Robert Kugel's Analyst Perspectives

Workiva’s Wdesk Supports Expanded ASC 606 Disclosures

Posted by Robert Kugel on Sep 6, 2017 1:23:24 AM

Workiva’s Wdesk, a cloud-based productivity application for handling composite documents, will have a larger role to play as companies adopt new revenue recognition standards governing accounting for contracts. The Financial Accounting Standards Board (FASB), which administers Generally Accepted Accounting Principles in the U.S. (US-GAAP), has issued ASC 606 and the International Accounting Standards Board (IASB), which administers International Financial Reporting Standards (IFRS) used in most other countries, has issued IFRS 15. The two are very similar, and both will enforce fundamental changes in accounting for contracts.

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Topics: Composite document, Document Management, CFO, SEC, 10K, XBRL, close, closing

IBM’s 2013 Vision Bodes Well for Finance

Posted by Robert Kugel on Jun 3, 2013 9:55:17 AM

I recently attended Vision 2013, IBM’s annual conference for users of its financial governance, risk management and sales performance management software. These three groups have little in common operationally, but they share software infrastructure needs and basic supporting software components such as reporting and analytics. Moreover, while some other major vendors’ user group meetings concentrate on IT departments, Vision focuses on business users and their needs, which is a welcome difference. For me, there were three noteworthy features related to the finance portion of the program. First, IBM continues to advance its financial performance management (FPM) suite and emphasizes its Cognos TM1 platform to support a range of finance department tasks. Second, the user-led sessions illustrated improvements that finance departments can make to their core processes today, ones that improve the quality of these processes and go a long way toward enabling Finance to play a more strategic role in the company it serves. Third, the Cognos Disclosure Management product has better performance and useful new features to support the management of a full range of internal and external disclosure documents, including the extended close, which I have discussed.

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Topics: Analytics, Budgeting, Business Performance Management (BPM), CFO, closing, Data Management, Financial Performance Management, Financial Performance Management (FPM), FPM, IBM, Planning, Reporting, SEC, TM1, XBRL, digital technology

Infor Demonstrates Steady Stream of Advances to Customers

Posted by Robert Kugel on Apr 26, 2013 10:58:55 AM

At this year’s Inforum user group conference, Infor representatives showed the progress the organization has made since last year in transforming itself from a ragbag of mostly small, often obsolete software companies to a competitive vendor of a modern enterprise management software suite. Infor was created by private equity investors employing a “rollup” strategy, aimed at combining smaller companies within an industry to form a single larger company that could achieve economies of scale and greater market presence. Others have tried this in the software industry in the past and encountered difficulty in making it work for two primary reasons. One is the technical challenge of achieving economies of scale in enterprise applications by turning a set of similar but separately developed software pieces into a single offering. Computer Associates achieved economies of scale through acquisition in the 1990s in the IT infrastructure software segment. But it did this largely by forcing customers of the various acquired companies to migrate to its single offering in the specific category. This is not a practical approach for business and finance enterprise applications because customers are willing to go off maintenance and eventually look for another vendor. The second difficulty is that newer or larger competitors can focus on innovation and overtake the rollup company while its attention and resources are focused on stitching the pieces together.

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Topics: Analytics, Big Data, Budgeting, Business Analytics, Business Collaboration, Business Performance Management (BPM), CFO, closing, Cloud Computing, Collaboration, Customer Performance Management (CPM), Financial Performance Management (FPM), FPM, GRC, Infor, Information Management (IM), IT Performance Management (ITPM), Mobile, Operational Performance Management (OPM), Planning, Risk, Sales Performance Management (SPM), SEC, Social Media, Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), Office of Finance

International Integrated Reporting Framework Takes Shape

Posted by Robert Kugel on Apr 23, 2013 10:45:13 AM

The International Integrated Reporting Council (IIRC) recently published a draft framework outlining how it believes businesses ought to communicate with their stakeholders. In this context the purpose of an “integrated report” is to promote corporate transparency by clearly and concisely presenting how an organization’s strategy, governance, and financial and operational performance will create value for shareholders and other stakeholders in both the short and the long term. Such a report aims to address broader needs than only those of investors’ and therefore must be more than a simple extension of a company’s external financial reports, which are aimed at a specialist audience including analysts, regulators and lawyers.

