3 CFO Strategies for Better Annual Reporting Performance: Metric of the Month

Late December and early January are one of the heaviest workload periods in the year for many organizations, as month-end, quarter-end, and year-end closing processes all come to a head. The reporting work doesn’t stop with the completion of the annual close, however — organizations still need to report their earnings to key stakeholders like investors and government agencies.

Organizations that release their earnings in a timely way send an important message of poise and competence to their stakeholders. Laggards, on the other hand, may run afoul of compliance deadlines or lead stakeholders to wonder whether there is an issue the organization is trying to hide. After looking at cross-industry cycle times for the release of an earnings report, we’ll review at least three areas where you can productively look for improvements in this area.

This month’s measure calculates the number of calendar days (including weekends) that elapse between the completion of your annual consolidated financial statements and the release of your earnings. Based on survey responses from more than 1,700 organizations, APQC finds that organizations at the median take 24 calendar days to release their earnings once financial statements are complete. The fastest organizations (those at the 25th percentile) release their earnings in 19 days or less, while the slowest (at the 75th percentile) take 28 days or more.

Recommendations for Cycle Time Improvements

If you’d like to improve your performance on this measure, it’s important to look more closely at your process inputs, the process itself, and your management of the process as CFO.

1. Work for Quality Data and Consistent Formats

At APQC, the first 14 days after the completion of our annual financial statements typically find me:

  • Preparing financial report templates that will be used in earnings releases
  • Gathering operational measures and KPIs to supplement our earnings release and financial reports
  • Developing and writing content for the management discussion and analysis (MD&A) section within our annual report  

Data quality sits at the foundation of all three of these activities. First and foremost, I need to be able to trust that the finance data my team sends me is reliable. Having to double- or triple-check that work would add unnecessary time to the process. Even if the numbers are solid, they may become garbled if my team is using a template that is out of date or documents without version control.

Working for reliable data and consistent formatting will help you avoid delays like these. For example, you can save time by creating a standard set of templates that can be used in multiple periods going forward so you do not have to recreate the wheel each year when it comes time to put your annual report together.

2. Break Down Your Process

Stakeholders from across the organization furnish important inputs and information for our annual report. With multiple hands shaping our reporting (and yours), it’s important to design a standardized process that lays out the steps that each group is expected to take, the order in which those steps should be carried out, and when the work should be completed. Orchestrating the work with a well-designed process is especially important in large, globally distributed organizations where inputs may be coming from different business units and regions.

If your cycle time is longer than you’d like it to be, break the process down into smaller segments and look for improvement opportunities within each.

For example, is it taking longer than it should to get finance data from a particular business unit? Does your audit team need to move more quickly in their final review? Decomposing the process in this way will help you pinpoint specific bottlenecks and identify where process improvements will make the most impact.

3. Act as Champion for Improvements

The creation of your earnings report includes a lot of moving parts and many stakeholders, but the buck ultimately stops with you as the CFO of your organization. With your cross-functional view of the enterprise, you are uniquely positioned to identify any pain points, challenges, and training needs related to the creation of your earnings report. Use these insights — and your influence as a leader — to provide training, spur your team to better performance, and remain mindful of opportunities to continuously improve your cycle time. Be sure to celebrate and praise your team along the way, including once the work is complete. Leading and championing the process in these ways keeps people engaged and helps to make your expectations clear.

Reporting your financial results in a timely manner is critical for maintaining regulatory compliance, attracting investment, assuring stakeholders of your profitability, and more. Completing the work efficiently and accurately requires a well-designed process underpinned by good data quality and consistent standards. Just as importantly, it requires your leadership as CFO to champion the process and to drive your team toward better performance.

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