Skip to Content
Automating the Last Mile of Finance (#5)
274520_l_srgb_s_gl - Copy.jpgSAP Computes Disclosure Management and XBRL Reporting to Regulators and Investors
 
In the 2013 “Magic Quadrant for Corporate Performance Management Suites,” Gartner* emphasized that disclosure management capabilities “should support specific generally accepted accounting principles (GAAP) presentation rules, such as U.S. GAAP or International Financial Reporting Standards (IFRS), to enable the preparation of statutory financial statements with appropriate commentary and supplementary notes. Increasingly, financial reporting solutions incorporate process controls for reporting and disclosure, such as templates, collaboration between the company and the financial statement publisher, business rules, workflow, and audit trails to better meet regulatory, compliance and governance programs. In addition, they should support financial reporting technologies, such as eXtensible Business Reporting Language (XBRL), as regulators increasingly require the submission of financial statements in XBRL format.”
  
The reporting of quarterly and annual reports to financial institutions and stock exchanges is the final step of the “financial close-to-disclose” process; this step is critical as it has a direct impact on the enterprise market capitalization. Would an example be necessary, a few months ago Google Inc. got its shares suspended for two-and-a-half hours after its third-quarter results were made public a couple of hours early by mistake. What’s more, it wiped 8% off the value of the company at a stroke. Google blamed financial printing firm RR Donnelley for filing an early draft of the results, which had been expected after the closing bell. This had been done without Google’s authorization and with gaps for missing quotes from Larry Page himself. What clearly spooked investors was the uncontrolled release of the results which meant Google didn’t have the opportunity for the typical earnings and briefing calls where they could have explained the context behind the figures and managed analysts’ expectations. Investors really don’t like surprises even if it’s only results being released 3 hours early.
 
The process criticality leads an increasing number of companies to examine the benefits of implementing a disclosure management solution to fully own the process. Therefore SAP decided that we would be integrating SAP® Disclosure Management, starter kits for IFRS and U.S. GAAP into our holistic SAP® Financial Close and Disclosure Management rapid-deployment solution in order to help companies secure their quarterly reporting and XBRL filing to stock exchanges and financial institutions such as the U.S. Securities and Exchange Commission (SEC). As you may be aware of, our SAP® Disclosure Management software helps enterprises achieve a faster, more accurate financial close, it also gives them a flexible, collaborative disclosure process across geographies, systems, data sources and teams (including their external printer) that would improve compliance and minimize the risk of any hiccups in the “financial close-to-disclose” process. In complement to the software capabilities we will also provide companies with XBRL pretagging, prebuilt financial reports based on the latest U.S. GAAP and IFRS regulations as well as automation of data workflow from ERP or enterprise performance management (EPM) systems up to our disclosure management preconfigured software.
USBlog05_process.png
Providing automated data workflow and consistency
As we were stating in the article “Automating the last mile of finance – From systems of record to systems of engagement“, one of the key requirements within IT is to ensure smooth data workflow and guarantee data consistency across applications. “This is particularly true for the last mile of finance”, writes Pierre-François Tchakedjian in his article “Data Workflow and Consistency with SAP® Disclosure Management” , “as the disclosure management application is being used at the end of the data-chain and consumes data from other sources of information within the company — consolidation applications, ERP systems, data warehouses, and a range of other information source applications”. Part of our rapid-deployment solution, the SAP® Disclosure Management starter kits for IFRS and U.S. GAAP have been designed to streamline data workflow and maximize data consistency when used in combination with transactional and consolidation systems, in particular SAP® Business Planning and Consolidation and SAP® Financial Consolidation applications. The starter kits embed best-practices to automatically extract data from consolidation systems, transforming and merging that data, and inserting it into financial statements, notes and XBRL instances for reporting purposes. In addition the SAP® Disclosure Management starter kits leverage both the “integrated” and “bolt-on” data synchronization approaches to automate and secure connectivity and access to the consolidation system; therefore no manual data replication between applications is needed and data workflow is simplified. Moreover the starter kit contains a set of pre-defined validation gates to ensure data consistency within the SAP® Disclosure Management application itself: pre-defined controls for the data repository, validation dashboard against Microsoft Office and XBRL data. In order to help enterprises automate consistency checks when running their disclosure management process, more than five “consistency gates” have been pre-configured in the starter kit (see graph below).
USBlog05_consistency.png
Delivering GAAP-based taxonomies pretagging
The SAP® Disclosure Management starter kits developed for our rapid-deployment solution will also include custom XBRL taxonomies designed per U.S. SEC requirements and based on the public IFRS and U.S. GAAP taxonomies published by the IFRS Foundation and the Financial Accounting Standards Board respectively. The financial statements are pretagged against these taxonomies to accelerate your XBRL filings to stock exchange authorities (see the example below).
USBlog05_pretagging.png
Providing prebuilt chapter structures for Forms 10-Q, 10-K and 20-F
Even more beneficial, the SAP® Disclosure Management starter kits also come with prebuilt financial reports whose chapter structure is synchronized Form 10-Q, Form 10-K or Form 20-F forms as defined by the U.S. SEC. When designing your filing in the software, you can start from these reports and import your Microsoft Word® files into this structure (see the example below for the 10-Q form).
USBlog05_10Q_structure.png