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Topics: Business Analytics, closing, FPM, Information Applications (IA), Information Management (IM), SASB, SEC, Sustainability, XBRL, Office of Finance, Business Intelligence, financial reporting

Public XBRL Vendors Should Go the Extra Mile

Posted by Robert Kugel on Mar 27, 2013 8:02:00 AM

This is annual report season, the time of year that a majority of European and North American corporations issue glossy paper documents aimed at investors, customers, suppliers, existing and prospective employees as well as the public at large. (Some countries have different conventions; in Japan, for instance, most companies are on a March fiscal year.) In reviewing some of the annual reports that are available on the Web, I was struck by the absence of advanced reporting technology used on investor web pages and in online annual reports of vendors of advanced reporting technology. (One notable exception is Microsoft, which uses Silverlight on its investor web pages.) Adobe Acrobat (introduced 20 years ago) is the presentation method of choice for the annual report. It would be great if publicly traded vendors that sell tools that automate the process of assembling investor documents (such as Exact SoftwareIBMInforSAP and Trintech) would demonstrate their value beyond simple compliance. These companies’ tools support and automate the processes that are part of what some call “the last mile of finance,” referring to their use in the final steps of a stream of activities that starts with closing the books and performing statutory financial consolidations and ends with publishing and filing financial documents to satisfy regulatory or contractual obligations. (I prefer to use the term “close-to-disclose cycle” because it’s a more accurate description.) These vendors should go the extra mile and redesign their investor sites to show how XBRL-tagged financial documents can be used to communicate more effectively with shareholders.

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Topics: Analytics, Business Performance Management (BPM), CFO, compliance, extended close, Financial Performance Management (FPM), financial reporting, Governance, Risk & Compliance (GRC), SEC, US-GAAP, XBRL, Office of Finance, digital technology

Software to Fend Off Earnings Restatements

Posted by Robert Kugel on Mar 15, 2013 9:51:03 AM

I’m wondering whether the rapid rise in earnings restatements by “accelerated filers” (companies that file their financial statements with the U.S. Securities and Exchange Commission that have a public float greater than $75 million) over the past three years is a significant trend or an interesting blip. According to a research firm, Audit Analytics, that number has grown from 153 restatements in 2009 to 245 in 2012, a 60 percent increase. What makes it a blip is that the total is still less than half the number that occurred in 2006 as the Sarbanes-Oxley Act began to take effect. As well, the number of companies restating is still less than one percent of the total. Yet it’s a blip worth paying attention to, since the consequences of a restatement pose a serious professional challenge to finance executives. The right software can help address some of the underlying causes that lead to the need to restate earnings.

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Topics: audit, Business Performance Management (BPM), CFO, close, compliance, Consolidation, Controller, Financial Performance Management (FPM), FPM, Governance, Governance, Risk & Compliance (GRC), GRC, Reporting, SEC, Tax, XBRL, Office of Finance, Customer Experience

Make XBRL Data from EDGAR More Accessible

Posted by Robert Kugel on Mar 7, 2013 7:46:46 AM

I was discussing the United States Securities and Exchange Commission’s (SEC) eXtensible Business Reporting Language (XBRL) mandate with a former head of investor relations at a Fortune 100 company. His take on it is much the same as that of everyone else involved with corporate reporting: it doesn’t produce much value and costs a bundle to comply. I related to him my thoughts on the lack of progress I saw in making the XBRL mandate more useful to corporations and investors alike. Making XBRL data readily available to the public – not just for SEC enforcement purposes – is consistent with the SEC’s three-fold mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. In addition to giving XBRL-tagged data greater practical value to investors, the trove of company data assembled by the SEC could be used by a wide range of people working within corporations.

