Financial statements at the push of a button - Digital financial statements reduce the administrative burden of your company
Digital financial statements make it easier not only for companies, but also for accountants, investors, and authorities. It is one of the most significant changes promoted by the Real Time Economy project in Finland, led by the Finnish public administration.
The project aims to improve the conditions for small and medium-sized enterprises (SMEs) to make their operations more efficient. At the same time, the goal of the digitalisation of the economy is to make the grey economy more difficult and improve transparency.
High-quality and easily utilized financial statement information
Digital financial statements in iXBRL format are versatile. The statement automatically consists of data from the financial management software, is forwarded to the necessary parties and is in a format that facilitates the utilisation and interpretation of the information.
An interface that enables digital financial statements is currently being introduced into the software so that financial statements can be sent to Finnish Patent and Registration Office (PRH) directly from the accounting software. In addition, Accountor is a pioneer among the first companies to participate in a national working group whose goal is to make auditors’ work easier by opening an interface to financial data.
Accountor is currently developing digital financial statement making it soon available for companies.
When the content of the financial statements is in a machine-readable, structured format, information can be transferred, analysed, and compared efficiently and automatically. Data processing is faster, the need for manual work is reduced, and data quality can always be verified.
In addition to reducing the administrative burden, the spread of digital financial statements has a significant social impact. Digitally accessible financial statement information benefits and facilitates all entities that use trade register data. Thanks to digital information, for example, investors are able to compare and analyse companies’ data easily.
Currently, listed companies are already obliged to produce financial statements in iXBRL format, and the practice is quickly becoming common among smaller companies as well.
From invoices to accounting and the authorities
At the same time, the international ISAE certification standard is also being introduced in the European Union, which facilitates the auditors’ work in verifying the correctness of the financial statements. With the help of the standard, the software manufacturer assures that it operates in accordance with good practices, and thus the auditor can trust the correctness of the material produced by the software. In the future, all companies subject to auditing must ensure that the software they use meets ISAE requirements.
Auditors’ work becomes significantly easier and more efficient when the software produces services and interfaces intended for them.
A professional partner, such as Accountor, ensures that the interfaces and necessary capabilities exist and are available when it is relevant for your company. A conscious partner also constantly develops its systems to meet the changing requirements.
Ensure your company’s digital financial management capabilities
- If your company’s financial administration is not yet managed digitally, take it into use as soon as possible
- Choose a financial management software partner that has the interfaces required for digital financial statements
- Choose financial management software that meets ISAE requirements.
Sustainability must also be reported digitally in the financial statements
The CSRD (Corporate Sustainability Reporting Directive), that is, the EU’s sustainability reporting directive, is one of the driving forces behind digital financial management. As a result of the directive, large companies have the obligation to attach a sustainability report to the 2024 financial statements, which in Finland must be submitted to PRH in digital format.
The goal of digital sustainability reporting is to reduce the chances of greenwashing by transparently highlighting sustainable measures in the company’s financial statements. The sustainability report in accordance with the directive must be audited by an auditor.
As part of the sustainability reporting, companies also need to document the sustainability of their supply chains – this is how the directive’s obligations will apply to many Finnish SMEs already next year. Although smaller companies will not yet be obliged to report on sustainability digitally in connection with the financial statements next year, they must be able to present documents on their sustainability when operating as part of the supply chains of larger organisations.
Auditing, financial statements and sustainability reporting will take a big digital leap in the near future. By choosing a knowledgeable software company as your partner, you ensure that your company operates in accordance with changing regulations – as a forerunner in digitalisation.