less challenging in the next five years. In recent years, new IFRS standards covering areas such as leases and revenue recognition have been implemented. While there is some uncertainty over the extent to which they may be mirrored in UK GAAP revisions, the direction of travel is clear. Narrative reporting requirements have also increased, with new carbon and energy reporting requirements coming into force, as well as pressure to improve the quality and detail of disclosure made in directors and strategic reports. Increased regulatory pressure on auditors is also causing auditors to exert greater pressure on their clients to improve the quality of disclosures made within financial statements. What has been disclosed historically is often no longer good enough. For some entities, the European Single Electronic Format (ESEF) mandate adds further requirements with regards to the format of filed financial statements.

Outsourcing brings peace of mind that your business adheres to the latest reporting requirements and regulations and provides quality disclosures, in every jurisdiction you operate.

2. Tell your story and tell it well

Companies face increasing pressure from external stakeholders, including the media, competitors and the public. Your financial statements represent an extremely important piece of publicly available information and are an opportunity to portray the business in the best possible light. In our recent Global compliance study, 58% of respondents thought that compliance is an opportunity to create value. It is critical that an appropriate level of focus is given to ensuring both technical best-practice and the explanation of the business, its performance and its strategy.

3. Minimise liaison with auditors

When the preparation of financial statements is outsourced, liaison with your auditors regarding the reconciliation of figures and disclosures made is also outsourced. This can help minimise queries and reduce the time spent interacting with your auditors. Our team have experience of working closely with third-party audit teams, many with backgrounds in audit themselves.

4. Retain focus on core tasks

For many finance teams, the preparation of financial statements is something that is only thought about once a year. At this point, it takes time to familiarise themselves again with what was done last year and research new financial reporting standards or new disclosure requirements. This distraction takes focus from core tasks and can be inefficient.

Outsourcing can provide access to specialist expertise, enabling your team to keep their focus on core business activities.

5. Access technology

Many businesses still use manual processes for preparing their financial statements – often based on Word or Excel, with manually updated supporting schedules and notes.

In our recent Global compliance study, respondents thought that the two biggest contributors to meeting compliance obligations were effective technology and skilled people. Outsourcing can provide access the latest technology and to people with the skills to interpret the data. Businesses can benefit from the use of technology to both streamline the process and eliminate many areas where errors can occur. For businesses with structures that include a large number of statutory entities, benefits achieved here can quickly multiply and result in significant cost savings compared to preparing in-house.

If you are thinking of outsourcing part or all of your finance function, we can help. Our outsourcing team bring local knowledge, expertise and support, every step of the way.

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