Regulatory Reporting

The SaaS industry is on a torrid growth pace and isn’t showing any signs of slowing down. For finance teams in this fast-moving industry, this means there is an ever-increasing number of challenges to overcome—everything from revenue performance management, sales forecasting, planning and customer churn. So how can your finance team stay agile to help your SaaS business plan for today and tomorrow and stay one step ahead of the competition?   We’ve identified three key finance-led processes you can streamline so you can spend your time focused on helping your business grow: Improve revenue planning and reporting by gaining insights from key metrics   Automate data integration to create a single source of truth and improve organizational alignment   Accelerate your ASC 606 revenue recognition compliance activities Read on to learn best practices you can implement to streamline these processes and how other SaaS companies are succeeding by automating these time-consuming activities. 1. Improve Revenue Planning & Reporting With Insights From Key Metrics They say the devil is in the details and with more competitors arriving on the SaaS scene every year, modern finance teams need to be able to drill deep into key success metrics to uncover hidden insights and plan for the future. And in the SaaS industry, there is no shortage of metrics for you to track, such as: Annual recurring revenue (ARR) growth   Customer lifetime value (LTV) and customer acquisition cost (CAC)   Net monthly recurring revenue (MRR) growth   Customer churn, rententions, renewal and expansion rates For SaaS revenue forecasting, it’s important for you to have financial and operational reporting tools in place that give you the ability to get a more granular view of your data, including visual dashboards that show key metrics and trends. Doing so will allow you to uncover opportunities to better manage your revenue performance. With SaaS revenue forecasting, the ability to break down sales pipeline by geographic location, size of company and other cohorts can open the door for deeper analysis and valuable insights to include in reports for upper management. And knowing exactly which marketing campaigns are generating the most revenue can help you decide where to allocate funds in the future. For Bruce Harris and the finance team at Asure Software, the ability to drill down into any data dimension with just a few clicks in Vena and to slice and dice this data using intersections has been a game changer. It’s saved Harris and his team a ton of time and given them the data granularity they need to extract valuable insights and to create reports that allow the rest of the company to better understand what’s working, what’s not and what the vision for growth looks like moving forward. 2. Automate Data Integration to Create a Single Source of Truth & Improve Organizational Alignment Having a granular view of your data is only valuable if you have that data in the first place. But as Vena’s recent 2020 Industry Benchmark Report revealed, data silos are still a challenge for 57% of finance teams in 2020. Evidently, there is still room for improvement for SaaS organizations—and businesses across industries—when it comes to creating a single source of truth for all financial and nonfinancial data. From disparate and disconnected data sources to time-consuming manual data entry tasks, it’s easy to understand why data integration is still a challenge for many. Integrating data from your finance, sales, marketing and customer care teams helps break down departmental silos. It also helps you create a holistic view of what is driving—or hindering—revenue growth. SaaS companies need to align departments and help them understand how they can best contribute to company growth. Integration with your CRM, ERP, GL and other key departmental systems is necessary to see the big picture and to make data-driven decisions. Do we need to adjust our pricing strategy? What about our sales forecasting? What types of marketing campaigns should we double down on? How can we increase our customer lifetime value (CLV)? With the right data from the right department at the right time, you can answer these questions and make decisions based on insight, not instinct. To create a single source of truth and to get a holistic view of operational data, the finance team at Nutanix, an enterprise cloud computer company specializing in hyper-converged infrastructure software, leverages Vena’s native integrations with source systems and cloud applications. Nutanix seamlessly connects Vena to all of their existing data sources, including Netsuite (for transactional ERP data) and Salesforce (for sales and customer info) to automatically transfer data—be it plan numbers, actuals, user comments and other metadata—ensuring that everyone sees the right data at the right time. “That single source of truth has really proved to be essential for our business,” says Rob Pastega, Senior Manager of Demand and Supply Planning at Nutanix. 