The Annual Reporting Process: Facts and Myths

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EFN Team
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The annual report.

For many companies, this phrase conjures memories of poorly formatted drafts, countless data syncs, tiresome triple-checking, repetitive revisions, back-and-forths with design agencies, and hours spent racing the clock.

If you’ve been there, you know the traditional production process is rife with inefficiencies—and due for improvement.

To shed light on traditional annual reporting frustrations—and innovative solutions—we studied the behavior of various clients on the Tangelo platform. Our data pointed to several interesting trends, answering intriguing questions like:

  • How many revisions are made to the average report?
  • Which sections of the report are revised most often?
  • How close to the publication date are these changes made?
  • How many times are the numbers in a report synced?

 

Two content streams. Many complications.

The average production process involves two content streams: the narrative sections and financial sections of the annual report. Each content stream comes with its own nuances—and complications. Let’s take a look.

 

The narrative sections: a step-by-step breakdown
  • Use standard office tools—including Word, Excel, printers, highlighters, and an abundance of red pens—to write copy, circulate multiple files among staff, divide responsibilities, compare drafts, compile text, and review changes.
  • Send everything to a third-party design agency for typesetting.
  • Wait a couple of days—and up to a week—to receive the first typeset version.
  • From this point forward, request all changes by email.
  • Once you get your changes back, check the entire report again. Chances are, the edits weren’t all done correctly (sigh). And by this time you already have your next set of changes ready to send (double sigh).

 

The financial sections: a step-by-step breakdown
  • Use financial systems like Oracle Hyperion, SAP, or IBM Cognos to consolidate data.
  • After a disclosure management (DM) system (for example, CCH Tagetik, Sturnis365, or Certent) constructs disclosures, create presentable financial statements and notes in Word (easier said than done).
  • Hand everything over to the annual report project manager, who sends all sections—financial and narrative—to a third-party design agency.
  • Receive a typeset version back from the design agency—and starts tediously triple-checking the report.
  • Send any and all change requests to the design agency.
  • Receive the changes in a couple of hours (or within the next day or two)…then start checking all over again.

 
At first glance alone, these processes are incredibly frustrating. But let’s dig a little deeper.

 

Riddled with inefficiencies. Ripe for improvement.

While the front sections of the annual report contain narrative content (e.g. the directors’ report), the back sections feature more numbers-driven material (e.g. financial statements and notes). Here, we’ll study both in turn.

 

Presenting the numbers

As mentioned earlier, many finance departments use a DM system to populate the back sections of the report: producing the tables in the financial statements/notes and the accompanying notes commentary.

After delivering their results to the annual report project manager, finance often considers their job done—but it’s not.

Myth: “We have a DM tool, so our job here is done!”
Reality: It’s only just begun. Our research shows that clients synced their data an average of 41 times. With Tangelo, the synchronization process is effortless. Without it, quite the opposite. Imagine requesting updates to your table and charts via email 41 times—then compulsively checking a PDF for mistakes. Yikes.

 

Telling a story

Collaboration is key across the entire production process—but especially in regards to the narrative sections of the annual report. Here, the text is massaged, tweaked, and discussed, infographics are continually updated, board photos are retouched, and elements are regularly moved around last-minute.

According to our survey, companies made an average of 275 revisions to their annual report in the last two weeks before publication.

The top five most revised sections of the annual report are:

1. Strategy (up to 112 revisions)
2. ESG (up to 72 revisions)
3. Risk (up to 56 revisions)
4. Remuneration (up to 43 revisions)
5. Chair/CEO (up to 21 revisions)

These statistics show that companies have a great need for collaboration, tracking changes, and making immediate edits while working on narrative parts of the annual report. On top of that, they crave the ability to effectively and accurately update tables, charts, and numbers—without tediously double-checking every change.

 

The Tangelo difference

Companies wanted a smarter way of working—so we developed it.
Our software solution allows users to finally seize control of corporate reporting and produce PDF, web, and European Single Electronic Format (ESEF) versions of annual reports from a single source.

Ready to reimagine your corporate reporting process? Contact Tangelo Software today.

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