Disclosure Management Buyer's Guide
This guide provides a high summary overview of Disclosure Management including many of the difficulties that we’ve seen users experience combined with practical advice on the process of selecting the best Disclosure Management software and the key features users should look for.
Buying Disclosure Management software has its challenges
Whatever route you go, SEEING IS BELIEVING. Case studies and customer success stories are valuable and earn their place in the process, but vendors have a tendency to only showcase their most successful projects.
Every credible vendor will be willing to demonstrate their product and be scrutinised by your subject matter experts to evidence that their software can meet your most intricate requirements.
What is Disclosure Management?
Disclosure management is the process of collating your financial results and capturing commentary when producing anything from board or management report packs to statutory and regulatory reports, typically after you have completed your group consolidation process.
The process is often referred to as ‘the last mile of finance’ and it finds its place between Corporate Performance Management (CPM) and Governance, Risk and Compliance (GRC) processes. It has historically been an arduous process, but specialist software can help automate and streamline these processes to reduce the time it takes to produce these reports as well as improve accuracy and control by reducing manual ‘copy + paste’ steps required by finance teams.
Companies of varying sizes from every industry that need to prepare reports on a periodic basis can benefit from a structured disclosure management process with a well-rounded disclosure management tool. Some examples include:
How should I go about selecting the
best Disclosure Management software?
Identify your principal requirements before you start looking at vendors – refer to the ‘Top 10 Features’ section to discover the typical capabilities that businesses normally look for. It may be useful to read our iXBRL Reporting buyer’s guide.
Vendors will typically provide their own consultants or point you in the direction of their implementation partners. Verify that these consultants have proven experience and product knowledge. After all, a fantastic solution implemented poorly, is a poor solution.
We have simplified this process by including the main Disclosure Management contenders and their relevant features for free on our site. Book demos here with one or more vendors and we will facilitate the process and insulate you from the initial sales hassle.
Far too often training is dropped as “cost-saving exercise”. Ensure you spend the time training your staff on the software – it will greatly increase the adoption rate across your business and reduce your reliance on expensive variable resource in the future.
Engage with all stakeholders (Procurement, IT, Finance & Actuarial) to determine your final requirements and perform your full software and vendor due diligence. Use our free tailorable Request For Proposal (RFP) pack to get you started.
Purchasing an annual support package from the vendor or an implementation partner can be more cost effective than trying to manage it all yourself. Look for packages that include bug fixes and managed software upgrades.
What are the challenges of
Disclosure reports such as the Annual Report and Accounts or Board Packs include a variety of financial and non-financial data. Setting up and maintaining efficient integration with a selection of different platforms can be challenging, especially for multi-listed companies with complicated statutory and regulatory reporting landscapes.
Reporting documents can often require input from multiple business functions including finance, risk, compliance, tax, company secretarial, actuarial, etc. Defining a collaborative, governed, working environment where these contributors can work together and communicate efficiently to overcome interdependencies and overlapping deadlines is not easy.
Ensuring consistency between different parts of the same document requires an understanding of the whole document and a keen eye for detail. Data may be inconsistent across source systems and results also tend to be scaled, be it to thousands, millions, or even billions for some of the largest organisations. This may introduce casting errors where the sum of all parts does not necessarily equal the total, or discrepancies where tables are rounded differently. Manual adjustments or journals may be required to keep the data in check. The time it takes to identify and correct these errors whilst ensuring that cross chapter references to the same value remain intact cannot be underestimated.
Closing your books may be efficiently managed, but preparing report packs and statutory disclosures can be cumbersome, resource intensive and slow. It is vital that report packs are published in a timely fashion as they are instrumental in monitoring the business and making key business decisions. For listed businesses in particular, the time taken to report statutorily has resource utilisation and efficiency consequences and impacts the external perception of your business. Managing these tight and overlapping deadlines is a real challenge, but very important to drive value.
In order to achieve comparability between reports published by different companies, regulators are constantly changing the way reports need to be published. One of the biggest changes in recent times is the introduction of iXBRL which aims to standardise reported data enabling simpler comparison of businesses whilst also making the documents ‘machine readable’. This introduces yet a new step in the process and can ultimately delay the final publication of your reports. A single taxonomy may contain thousands of concepts (tags) making tagging hugely time consuming and potentially prone to human error. Our iXBRL Reporting buyer’s guide provides more detail on the challenges.
Despite having the best intentions, integration with upstream systems, and strict processes, you are inevitably going to have to deal with multiple iterations and therefore need to be able to compare different document versions. Multiple contributors, competing views, late data changes all need to be managed and relevant stakeholders informed on a timely basis. Controlling this merry-go-round can undoubtably bring significant pain and frustration during your disclosure management cycle.
The process of regulatory and statutory reporting tends to be infrequent and often only occurs annually, or sometimes bi-annually and unfortunately it always comes at the stressful times of the year. Which means:
- managing additional specialist resource requirements during these relatively short and disruptive peaks is particularly difficult. Can you find enough work for these resources throughout the year, or is it more cost effective to hire these resources on a short-term contract basis?