3. Streamline Your ASC 606 Compliance Activities The ASC 606 revenue recognition standards came into effect in 2018 for public companies and in 2019 for private firms. In short, the goal of ASC 606 is to standardize the accounting process for recognizing revenue, which had previously been a little murky because of the subscription-based and service-oriented nature of SaaS applications. For any company that enters into contracts with customers to transfer goods or services, complying with ASC 606 is mandatory. Failure to adhere to these standards can result in stiff financial penalties, putting a damper on your plan to grow. But ASC 606 compliance can present a number of challenges for finance teams. Integrating a larger set of data that includes a detailed amortization schedule to account for expenses such as commissions and support can be time consuming and error-prone if done manually. Likewise, your compliance and period close processes can be slowed down if you're not using a tool that allows you to automatically consolidate customer transactions. Both of these challenges hurt your ability to comply on time and have confidence in your numbers. So how can you accelerate ASC 606 compliance activities to ensure that revenue recognition requirements are being met? Here are a few best practices to consider: Automate data integration. As mentioned above, complying with ASC 606 standards requires aggregating large amounts of data from across the organization, often from disparate data sources including your CRM, GL and ERP. To speed things up and to avoid data integrity issues, be sure to use finance-led planning software that integrates with all of your on-premise systems and cloud applications.    Streamline consolidation and reporting activities. With all of this extra data in your hands, the consolidation and reporting process can be time consuming if done manually. Rebates, sales compensation and accruals are just a few revenue-related costs that would have to be considered. So a tool that allows you to automatically consolidate all of this data and standardize your regulatory compliance and reporting process is a must for finance teams looking to dramatically speed up the ASC 606 compliance process.   Champion teamwork. At the end of the day, effective communication and alignment across your organization are just as important as having a complete and easy-to-use planning solution. Although your finance and accounting teams will be taking the lead, collaboration across your sales, customer success, professional services and legal teams are key to ASC 606 compliance. By uncovering hidden insights in your reports in a compelling way, creating a single source of truth for your data and streamlining your ASC 606 compliance activities, you’ll be able to grow your SaaS business with confidence and agility. Check out our free, CPE-accredited talk, “Transforming Regulatory Reporting Through Teamwork” on plantogrow.com to learn more about how you can streamline regulatory reporting. Request a demo today and find out how Vena’s complete planning solution can help you chart your path to growth.

Finance teams at banks and credit unions face a number of unique challenges. You need to stay ahead of shifting market conditions, mitigate risk and help your organization deliver a strong ROI for customers—all while dealing with a laundry list of regulatory compliance requirements. Finding ways to be agile so you can better serve the business is critical, but that's easier said than done with so much on your plate already. As you consider how your team can streamline planning processes to be more flexible, you might ask yourself: How can we adequately prepare for events such as interest rate shocks and market downturns? How can we measure key business metrics—assets under management (AUM) and return on assets ratio (ROA), for example—in real time? What’s the best way to disclose our earnings information and build trust with management, investors, regulators and the public? While there’s no simple answer to any of these questions, one thing is certain: Agile planning in the banking industry requires a seamless connection between people, processes and technology—especially in the face of ever-present change. In this blog post, we’ll look at three simple steps your finance team can take to streamline key planning processes so you're faster and more efficient: 1 Integrate your templates for net interest margin planning 2 Build workflows to streamline regulatory reporting 3 Empower leadership with dashboards for data storytelling We’ll also explore some examples of financial institutions like yours who have found success with these hacks and built stronger businesses as a result.  Pre-Configured Solution Vena for Banks and Credit Unions Find out why the world's best banks are partnering with Vena to level-up their business planning. Use Integrated Templates for Net Interest Margin Planning Monitoring interest income is a crucial aspect of the strategic planning process. As the primary source of revenue for all banks and credit unions, you must always keep an eye on your interest margins—right down to the individual product level. You also need to forecast anticipated rate changes in real time to ensure your evolving business plans are as well informed as possible. However, if account balances are siloed in your enterprise resource planning (ERP) or asset liability management (ALM) system, you won’t have an easy way to identify your most profitable financial products. Instead, you’ll have to dig through a bunch of spreadsheets to find the data you’re looking for—and that’s why having one source of truth is so important for net interest margin planning. By integrating your source systems, automating data inputs and using purpose-built templates for your actuals, forecasts and scenario analyses, you’ll get a holistic view of interest income within one secure platform. You’ll also be able to back up your business projections with per-product revenue estimates relative to prime