How to Manage Financial Reporting and Month-End Close Across Regions

“For Singapore, financial reporting and tax requirements are clear,” says Yang Shuzhen, Director of Regional Accounting Services at BoardRoom Group. “The Inland Revenue Authority of Singapore (IRAS) provides guidelines and illustrative examples, making compliance quite straightforward. However, in countries like Thailand and Indonesia, things are more open to interpretation.”

Understanding differing financial reporting frameworks will support a more robust month-end close procedure, as long as businesses know how to adjust their reporting processes to meet local compliance standards.

ERP (Enterprise Resource Planning) systems often present another significant challenge for month-end financial reporting. As Shuzhen points out, many companies use robust ERP platforms like SAP but fail to localise them for region-specific tax and reporting requirements.

“Clients roll out a system regionally without asking if the system is localised. For example, GST in Singapore and SST in Malaysia require different setups,” Shuzhen says. “We’ve seen situations where clients manually manage GST offline instead of using the system, leading to delays and complications during month-end reporting.”

Managing transactions in multiple currencies introduces complexity in month-end closing. Companies operating across different regions need to ensure consistency when applying exchange rates.

Eunice Hooi, Managing Director Asia, Tax and Accounting, BoardRoom Group, explains why: “We often see clients dealing with different functional currencies that differ from their reporting currency,” says Eunice. “This adds complexity when working across multiple regions, as managing transactions in multiple currencies simultaneously – along with fluctuations in exchange rates – can lead to inconsistencies in financial reporting.”

These inconsistencies can have far-reaching consequences. “Inaccurate financial statements fail to reflect the company’s true financial position,” says Eunice. “This can mislead stakeholders, including investors, creditors and analysts, leading to poor decision-making and potential reputational damage.”

Payment cycles also vary significantly across markets. When companies lack standardised reporting structures, financial teams may struggle to meet month-end deadlines. Regional holidays compound these challenges.

“For instance, during Chinese New Year, countries like Singapore, Malaysia, and Hong Kong have reduced working days, which impacts regional reporting schedules,” explains Shuzhen. “Yet global headquarters still expect reports to be delivered on the second working day.”

Despite the challenges, there are practical strategies and month-end close best practices your business can implement:

• Localise ERP systems: Ensure ERP platforms are adapted to meet local compliance needs.
• Harmonise the chart of accounts: Establish a standardised account structure to facilitate smoother data consolidation and reporting across regions.
• Monitor regulatory changes: Continuous monitoring and adaptation are essential to handle frequent updates to local regulations.
• Develop a regional reporting calendar: Align reporting timelines with regional holidays and payment cycles to prevent conflicts and reduce pressure on finance teams.
• Integrate data processes: Address data silos by improving system integration. Reporting delays can stem from manual data manipulation due to poor system harmonisation.
• Invest in staff training and development: Equip finance teams with ongoing training on the latest accounting standards, regulatory updates, and financial reporting best practices.

With the right processes in place, finance teams can streamline month-end close activities and maintain confidence in their financial operations.

Many multinational companies opt to establish shared service centres (SSC) to centralise finance operations. While this can improve efficiency and reduce costs, it is not without challenges.

Shuzhen cautions against the risks of centralisation without localised knowledge: “Companies often set up shared service centres to streamline processes and save costs,” she says. “However, they sometimes forget that regulatory knowledge is essential. For example, if the accounts payable team in a central location isn’t aware of local withholding tax requirements, they might process vendor payments incorrectly, leading to compliance issues.”

To ensure SSC functions effectively, companies should either retain some level of local expertise within the finance team or partner with professional service providers with in-depth regional knowledge.

Another key factor in achieving a seamless month-end close process is leveraging technology.

Eunice highlights the increasing need for e-invoicing compliance: “With e-invoicing mandates becoming more common in jurisdictions like Malaysia and Singapore, finance teams must integrate API-driven solutions,” she says, highlighting the increasing need for e-invoicing compliance. “Without automation, compliance is difficult, and errors in reporting become more likely.”

In addition to e-invoicing, investing in multi-currency, multi-region accounting software can significantly improve the closing process.

“These tools can automate report generation, align with different accounting standards and reduce errors when converting reports between frameworks,” adds Eunice.

By combining centralised operations with localised expertise and automation tools, finance teams can create a month-end close best practice framework that enhances efficiency and accuracy.