Costs of statutory reporting mistakes

In the high-stakes business world, accurate statutory reports are crucial to avoid financial and reputational consequences. Even though statutory reporting is a critical part of any organization’s improvement efforts, it is often overlooked. Even minor mistakes can be costly as regulatory scrutiny increases. This leads to a lack of decision-making, and requires more time-consuming interventions. Advanced technology plays a pivotal role by offering tools that safeguard against the pitfalls of manual errors and outdated systems.

In this blog, we will delve into the hidden costs and risks associated with poor statutory reporting, explore the significant benefits of integrating environmental, social, and governance (ESG) factors into reporting processes, and harness the power of utilizing advanced technological solutions to protect and grow your business.

Highlights:

Accurate statutory reporting is crucial to prevent financial and reputational risks.

ESG factors are key in corporate governance, evaluating a company’s long-term sustainability and ethical impact.

Hidden costs of getting statutory reporting wrong

Recently, there has been a growing trend of increased regulatory scrutiny and enforcement of statutory reporting requirements, resulting in steeper penalties for non-compliance. It is difficult for businesses to maintain accurate and compliant statutory reports when they rely on manual methods. Tax calculations, audits and penalties, as well as fines and penalties, can all result in revenue losses. More critically, they can damage a business’s reputation and erode customer trust.

Imagine that your company underreports its income due to errors in statutory reporting, caused by under-resourced, time-pressed teams dealing with too many manual entries. The consequences could include paying back taxes on any undeclared income, along with interest, penalties, and fines from the relevant regulatory authority.

But what if it was leaked that the company’s corporate governance was poorly managed? What would the customers’ reaction be? Would new customers trust your business? Investors would they become nervous? What about the employees who made the mistakes? What would poor performance do for team morale and recruitment?

How to navigate regulatory complexity effectively

Regulatory authorities are placing a stronger emphasis on transparency and accountability, demanding accurate and timely financial reporting. A single, secure data source that is designed to house tax data and integrate with reporting software will streamline audit requests, and allow access to historical data, without the risk of mismatches and overwriting. This will help eliminate errors. Standardized and efficient data import processes, such as transferring or sharing data with outsourced service providers through a hub infrastructure, along with multi-year tax attribute support and cloud-based hosting offering unlimited storage, can also enhance efficiencies and deliver cost savings.

A new approach to corporate governance

Constant changes in regulations, lack of manpower, and outdated systems can put extra pressure on corporate governance teams. Adopting technology solutions that are AI-enhanced and have advanced automation can play a part in transforming corporate governance and supporting businesses. Optimizing your business’s statutory reporting solutions can help automate repetitive tasks like data entry and reconciliation, freeing up resources for more strategic activities.

Technology that uses real-time data allows businesses to monitor their financial performance with greater accuracy. Cloud-based platforms also offer scalable, flexible solutions for statutory reports, reducing the need to make large upfront investments.
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Benefits of integrating ESG into statutory reporting processes

In addition, statutory reports may also include information on sustainability or ESG.

Statutory reports can include information about sustainability and ESG in addition to financial statements. ESG factors are an important component of corporate governance, and they are becoming more and more important when assessing a firm’s sustainability and ethical impact over the long term. Investors, regulators, and consumers are demanding greater transparency and accountability.

The integration of ESG reporting with statutory reporting processes presents both challenges and opportunities. A robust reporting framework is needed to meet the complex ESG metrics and statutory requirements. This is where advanced technology solutions come into play, enabling businesses to streamline their reporting processes and enhance data accuracy.

By adopting an integrated approach to statutory and ESG reporting, businesses can achieve several key benefits:

Enhanced transparency and accountability:

A unified reporting platform ensures that all financial and ESG data is accurate and up-to-date, providing stakeholders with a clear view of the company’s performance and impact.

Improved decision-making:

Access to real-time data and analytics enables businesses to make informed decisions, aligning financial performance with sustainability goals.

Regulatory compliance:

As regulatory scrutiny intensifies, having a centralized reporting system helps ensure compliance with both financial and ESG regulations, reducing the risk of penalties and reputational damage.

Resource optimization:

Automation of repetitive reporting tasks frees up resources, allowing teams to focus on strategic initiatives that drive business growth and sustainability.

Integrating ESG reporting into statutory processes is about more than meeting a compliance requirement. It’s more than a compliance requirement. By leveraging advanced technology tools, businesses can enhance their corporate governance framework, ensuring they meet the evolving demands of stakeholders and regulators alike.

• Leveraging technology for comprehensive reportingThomson Reuters, in collaboration with SAP, offers powerful tools that can significantly enhance both statutory and ESG reporting. Thomson Reuters ONESOURCE ™ is a comprehensive solution that manages statutory reporting. It eliminates errors and ensures data consistency and workflow efficiency. SAP’s sustainability solutions provide advanced analytics and tailored reporting capabilities tailored to ESG criterion. Together, these tools enable businesses to integrate ESG data into their statutory reporting framework seamlessly, ensuring compliance and enhancing transparency.
• Discover how these solutions can transform your statutory reporting processes and support your sustainability journey by contacting our team today.
• ONESOURCE Statutory ReportingGlobal disclosure management software for automating financial statement preparation
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