lending rates and yield curves. That way, your leaders will have what they need to make timely, data-driven business decisions without all the manual effort. The finance team at ATB Financial—a retail and commercial banking chain in the Canadian province of Alberta—offers a best-in-class example of agile interest margin planning in action. With Vena for Banks and Credit Unions, ATB’s finance team tracks consolidated revenue figures for more than 100 unique banking products. Up-to-date data at their fingertips makes it easy to quickly determine whether actual versus budget differences are due to margins or price/volume variances. It's given ATB the freedom to update budgets whenever they need to and to plan a lot more confidently with a level detail they didn't have before. Read this case study and learn how ATB Financial transformed budgeting and forecasting in just three months with Vena. Streamline Regulatory Reporting With Repeatable Workflows There are few industries in the world subject to greater scrutiny than banking. Financial institutions in particular are subject to increasingly stringent regulatory reporting requirements, which isn't easy to navigate if you're doing everything manually. However, if you simplify your reporting cycle with automated consolidations and data entries, SEC filings will feel like a breeze instead of a burden. The same logic applies to larger institutions for CCAR reporting and DFAST submissions. You need to design efficient processes that are easy to understand and execute. But efficiency is often difficult with regulatory reporting, given how collaborative the process really is. If budget owners, managers and executives all need to sign off on every filing, you might have multiple versions of the same template floating around in emails. You need to align your stakeholders and define their roles in the reporting process—and that’s where custom workflows really come in handy. They allow you to assign tasks based on individual roles and security permissions, while also ensuring your reports are done quickly, accurately and with a fully trackable audit trail. As your team repeats the process for each subsequent reporting cycle, speed and realiability will only get better. Terry Hardy, former Manager of SEC Reporting at Wells Fargo, has first-hand experience with the benefits of repeatable workflows. He helped implement Vena at the banking giant in 2012, overseeing all aspects of regulatory reporting until his retirement in 2019. With Vena for Banking and Credit Unions, Terry was able to: Automatically detect variances between reporting periods   Track changes to SEC filings and reporting templates with detailed audit trails   Develop an regulatory reporting framework built on teamwork and cross-functional collaboration For more insight from Terry, check out his talk, “Transforming Regulatory Reporting Through Teamwork” on PlanToGrow.com. Empower Your Leaders With Dashboards for Data Storytelling Have you ever prepared for a meeting with your board or asset-liability committee, but didn’t quite know how to tell the story behind your numbers effectively? You’re probably not alone, because with so many external reporting requirements in the banking and financial services industry, it can be difficult to determine which KPIs to focus on internally while also communicating impact to the right stakeholders in the right way. But regardless of what metrics you use to define success—whether it’s AUM over benchmark, ROA, ROE, sales per branch or others—how you deliver that data is what’s important for driving performance. Effective data storytelling with easy-to-read dashboards is the key to engaging stakeholders and sharing actionable insights wth agility. After all, numbers on a spreadsheet aren't all that engaging, especially to executive leaders who just want to see the big picture. If you can actually show stakeholders the numbers with beautiful graphs and charts, you'll influence more confident decision making throughout every stage of your planning cycle. When built well, dashboards allow you to identify relationships between key metrics, provide a visual representation of earnings and maintain complete transparency across the entire organization. As you work to execute your business plans, dashboards give you real-time indicator of emerging trends and performance—making it a lot easier to pivot and adjust your course if necessary. Enova International—an online financial services firm with more than 1300 employees around the world—does a really great job turning numbers into insightful narratives. The finance team maintains agility by releasing “flash reports” in Vena at the beginning and end of each close period, which gives management a live look at interest margins and cost of revenue. Vena’s real-time dashboards provide context and helpful reference points, making it easy to track the evolution of those metrics as the business grows. Check out our dashboarding guide for everything you need to engage your stakeholders with compelling data storytelling. Finance teams at banks and credit unions will always have to deal with complexity. But by taking the steps above to integrate net interest margin templates, streamline reporting workflows and build real-time dashboards for effective, data-driven storytelling, you'll find the flexibility you need to drive improved performance and efficiency across the business. Pre-Configured Solution Vena for Banks and Credit Unions Plan with peace of mind with financial modeling built for banks.