- owing to long periods between reporting cycles, staff turnover may result in new operators executing the processes. This tends to mean new staff having to learn unfamiliar systems and new business processes. Complex processes and systems exacerbate the propensity for human error.
When producing statutory reports, you need to provide figures for prior years. It is imperative these prior year comparatives are consistent with the numbers you reported last year. However, reporting requirements can change, such as the introduction of new regulation, which may require you to restate last year’s figures. Even the slightest change in your business which may only introduce a handful of new line items into your disclosure notes can cause disruption. Most software packages struggle to deal with these changes efficiently.
Top 10 features to look for when buying
the best Disclosure Management software
Whether you are looking for a tool to perform management, statutory, or regulatory disclosures, you will need software that increases accuracy, efficiency and control. Large groups or organisations may have a stronger desire for improved collaboration, and tools that integrate with multiple source systems.
Naturally, the costs will vary significantly depending on the complexity of your requirements. Below is our list of top 10 features within Disclosure Management software that will help streamline your process.
One of the major benefits of disclosure management tools is that they allow you to retrieve data directly from company source systems (such as consolidation applications, ERP systems, data warehouses, and other business intelligence systems) as well as supporting excel spreadsheets, rather than having to manually rekey or copy paste information into reports. Examine your reporting landscape and ensure that you choose a Disclosure Management tool that has the relevant connectors.
On top of this, think how your end users are going to interact with the final reports. Most tools are very similar in this respect and tend to allow you to publish your reports to a format of your choice at the click of a button. Some of the standard output options include:
Validations are a must-have. Without the ability to define systemised validation rules, it is going to be almost impossible to guarantee accuracy and mathematical consistency of numbers reported throughout your document(s), particularly when scaling and casting comes into effect. Some tools even have the ability to automatically identify totals and subtotals and build in these validation rules for you. This can be a real time saver!
3. Roll Forward
One of the key benefits to a Disclosure Management tool is the time savings that it brings to your office of finance. This comes from their so-called ‘roll forward’ functionality, which streamlines the following:
- copying prior year figures, along with any manual adjustments, to ensure comparatives are consistent with the numbers you reported last year;
- copying validation rules over to your new document; and
- if relevant, carrying your iXBRL tagging rules forward.
Not only does this save time but it improves accuracy and consistency by reducing the potential for human error. Ensure you get your chosen software providers to demonstrate their roll forward functionality and find out how it handles the addition or removal of rows and columns in your various disclosures from one year to the next.
4. User Experience
It is imperative that you select a tool that is intuitive and easy to navigate. Look for a familiar interface such as Microsoft Word, Excel, or PowerPoint. Some tools offer rich built-in workflow features that guide users through the process to manage the editing and approval processes as well as automatically notifying teams and individuals when preceding steps have been completed. This is particularly valuable when you consider that these reports tend to be infrequently used and therefore some-what unfamiliar to users.
Many documents require input from multiple business functions, such as finance, actuarial, risk, compliance, tax, etc. Having the ability to define different owners for different sections of the document and concurrent user activity, rather than having a single document owner, will significantly reduce processing time and improve accuracy. Additionally, some tools offer collaboration between preparers and reviewers, with an ability to share notes, offer detailed explanations and challenge facts.
6. Adjustments / Overlays
The ability to adjust imported numbers on the face of the document is an absolute must. However, some Disclosure Management tools give enhanced control over these adjustments such as:
- enforcing check-in commentary when making changes that are above a certain threshold value/percentage;
- an adjustment report, detailing who and when the change was made with associated commentary; and
- control over which adjustments should be overwritten when reimporting values from your source system.
7. Version Comparison
Version comparison is a particularly useful feature when working with multiple contributors and finalising those final last-minute adjustments. Comparison reports can help reduce the time required when reviewing and re-reviewing documents by highlighting only the objects that have changed, giving board members and auditors confidence in the integrity of the document.
8. XML/XBRL/iXBRL Tagging
Many advanced Disclosure Management tools allow you to tag elements directly in the tool during the production of your report, enabling the automated production of your report in XBRL format without the need to send the document to an external provider. Rather than manually tagging reports each period, Disclosure Management applications that allow for reusable mapping of reported disclosures to relevant XBRL taxonomies can save you precious time during those intensive reporting cycles. See our iXBRL category for more details.
9. Data Governance and User Rights
Ensuring unwarranted change is imperative to a smooth process. Rich features that allow you to assign approvers to different chapters of a document and block any future changes to approved chapters are extremely valuable, particularly in the case of larger organisations. The ability to assign users as contributors to specific chapters or document elements will also help ensure you document’s integrity.
10. Cloud-Based Tool
Cloud-based tools are becoming more and more popular amongst IT departments and for good reason too. Cloud-based SaaS (Software as a Service) solutions make access to product support easier, and enable quicker deployment of updates and bug fixes. In addition, it is particularly valuable if you are interested in a Disclosure Management tool with iXBRL tagging features as it means seamless integration of new taxonomies and taxonomy updates. Finally, we are steadily seeing the increased adoption of Machine Learning (ML) and Artificial Intelligence (AI) in all forms of software, including Disclosure Management. Machine learning algorithms study user behaviour trends, and typically requires a cloud installation – on-premise typically restricts the software from accessing this information.