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Topics: Analytics, Business Performance Management (BPM), CFO, compliance, extended close, Financial Performance Management (FPM), financial reporting, FPM, Reporting, SEC, US-GAAP, XBRL, Office of Finance, digital technology

Happy Birthday XBRL

Posted by Robert Kugel on Feb 8, 2013 8:44:59 AM

To mark the fourth anniversary of the Securities and Exchange Commission’s (SEC) interactive data mandate, Columbia Business School (my alma mater) and its Center for Excellence in Accounting and Security Analysis (CEASA) published a review of the current state of eXtensible Business Reporting Language (XBRL) that notes the manifold issues that plague this promising technology. From its perspective, three key issues hamper greater use of XBRL. The first is the high error rate in the tagging process and the tendency of companies to use too many non-standard tags, both of which substantially reduce the usefulness of the data to practitioners. Second, they believe technologists, not regulators and accountants, should be more involved in developing software that makes it easier to consume XBRL-tagged data. Third, companies should spend more effort improving the quality of their data than on trying to kill the mandate.

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Topics: Analytics, Business Performance Management (BPM), CFO, compliance, extended close, Financial Performance Management (FPM), financial reporting, Governance, Risk & Compliance (GRC), SEC, US-GAAP, XBRL, Office of Finance, digital technology

Hewlett Packard Charges Fraud at Autonomy– Lessons Learned?

Posted by Robert Kugel on Nov 23, 2012 11:13:52 AM

Many people enjoy mystery stories or crime thrillers; in the same vein of savoring the whodunnit and howdunnit, I like a good accounting scandal. My fascination with cooking the books started when I was young with the “great salad oil swindle”, which wound up causing losses in excess of $1 billion in today’s money and even threatened a Wall Street collapse. This disaster was averted by the assassination of President Kennedy, which kept markets closed on Monday, November 25, 1963, and gave the parties involved an extra day to resolve the matter. Nowadays I look forward to receiving FIRST, a compendium prepared by IBM’s Risk Analytics group of the previous month’s financial shenanigans. So, the recent Hewlett-Packard-Autonomy imbroglio fascinates me.

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Topics: audit, Business Performance Management (BPM), Financial Performance Management (FPM), Fraud, Governance, Governance, Risk & Compliance (GRC), GRC, Hewlett Packard, IFRS, Meg Whitman, SEC, Office of Finance

Put a Smile in Your Last Mile of Finance

Posted by Robert Kugel on Aug 15, 2012 12:08:06 PM

People used to use the phrase “the last mile” solely to refer to a condemned prisoner’s path to execution. Then the telecommunications industry picked it up to describe that part of a circuit between a major trunk line and a subscriber. Later still a defunct software company, Movaris (now part of Trintech), used the phrase in an analogy to refer to the set of activities that take place between when a company closes its books and the point where it finishes its external reporting activities, such as disclosing periodic earnings and financial conditions to investors or filing financial statements with regulators or lenders. It was an attempt to focus attention on the need to automate and better coordinate the multiple, disparate but interconnected threads that have to be orchestrated to complete the external reporting tasks accurately and on time. Personally, I’ve never cared for the phrase being used in this context; there are really multiple “last miles,” with multiple and sometimes overlapping destinations. I prefer “the close–to-report cycle” because it’s more precise in its description, and because rather than pointing to finality, “cycle” defines it for what it is – a repetitive periodic activity. And because it is periodic and repetitive, it benefits from process optimization and automation, which can substantially reduce the effort required to complete a cycle and alleviate the stress certain departments often feel as deadlines loom.

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Topics: audit, Business Performance Management (BPM), CFO, close, compliance, Consolidation, Controller, Financial Performance Management (FPM), FPM, Governance, Governance, Risk & Compliance (GRC), GRC, Reporting, SEC, XBRL, Office of Finance, Customer Experience