Talk of “regtech” may be getting louder, but stress-testing data and technologies can be applied beyond mere compliance in financial services Regulatory “challenges.” Regulatory “burdens.” Regulatory “chores.” Ever notice that when organizations or industries talk about their compliance requirements it’s often in the most negative way possible? Even recent news about the U.S. fed dropping the qualitative requirements of its Comprehensive Capital Analysis & Review (CCAR) stress tests has roundly been described as “relief” for “exasperated” executives at the country’s largest banks. Maybe we need to rethink our vocabulary, especially when doing the right thing is often described as a necessary evil rather than something that could benefit everyone involved. In a recent article published in American Banker (subscription required), I highlighted how SaaS tools are quickly becoming a way for banks not only to get ahead of regulatory stress test requirements, but to streamline operations and improve how they manage their capital. This was echoed by Eric Byunn, partner at Centana Growth Partners, a private equity firm and Vena investor that specializes in finserv, fintech and other firms in what it calls the financial ecosystem. In the same article, Eric pointed out the basic challenge of gathering holistic compliance information quickly, accurately and easily: “We had a couple of specific conversations with large U.S.-based banks, and they expressed a need to do regulatory reporting in a way that could draw upon many different parts of the bank with the ability to turn that information over to whoever their requesting regulatory authority is.” Eric Byunn, Centana Growth Partners While banks routinely brace for stress-testing, for example, and “regtech” has emerged as a rising category within the software sector, the most successful business decision-makers may wind up being those who see the tools and rules involved more as opportunities than unpleasant but inevitable priorities. Lessons from Early Adopters Ashley Stengel, head of business performance and lead for financial planning and analysis at Great Western Bank in Sioux Falls, S.D., is an example of the changes underway in major organizations. She said it’s not just a matter of getting a passing grade once you’ve prepared submissions for CCAR, DFAST and the like, but using that effort to identify opportunities for business value. “When we pull different tests using this technology, that’s the starting point for capital planning,” Stengel said. Her colleague and CIO, Scott Erkonen, added that the work to achieve compliance often results in the consolidation of information that has traditionally been stuck in silos. “That real-time updating is a tremendous advantage to us — instead of having to work in a system where we have to wait for overnight runs or some sort of batch processing,” he added. Great Western isn’t alone. According to a report last year from Grant Thornton, 78% of surveyed banks said the cost of preparing for stress tests is “very high or high.” This is on top of what they need to allocate for M&A and other business activities. “As a result, (banks) are challenged to deliver strong returns to their shareholders and require superior productivity throughout their organizations, including in regulatory compliance,” the Grant Thornton report said, adding that beyond lowering those costs, those who use regtech strategically discover that compliance can be a means to other ends within an organization: “The application of data analytics is foundational . . . banks gain the ability to evaluate risks in real time by embedding big data and risk analytics into revenue-generating activities.” Grant Thornton: Is RegTech the future of compliance? Stress Testing in Transition This shift in thinking is coming at a time when longstanding criticisms of stress-testing in banking are not only being heard, but potentially leading to major changes. As Reuters recently reported, for example, the Federal Reserve plans to host a conference this summer that will examine the effectiveness of stress testing and look for areas of improvement. Translation: expect further “relief” from existing stress testing regulations. Earlier in January, the Fed also proposed a rule that would eliminate the “adverse” scenario from the test and allow firms with an asset threshold above $250 billion to conduct company-run stress tests once every other year, rather than annually. Let’s be clear, though: banks will still have to demonstrate they have the capital they need in the event of a crisis, and that they are using that capital as efficiently as they can. As a recent post on Bank Policy Institute pointed out, upcoming regulations like Current Expected Credit Loss (CECL) could significantly increase compliance costs if they are incorporated in stress tests under the assumption of perfect foresight. The need for the