Robert Kugel's Analyst Perspectives

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.

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

Tagetik provides financial performance management software. One particularly useful aspect of its suite is the Collaborative Disclosure Management (CDM). CDM addresses an important need in finance departments, which routinely generate highly formatted documents that combine words and numbers. Often these documents are assembled by contributors outside of the finance department; human resources, facilities, legal and corporate groups are the most common. The data used in these reports almost always come from multiple sources – not just enterprise systems such as ERP and financial consolidation software but also individual spreadsheets and databases that collect and store nonfinancial data (such as information about leased facilities, executive compensation, fixed assets, acquisitions and corporate actions). Until recently, these reports were almost always cobbled together manually – a painstaking process made even more time-consuming by the need to double-check the documents for accuracy and consistency. The adoption of a more automated approach was driven by the requirement imposed several years ago by United States Securities and Exchange Commission (SEC) that companies tag their required periodic disclosure filings using eXtensible Business Reporting Language (XBRL), which I have written about. This mandate created a tipping point in the workload, making the manual approach infeasible for a large number of companies and motivating them to adopt tools to automate the process. Although disclosure filings were the initial impetus to acquire collaborative disclosure management software, companies have found it useful for generating a range of formatted periodic reports that combine text and data, including board books (internal documents for senior executives and members of the board of directors), highly formatted periodic internal reports and filings with nonfinancial regulators or lien holders.

Topics: Big Data, Mobile, ERP, Human Capital Management, Modeling, Office of Finance, Reporting, Budgeting, close, closing, Consolidation, Controller, Finance Financial Applications Financial Close, IFRS, XBRL, Analytics, Business Analytics, Business Intelligence, Governance, Risk & Compliance (GRC), Business Performance Management (BPM), CFO, compliance, Data, Financial Performance Management (FPM), benchmark, Financial Performance Management, financial reporting, FPM, GAAP, Integrated Business Planning, Profitability, SEC Software

Reconciling accounts at the end of a period is one of those mundane finance department tasks that are ripe for automation. Reconciliation is the process of comparing account data (at the balance or item level) that exists either in two accounting systems or in an accounting system and somewhere else (such as in a spreadsheet or on paper). The purpose of the reconciling process is to identify things that don’t match (as they must in double-entry bookkeeping systems) and then assess the nature and causes of the variances. This is followed by making adjustments or corrections to ensure that the information in a company’s books is accurate. Most of the time, reconciliation is a matter of good housekeeping. The process identifies errors and omissions in the accounting process, including invalid journal postings and duplicate accounting entries, so they can be corrected. Reconciliation also is an important line of defense against fraud, since inconsistencies may be a sign of such activity.

Topics: Office of Finance, automation, close, closing, Consolidation, Controller, effectiveness, Reconciliation, XBRL, Governance, Risk & Compliance (GRC), Business Performance Management (BPM), CFO, Data, Document Management, Financial Performance Management (FPM), Financial Performance Management, FPM

Oracle continues to enrich the capabilities of its Hyperion suite of applications that support the finance function, but I wonder if that will be enough to sustain its market share and new generation of expectations. At the recent Oracle OpenWorld these new features were on display, and spokespeople described how the company will be transitioning its software to cloud deployment. Our 2013 Financial Performance Management Value (FPM) Index rates Oracle Hyperion a Warm vendor in my analysis, ranking eighth out of nine vendors. Our Value Index is informed by more than a decade of analysis of technology suppliers and their products and how well they satisfy specific business and IT needs. We perform a detailed evaluation of product functionality and suitability-to-task as well as the effectiveness of vendor support for the buying process and customer assurance. Our assessment reflects two disparate sets of factors. On one hand, the Hyperion FPM suite offers a broad set of software that automates, streamlines and supports a range of finance department functions. It includes sophisticated analytical applications. Used to full effect, Hyperion can eliminate many manual steps and speed execution of routine work. It also can enhance accuracy, ensure tasks are completed on a timely basis, foster coordination between Finance and the rest of the organization and generate insights into corporate performance. For this, the software gets high marks.

Topics: Big Data, Mobile, Planning, Social Media, ERP, Human Capital Management, Modeling, Office of Finance, Reporting, Budgeting, close, closing, Consolidation, Controller, driver-based, Finance Financial Applications Financial Close, Hyperion, IFRS, Tax, XBRL, Analytics, Business Analytics, Business Intelligence, CIO, Cloud Computing, In-memory, Oracle, Business Performance Management (BPM), CFO, compliance, Data, Financial Performance Management (FPM), benchmark, Financial Performance Management, financial reporting, FPM, GAAP, Integrated Business Planning, Price Optimization, Profitability, SEC Software

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.

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

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

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

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.

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

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

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