Releasing generic Microsoft Word® and Microsoft PowerPoint® financial statements
In addition to the Form 10-Q, 10-K and 20-F above mentioned, generic financial statements heading templates and sample items are available including placeholders dedicated to the information related to your company (see screenshots below).
USBlog05_10Q.png
USBlog05_final _report_ppt.png
Demo video clips on YouTube®
Corporate reporting is very specific to each company. In terms of content, many lines of your financial statements, your notes and all the textual information are relevant to your company only. As regards the form, the layout of your annual and quarterly reports is similar to no other. The SAP® Disclosure Management starter kits for IFRS and U.S. GAAP provided within our SAP® Financial Close rapid-deployment solution have been developed to provide you with a valuable starting point to secure and accelerate your own reporting to stock exchange authorities and investors. Would you like to see SAP® Disclosure Management starter kits in action? You can watch our demo video clips for IFRS and U.S. GAAP on YouTube®. 
    
What’s next?

In our next article we’ll give you insight on the five reasons customers choose SAP® Financial Close and Disclosure Management rapid-deployment solution to help transform their financial close-to-disclose business: speed, efficiency, clarity, simplicity and time-to-value.
   

Sincerely,

Elizabeth Milne, SAP EPM solution marketing elizabeth.milne@sap.com

Kristina Henn, SAP rapid deployment solutions kristina.henn@sap.com

Stephane Neufcourt, SAP EPM solution management stephane.neufcourt@sap.com

  

*Gartner, Inc., Magic Quadrant for Corporate Performance Management Suites, Christopher Iervolino, John E. Van Decker, Neil Chandler, February 14, 2013. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 

 

Sources

“Google Blames R.R. Donnelley for Premature Earnings Release”, Bloomberg, 18 October 2012

http://www.bloomberg.com/news/2012-10-18/google-blames-r-r-donnelly-for-early-earnings-statement-release.html

SAP Disclosure Management, www.sap.com

http://www54.sap.com/solutions/analytics/enterprise-performance-management/software/disclosure-management/index.html

“EPM + BI + Mobile = Instant Value to CFO”, SAP, 10 April 2013

http://scn.sap.com/blogs/financialclose.starterkits/2013/04/10/automating-the-last-mile-of-finance-by-combining-epm-bi-and-mobile

“From Systems of Record to Systems of Engagement”, SAP, 13 March 2013

http://scn.sap.com/blogs/financialclose.starterkits/2013/03/13/automating-the-last-mile-of-finance-from-systems-of-record-to-systems-of-engagement

“Data Workflow and Consistency with SAP Disclosure Management 10.0, Starter Kit for IFRS”, SAP, 19 July 2012

https://scn.sap.com/docs/DOC-29312

YouTube demo of SAP Disclosure Management, starter kit for IFRS, 22 October 2012

http://www.youtube.com/watch?v=-l5L0VzNl_U

YouTube demo of SAP Disclosure Management, starter kit for U.S. GAAP, 3 Juy 2012

http://www.youtube.com/watch?v=8Glp0z9KV9E

 

Legal Disclaimer

The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This presentation is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation and SAP’s strategy and possible future developments, products and or platforms directions and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information in this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP´s willful misconduct or gross negligence. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions. 

No part of the starter kits may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. The information in starter kits is proprietary to SAP. No part of starter kits’ content may be reproduced, copied, or transmitted in any form or for any purpose without the express prior permission of SAP AG. Starter kits are not subject to your license agreement or any other agreement with SAP. Starter kits contain only intended content, and pre-customized elements of SAP® products and are not intended to be binding upon SAP to any particular course of business, product strategy, and/or development. Please note that starter kits are subject to change and may be changed by SAP at any time without notice. SAP assumes no responsibility for errors or omissions in the starter kits. SAP does not warrant the accuracy or completeness of the information, text, pre-configured elements, or other items contained within the starter kits. SAP DOES NOT PROVIDE LEGAL, FINANCIAL OR ACCOUNTING ADVISE OR SERVICES. SAP WILL NOT BE RESPONSIBLE FOR ANY NONCOMPLIANCE OR ADVERSE RESULTS AS A RESULT OF YOUR USE OR RELIANCE ON THE STARTER KITS. STARTER KITS ARE PROVIDED WITHOUT A WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. SAP SHALL HAVE NO LIABILITY FOR DAMAGES OF ANY KIND INCLUDING WITHOUT LIMITATION DIRECT, SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES THAT MAY RESULT FROM THE USE OF THE STARTER KITS. THIS LIMITATION SHALL NOT APPLY IN CASES OF INTENT OR GROSS NEGLIGENCE. The statutory liability for personal injury and defective products (under German law) is not affected. SAP has no control over the use of pre-customized elements contained in the starter kits and does not endorse your use of the starter kits nor provide any warranty whatsoever relating to third-party use of the starter kits.

To report this post you need to login first.

Be the first to leave a comment

You must be Logged on to comment or reply to a post.

Leave a Reply