right tools — and a strategic approach to gathering and analyzing the necessary information to satisfy regulators — is not going away. True leadership, however, will align regulatory requirements with outcomes that contribute to the overall success of the business. That’s why experts from McKinsey actually recommend even non-financial organizations should conduct their own stress tests: “The usefulness of risk-measurement exercises can be limited if they aren’t dynamically linked to strategic planning, capital allocation, and other business decisions. That means such exercises need to include more than just a CFO or a board audit committee . . . or they amount to little more than a “tick-box exercise” that fails to change behaviors in the business.” McKinsey: Stress testing for nonfinancial companies McKinsey argues such exercises can directly benefit shareholders and other stakeholders. But they also caution that doing so will undoubtedly demand more sophisticated ways of bringing data from across organizations into a single, cohesive view. A challenge, to be sure, but nothing finance departments haven’t seen before.   Next Steps While affected banks have many of the right technologies in place already, “regtech” as a category is starting to represent a dizzyingly broad array of applications. Consulting firm Deloitte has started what will be an ongoing list of regtech vendors that spans not only reporting but risk management, identity management & control, compliance and transaction monitoring. This is the perfect time, in other words, for those leading compliance efforts in their organization to dive deeper into what’s available and what may soon become mission critical, both for stress testing as well as desire to have the analytics to support buybacks and other capital-oriented decisions. Some factors to keep in mind include: How Can You Minimize Business Disruption? While the end result of stress tests could offer organizations greater reporting agility, a centralized view of data and other benefits, it shouldn’t come at the expense of tying up resources that are needed to serve day-to-day objectives. Consider where the technology can assist in accelerating processes and reducing time-consuming complexity. What Will Decision Making Look Like? Stress tests provide assurance to regulators, but you also want to ensure regtech tools make it easy to surface actionable insights for business leaders beyond compliance. Look for approaches that allow a deeper look into granular areas and the ability to accommodate ad-hoc requests – particularly in managing capital and liquidity. How Quickly Can Your Model Be Recalibrated? The variables banks consider as part of stress tests are often based on historical information. In the “real world,” the models an organization use may have to consider more specific factors in order to avoid a crisis. When (and How) Will We Need to Look Back? The best governance and control methodologies ensure that organizations can justify the decisions made, whether in response to a stress test or to an actual business issue or crisis. Imagine the kind of post mortem you may need to conduct and how best to empower your stakeholders in an accessible and transparent way. With market volatility a fact of life and changes in government positioning around stress testing happening more frequently, banks would do well to look more broadly at the application of related technology and data to strengthen their internal capabilities — and 

Originally published on the Certent Insider blog.  With the increasing complexity of regulatory compliance, it’s becoming more challenging for companies to comply with SEC requirements and, at the same time, provide clear and concise information to their shareholders. The good news is that existing public disclosures provide a wealth of relevant information, and if used in a systematic way, can significantly improve disclosure management processes and reduce compliance risks. When working on disclosures thatare particularly complex or uncommon, ready access to precedent filings can save you valuable time and help ensure regulatory compliance. You don’t have to start from scratch to write something that other companies have already vetted with auditors and publicly disclosed. And the best part is that you can pick and choose the disclosures that most closely fit your business case, industry, or specific accounting practice. This becomes especially relevant when a new rule is issued or your company has business events that require additional disclosures. For example, the pay ratio disclosure rule, recently issued by the SEC, adds a new paragraph to the executive compensation disclosure (Item 401) and requires registrants to disclose their pay ratio in annual reports. If your company falls under this rule, you will need to disclose information that you have likely never reported before, such as