Challenges in Financial Reporting for ERP Customers
This is a prevalent complaint among ERP customers seeking a solution. They encounter difficulties with consolidations, eliminations, revaluations, and other statutory adjustments necessary to adhere to local-GAAP, IFRS, and other global financial reporting standards. If they manage multiple companies with distinct ERP systems and charts of accounts, the challenge becomes even more complex. Introduce multiple currencies into the equation, and financial reporting becomes exceedingly complicated.
Reasons General BI Tools Fall Short for Financial Reporting
Several reasons exist as to why general-purpose BI tools are not the ideal choice for swiftly and efficiently producing accurate, adaptable financial statements. Here are the top four:
#1: Financial Reports are Fundamentally Different
General-purpose report writing tools, like BI products, struggle to manage irregularities in financial reports, such as irregular account sequencing. A robust financial report writer allows users to define custom row definitions that align precisely with their specific requirements, providing flexibility and ease in the process.
#2: Multi-ERP Reporting Requires a Lot of Heavy Lifting
ERP vendors typically lack tools for reporting across different systems. In a scenario where a company uses multiple ERPs like SAP S4/HANA, SAP Business One, Plex, and a locally developed ERP, data normalization is necessary due to varying charts of accounts and accounting periods. To create unified financial reports, a robust financial consolidation tool is essential, automating the harmonization of data by mapping accounts to a standard and accommodating different calendars without additional user input.
#3: Multiple Reporting Standards Require Manual Effort
Global companies often face challenges when needing to produce varied financial reports for subsidiaries adhering to different reporting standards. Existing ERP systems usually lack the capability to distinguish between accounts and transactions under multiple standards. BI tools also fall short without expanding the data model and creating custom interfaces, turning financial reporting into a significant software project. A robust financial report writer, however, enables flexible chart of accounts mapping for diverse regulatory layouts or standards.
#4: Proper Currency Revaluation Can be Tricky
Currency revaluation can pose particularly challenging issues that many companies prefer to postpone until absolutely necessary. Although the existing ERP systems might manage multicurrency locally, aligning subsequent revaluations with previously exported data to a data warehouse can be tricky.
To learn more, read our free White Paper or contact us to schedule a free consultation and demo.