A local software company has beaten off global competition by developing and implementing a financial reporting solution designed to support business in meeting local and International Accounting Standards (IAS) ahead of Europe`s 2005 deadline.
Local financial software developer Financial Reporting Solutions (FRS) has developed a home-grown shrink-wrapped solution ahead of global suppliers. The SA developer is offering the solution to companies racing to meet international and local regulatory, corporate governance and financial compliance requirements.
According to FRS Director, Warren Deerens, the financial software has been in development since 1996 and has already been implemented in its final form in a select number of South African corporates.
"We initially custom-developed software to enable companies to fully meet the requirements for GAAP compliance as we found there was usually a lack of financial detail in old data collection methods. Then we took it a step further to anticipate requirements of the then emerging International Accounting Standards (IAS) and other global harmonisation trends. This advanced our software to the point where it became fully IAS-compliant as far as transaction modelling was concerned ahead of local changes.
"The new software, allows a seamless integration and automation of the whole financial reporting process. It is ready for market now and is compliant with global IAS standards. This makes it perfect for overseas and local companies wishing to become compliant for the 2005 deadline," he said.
"Our solution automates each individual subsidiary financial reporting process and allows for traditional consolidation process which are extremely time-consuming, to be improved tenfold. Fully implemented, the solution allows for the production of IAS compliant financial reporting within seven minutes - a marked improvement on the traditional turnaround time. In addition, faster and more accurate IAS-compliant reporting could also mean a reduction in the cost of capital, as it is often times perceived that Third World countries` financial statements are not comparable to the level of transparency and compliance as their First World counterparts."
He added there is a reputation risk for companies that are late with their financial reporting as this can create the perception that either something is wrong or something is being hidden. This can have a negative impact on a company`s share price.
In order to take its solution to the market in SA and overseas, FRS has partnered with the financial accounting and advisory firm PricewaterhouseCoopers and ICT integrator Comparex Africa.
According to Doug Franke, E-business Solutions leader for PricewaterhouseCoopers: "The solution will empower JSE CFOs to meet new reporting requirements. They`ll also be able to make more effective business decisions, as they will have a more detailed understanding of their own financials and will achieve financial transparency for the investing public, both locally and abroad."
Local ICT provider Comparex Africa joined PWC to partner with FRS and will offer the solution to its stable of corporate and SME clients.
According to John Lagaay, group executive: business applications for Comparex Africa, the marketing of this solution to their listed clients will start immediately.
"Companies must take steps now if they are to become IAS compliant by 2005. Many SA companies think they are compliant but there is often an accounting gap between the entered aggregate figures from a businesses ERP system and the specific requirements for IAS. Especially regarding cash flow, detailed movement notes and financial instruments."
Lagaay said the accounting time to convert these can be between six months to a year and the correct corporate information needs to be converted before 2004 so IAS compliant data is in clients` ERP systems by 2005.
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