Tips for making stock market reporting easier and faster

The article written on the basis of an interview with PKF experts (Grażyna Sadowska-Malczewska - Managing Partner of PKF BPO and Tomasz Koszczan - Reporting Manager in PKF BPO), was published on August 30, 2022 on the website pb.pl.

The preparation of periodic financial reports, especially in stock exchange capital groups, takes a lot of time and requires the tedious work sometimes of the entire finance department. The experience of PKF BPO shows that the whole process can be carried out faster and more efficiently. How? Already thanks to more than usual use of the possibilities of the MS Office suite, especially MS Excel.

While providing its services to a capital group of more than 20 companies, operating in the renewable energy industry and listed on New Connect, PKF BPO discovered a good and effective method for improving the entire consolidation process of this group of capital-related companies significantly. However, this method does not come from the implementation of some technical or process innovation, nor is it the consequence of the application of extraordinary intelligence, being a manifestation of human genius or the use of artificial intelligence technology. The streamlining, acceleration of financial reporting processes, as well as increasing its quality, was achieved by using the possibilities hidden in such a popular and massively used tool as the MS Office suite, especially in the MS Excel application.

Importance of reporting

A specific feature of listed companies is the need to prepare cyclical quarterly consolidated financial statements. This is not only an obligation for them, but also a fundamental tool for communication with investors and a wide range of stakeholders. Admittedly, in terms of communication, the foundation for listed companies is the prospectus However, periodic and current reports, the publication of which results from legal disclosure obligations, are in fact an ongoing update of prospectuses, especially since after a company or capital group goes public, subsequent prospectuses are published relatively rarely, e.g. when issuing new shares.

Efficient financial reporting plays - it is worth emphasising - a key role in listed companies. By providing financial information on the business conducted by the company, it performs the basic functions required of an entity participating in the regulated capital market. It is obliged by law to make publicly available such essential parameters as the valuation of capital, the efficiency of its accumulation, a list of transfers and allocations made. Compliance with the information obligations imposed on listed companies is a sign of their transparency, i.e. providing all interested parties with equal access to up-to-date and reliable financial information. The reports are aimed at a wide range of recipients with different levels of 'initiation' and are therefore very comprehensive. The financial transparency of a public company is a key factor for the company, as it directly affects its valuation and the proper allocation of its resources.

Business agility builds competitive advantage Grażyna Sadowska – Malczewska CEO, Managing Partner at PKF Sadowska - Malczewska Sp.k.

Thanks to the acceleration of the reporting process, the management staff receives faster the necessary data to make business decisions, which in the post-pandemic and currently challenging market is a great business value. Nowadays, when it is more and more difficult to compete with quality alone, it is agility of operation that builds competitive advantage. The acceleration of the financial reporting process is its sign, as it helps to increase the trust of a wide range of stakeholders in the company's management.

Making the most of opportunities

One of the most important needs of capital group managers is the ongoing access to information about the entire business, including detailed, consolidated management data, often broken down into individual business segments. However, obtaining structured information from individual group companies faces many obstacles, often of an organizational nature. PKF BPO's experience, gained while providing services for a listed capital group connecting more than 20 companies, shows that they can already be dealt with using such a popular tool as the MS Office suite.

Taking advantage of the possibilities offered by programs such as MS Access, MS Word and MS Excel together with the Power Query add-in results not only in the automation of the reporting process, but also allows to maintain a high flexibility of this process. This means that the entire process can be adapted to the specific requirements of the reporting company or group of companies, as well as to the actual data availability. In addition, it enables the consolidation process to be extended with operational data and other supplementary data to meet the current needs in the field of management reporting, as well as provide more up-to-date communication with investors or analysts.

Reduced reporting times and improved report quality Tomasz Koszczan Reporting Manager at PKF BPO Sadowska - Malczewska Sp.k.

The implementation of automation using tools for the preparation of financial statements, unification of accounting principles and the chart of accounts allowed us to shorten the reporting time by as much as 40 per cent. As a result, we have gained more time to verify the data contained in the reports and for a more thorough substantive data analysis and preparation of descriptive data, which directly translates into increased trust among the company's counterparties, as well as building trust in the brand and its managers.

The use of the Power Query tool enabled PKF BPO to automate the process of creating financial statements in the aforementioned capital group listed on the stock exchange. Furthermore, it translated into a simultaneous acceleration of this process, which is confirmed by the obtained possibility of downloading data for the report directly from the statement of turnover and balances prepared as at the balance sheet date. The achieved automation also supports the principle of continuity, which is one of the guiding principles of accounting. In practice, standardization of reports is the possibility of comparing individual reports from companies belonging to the capital group, operating in the same business segment.

Uniform Chart of Accounts

The factor that had a huge impact on accelerating the consolidation process was the implementation of  a unified chart of accounts. Of course, this solution is much easier to implement in the case of capital groups operating in one country. However, the effort made to apply it to international corporate groups pays off twice. How? In the form of shortening the process of reporting consolidated results by skipping the stage of preparing individual data for individual companies of the capital group and preparing a data package containing aggregated data at once.

The experience of PKF BPO shows that standardization of reporting also supports cooperation with statutory auditors. For what reason? It facilitates the analysis and interpretation of adjustments made to the aggregated financial statements of the companies of the capital group and faster receipt of the report of the consolidated group.

Reporting of consolidated data, as well as individual data, ends with the generation of an electronic report. Non-public companies, which prepare reports in accordance with IFRS, have the least trouble in this respect. Others, reporting in accordance with the Accounting Act, or companies whose securities are publicly traded, have an additional obligation. It is the preparation of financial statements using an appropriate taxonomy (electronic standard).

Using the possibilities embedded in MS Office and using a uniform chart of accounts significantly shorten the reporting time. Automation also reduces the risk of error and gives the management board time to verify and accept the data - according to the experience of PKF BPO Sadowska - Malczewska Sp.k.