Only 16% of companies have fully automated compliance reporting

Good morning, 

Over the past few months, I’ve been sharing my conversations with experts about the benefits of automation in finance. One area that may need an automation boost is global statutory reporting. 

At a time when environmental, social, and governance (ESG) reporting is a priority for multinational companies, and they face a global minimum tax of 15% endorsed by the G20 leaders, rethinking approaches to compliance-based reporting is becoming a necessity. The Global Statutory Reporting and Automation Trends Report 2021, released by Deloitte and Workiva, a software-as-a-service company, found only 16% of companies surveyed have fully automated statutory reporting processes end-to-end. The data is based on a survey of 682 CFOs, controllers, chief administrative officers, finance directors, and other finance and tax leaders in countries including the U.S., U.K., France, and Netherlands, who work at companies with more than 10 legal entities. 

Some factors driving companies towards an automated statutory reporting process include meeting regulatory compliance standards, passing audits more seamlessly, and increasing opportunities for deeper insights, says Conor O’Kelly, senior director of statutory accounting at Workiva. Also, “the prospect that [ESG] reporting is now becoming mandatory and subject to audit is forcing companies to evaluate their reporting systems,” O’Kelly says. 

Many of the companies that are fully automated when it comes to statutory reporting are tech-savvy or already in the cloud, he explains. More traditional brick and mortar sectors or highly regulated industries, like banks, weren’t as well prepared or possibly didn’t have access to immediate resources, O’Kelly says. “This will most likely change in the near future as statutory financial reporting, corporate governance frameworks, and ESG are becoming more interconnected, broadening the stakeholder group and requiring new reporting assessments,” he says.

Courtesy of Workiva

Nearly 50% of companies surveyed have statutory reporting partially automated. But the traditional “hub-and-spoke” model is counterproductive. “Each spoke may have partial automation, which can create some efficiencies, but data wrangling and localized corporate governance have likely been driving inconsistency,” according to the report.

For the most part, the statutory record-to-report process still remains locally performed and within the realm of the in-country controller, the research found. But if automation is applied holistically from a global vantage point, it can create a shared reporting narrative, Workiva and Deloitte noted. 

Within the first year, companies that achieved automation using statutory software experienced 30% to 40% efficiency gains and a “strong in-year return on investment,” according to the report. If end-to-end automation is key, then what is holding some companies back from complete implementation? “Every country believes its reporting process has special considerations that fall outside of possible automation implementation,” O’Kelly says. In addition, 43% of respondents have not changed their budget for regulatory reporting even while experiencing difficulty in submitting statutory reports, the research found.

Another upside to automation is attracting top talent, O’Kelly says. “Companies with technology shortfalls are left behind, as younger generations choose to do business with competitors that are digitally native,” he explains. Advice for organizations needing an upgrade? “When choosing automation technologies, invest in a solution that has flexibility, and that can be integrated across your entire reporting architecture,” he says.

See you tomorrow.

Sheryl Estrada

Big deal

Consumers' expectation that brands have a positive impact on society remains high, according to a new study by Razorfish, an interactive marketing and tech company, and VICE Media Group. The Truths, Myths and Nuances Behind Purpose found consumers care about both societal benefit and personal benefit. Gen Z consumers are two times more likely than millennials, and three times more likely than Gen X, to believe that brands are more likely to improve the world, the study found.

Going deeper

6 Strategies to Boost Retention Through the Great Resignation, a report published in Harvard Business Review on Nov. 15, aims to offer guidance to companies as employees are leaving jobs at record levels. Measures include elevating the companies purpose, giving employees incentives for staying and flexibility, to name a few. "Employers need to recognize that it takes significantly longer to recruit someone than it does for them to give their two-week notice and depart," the report states. "The solution, then, is to immediately bolster retention while ramping up recruiting."


Holly Grey was named CFO at Exabeam, a cybersecurity company that provides a cloud platform. Grey has more than 25 years of experience leading financial operations. She most recently served as SVP of finance at Forescout Technologies. While there, Grey also led the company through a successful initial public offering. Prior to Forescout, Grey was SVP of finance at Accuray Inc.. Before Accuray, she was VP of finance at Aspect Software.

Elizabeth (Betsy) Horton was named EVP and CFO at S&W Seed Company (Nasdaq: SANW), effective Nov. 15. Horton succeeds Matthew Szot, who resigned from his position, and will serve as an advisor to the company during the transition. Horton comes to S&W Seed Company from Miller Milling Company, where she served as CFO since 2018. In this position, she oversaw the company's finance transformation and was also responsible for IT and HR. Prior to Miller Milling, Horton spent 20 years at Cargill where she held numerous finance roles most recently, financial planning and analysis director.


"With all of the liquidity, and the fears of inflation raising its head, that can cause some chaos."

—IBM CEO Arvind Krishna on what keeps him up at night, as told to CNBC.

This is the web version of CFO Daily, a newsletter on the trends and individuals shaping corporate finance. Sign up to get it delivered free to your inbox. 

Read More

CEO DailyCFO DailyBroadsheetData SheetTerm Sheet