methods and assumptions for calculation of the ratio, as well as additional information to provide context for your shareholders. It might be extremely difficult and time-consuming to prepare such disclosures if you haven’t done it before, but with a purpose-built solution like Certent Disclosure Research, you can review filings of peer companies and adopt currently accepted best practices into your disclosure process. Disclosure benchmarking not only provides you easy access to information from your peers, competitors, and industry leaders, but also enhances your understanding of audit, compliance, governance, corporate actions, and litigation issues. For example, you can leverage peer disclosures about mergers or divestitures to aid in disclosing your company’s corporate actions. With thorough research of public filings, you can also uncover fees that peers have paid to auditors, legal counsel, and proxy firms. Find out about more ways disclosure benchmarking can improve your business in this white paper. Performing faster and more thorough research of public filings, and benchmarking disclosures, can improve your disclosure management processes and increase your team’s productivity. With an essential solution like Certent Disclosure Research, you can save time, decrease risk, and improve the quality of your disclosures. Be sure to start your 30 day no-obligation free trial today! About the author Rob Blake is the Director of Product Strategy at Certent.

Institutions should automate some of the core processes involved with CCAR to minimize the time, capital and resources they pour into manual compliance, according to Boyke Baboelal in his article, “CCAR Results: Taking the stress out of stress testing.” Supporting his claim is a 2013 PwC Survey of banks, wherein 47% of respondents indicate they plan to invest materially in technology over the next three years to avoid modeling deficiencies and their associated costs and to free up time to work on other parts of the regulatory stress testing process that could use improvement.   Spreadsheets must be supplemented with more robust technology PwC also predicts that, going forward, the sole reliance on uncontrolled, disparate Microsoft® Excel® spreadsheets will not be a sustainable approach to stress testing. They suspect the use of “spreadsheet spaghetti” — a system of dozens or hundreds of spreadsheets created over time with little or no governance mechanisms around them — will put data reconciliation and modeling processes at risk, especially as regulatory stress demands intensify. The most efficient ways to pass a bank stress test In his article, Baboelal also emphasizes that the most effective approach to CCAR reporting includes a robust data infrastructure and embedded data management processes. Similarly, in their brief, “Stress testing: Midterm results improved, but it’s all about the final”, PwC analysts explain that sophisticated workflow tools can give senior management a transparent view of the end-to-end mapping of stress testing, risk identification and data processing within the institution. The authors of the PwC briefing also recommend that institutions standardize processes around centrally managed data collection and reporting mechanisms and implement an enterprise-wide data strategy and governance structure that will ensure the accuracy and consistency of information. Without automated, transparent, flexible, enterprise-wide processes, institutions face the risk of submitting inaccurate data to the Federal Reserve. Error-ridden reports and insufficient internal processes can have significant consequences. The consequences of failing a stress test For example, two major U.S. banks recently failed to meet CCAR’s requirements. One bank failed because they did not sufficiently improve parts of their capital plan that regulators had previously told them to pay attention to. As a result, the bank could not proceed with their capital plan and their shares fell by almost 5%. Another high-profile bank miscalculated a crucial measure of its financial health. The mistake led the bank to report that it had billions more in capital than it actually did. Regulators responded by suspending the bank’s shared buyback and planned increase in its quarterly dividend. The bank’s stock also tumbled by 6.3%. Would these banks be stronger today if they had taken a more robust and holistic approach to stress testing and passed the CCAR? Conclusions The manual governance and consolidation of data is insufficient when it comes to preparing accurate and timely reports for stress tests, such as CCAR. Flexible, automated, enterprise-wide data frameworks protect the integrity and consistency of data, while transparency gives management insight into crucial indicators of an institution’s ability to survive times of economic and financial stress and a passing CCAR mark. Click here to read the full article.