The fantastic and all-time-consuming report is coming up – for most companies, anyway. And we are, of course, talking about the annual report. As we are in the middle of December, there are some things you and your finance team can do now – ensuring January will be mainly focused on the numbers and controlling these. Because, let’s be honest, that is a massive task no matter what.
10 tips you can implement already in December
We have collected the top 10 pieces of advice to go through before your numbers are ready, and we are not talking about the project plan – even though we do hope you have that one ready. But no, we are talking about the small things that will ease the visit from YOUR auditors and ensure YOU do not experience any more significant mistakes that need to be corrected while you look at your numbers.
#1: Download the IFRS checklist
The IFRS checklist is probably the best resource for preparing the annual report. The auditors will also use this as an audit resource, so if you can already go through it – you will already be halfway there. The checklist outlines your annual report’s methods, measurements, and presentation requirements. If your company uses other accounting standards, your auditor will still have those available.
Download the checklist here or contact your auditor (they will always have the most updated version).
#2: Remember to check accounting policies
If you have your accounting standard, like the IFRS checklist, you can now start placing it on the relevant pages in the annual report. Even though you might not have all the financial statements ready, you will know where they will go. Sometimes things like accounting policies are easy to overlook in the annual report. And the auditors will definitely look at those – so simply go through them every time you correct numbers on a page.
#3: Update your auditor on your processes
If you have changed your reporting method and implemented a new reporting or accounting system – share this information with your auditors. It will prepare them for how you deliver your numbers, how you collect data, and how to do the audit trail. As a result, your finance team will save time.
#4: Align processes and calculations for non-controlling interest, exchange rates, and intercompany eliminations.
Already in the preparation of the group reporting, you can outline certain numbers, which you know will be complex, like:
- Non-controlling interest
- Exchange rates
- Intercompany eliminations
If you calculate in a spreadsheet, ensure that you have no broken formulas and that you streamline calculation methods; for example, how do you calculate exchange rates? Many of these will already be automated and correct if you have the appropriate software. But it is a good idea to double-check if the system can handle goodwill, for example, and fix that now.
#5: PREPARE, PREPARE, and PREPARE
We have said this before, and we will continue to do so. Prepare what you can. The daily tasks such as month-end reporting, quarterly reporting, price increase, and so on – also happen in January. So if you do not have a project plan or timeline – make one today.
We have created a simple excel project plan, including a timeline – that you can easily adapt to your needs and content for the annual report.
#6: Make a timeline for what has happened during the year.
Management review is a large part of the annual report. But sometimes the most simple advice can help you write it. Ask yourself: can you remember everything that happened during the year? If yes, write it down. If not, talk with some from different departments, go through announcements, press releases, and even social media – and then write it down.
The result: you will find that most of the management review will write itself.
#7: Be updated on people's time away from the office
For many finance teams, the annual report follows the year – and we have Christmas at the end of the year. In your planning, keep track of who is on holiday and when – and, more importantly, who will be your contact person if a key stakeholder is away from the office. There is nothing worse than the feeling of delaying an entire process or audit due to one person being away.
#8: Align your subsidiaries
Your subsidiaries are an important part of the annual report, but the group controller or finance manager will often control their numbers. As they also have everything else to control in the annual report – align with them now on deadlines. A great piece of advice is to divide your team into country-specific controllers. Meaning if you have subsidiaries in the US, Indonesia, and France, try assigning one group controller to each. Then you can cut down your time on controlling to a maximum of one week at the beginning of January. This is, of course, only possible if you have a larger team. However, you can save a massive amount of time if you align the delivery date with every subsidiary already in December, not January, when the new year race has begun.
#9: Proofread & ensure consistent use of phrases
Get someone who is not necessarily from your team or even from finance to proofread the entire annual report. And start already now. It would help if you had some pages ready. Do not wait until the last minute – the time it takes to review and proofread is often overlooked.
If you talk about restructuring, keep that phrase going. Do not suddenly talk about adjustment – stakeholders might not read every page, so it should always be clear to them what you are talking about. Create a short annual report dictionary where you write strategic goals, initiatives, etc.; in that way, everyone writing can always see what has been used on other pages. Easy, peasy.
#10: Do you report in ixbrl?
You should already know when and how to report your financial statement. As soon as you have approved your financial report, ensure the one who uploads knows how to report in iXBRL. Take an hour out of a day in December and go through this with your team.