That is an absurd cadence. It is extremely expensive to do this reporting; an an enormous amount of useless activity is slaved to providing it in companies that need to. This is literally a call for more bureaucracy theater.
The obvious net effect is that companies would structure themselves to no longer have the reporting requirement, as the cost of reporting exceeds the benefits. That would not benefit society at large.
The reason quarters take so long to close is because the numbers are being fiddled with. There's no reason someone shouldn't be able to close a quarter and report the numbers with the automation we have today in technology, meaning without some magic AI/LLM, other than people are constantly trying to reclassify expenses or income in a way that saves the quarter
Why, after 30-40 years of modern computing in accounting does it still take a month to close the books? I worked at a public company that was $100m revenue yearly and it took a whole month to close the books. Absolute insanity. Even AT&T or Verizon or GM should be able to report at least weekly.
This is a naive view of what reporting entails and the difficulty of coalescing a report that meets the requirements of the audience the report is for. It isn't a numbers dump from a database, it requires substantial interpretation of things that the database does not and cannot contain. It isn't fiddling with the numbers, it is that the numbers can't contain things relevant to their representation for external parties as a legal matter.
When I have been in positions where reporting was a necessary part of my job, reporting related activity probably consumed 1/3 of my time. Even in highly optimized contexts, it consumes a stupid amount of time and the impact on the consumers of those reports is often quite low. It is almost a total waste of time.
There should be some reporting but the current cadence and requirements is way too high for many large companies. Reporting doesn't have infinite ROI.
> it requires substantial interpretation of things that the database does not and cannot contain.
Do you have examples? This seems like something that is a solvable problem, and from the outside it can seem like it is only about not being willing to switch to a new paradigm. That unwilling ness can come from avoiding real consequences like loosing a competitive edge due to allocation of resources to the switchover.
When people think of automation I'm assuming their thinking of the financial statements (balance sheet, income, cash flows, equity).
Reporting also contains narrative explanations by management of: the company's financial health, updates on any new or existing market risks and the company's strategy to deal with them, any changes to controls or accounting procedures, updates on any new or existing litigation, and more.
These reports need to be certified for truth by the CEO, CFO, and relevant officers under penalty of 10+ years in jail and millions of dollars in fines personally.
It's also common to do a press release, earnings call, and investor presentation but those aren't required.
I meant just closing the financial records, not coming up with the shareholder marketing. It can take a month just to find out if you "made" the quarter or not, mostly because accounting and finance is combing through every line item to see if they can recategorize it in a way that makes the numbers look better but doesn't result in them going to jail
In what should be a very black and white line of work there is a ton of judgement and negotiation involved
Why can't that interpretation be done earlier in the process and then put into the database?
Isn't it the same amount of transactions to be interpreted no matter what the reporting period is?
Do you understand that as a legal matter these must be good faith representations of the current state to the best of your knowledge? You can’t serve up intentionally stale information without inviting legal repercussions. The preparation process takes weeks. This is a very serious legal matter.
These are being revised and updated right up until the point they are released to provide the most accurate reporting possible.
You gravely underestimate the legal seriousness of these reports.
The category changes over time?
So let's try to think of solutions instead of giving up. A law that requires daily disclosure can change how the reporting works so you don't need to update those category decisions 200 times.
> You can’t serve up intentionally stale information without inviting legal repercussions.
> These are being revised and updated right up until the point they are released to provide the most accurate reporting possible.
> You gravely underestimate the legal seriousness of these reports.
All of these seem look like an argument for additional automation.
It is not a technology problem.
Does the technology already exist? Things are almost never only a tech issue alone. That does not mean tech can not help, even if the tech that would help is currently impractical. What is impractical now though may not be in 10, 20, 50 years.
Going over what I quoted:
> You can’t serve up intentionally stale information without inviting legal repercussions.
Keeping information fresh and up to date is something technology has helped with in many areas. If there is a reasons why it can not help here then I an interested in why or that the current tech already does a good enough job in this area.
> These are being revised and updated right up until the point they are released to provide the most accurate reporting possible.
Technology can help verify last minute changes, running a test suite for example or similar. How hard that is to make or maintain though may make impractical.
> You gravely underestimate the legal seriousness of these reports.
Having an audit trail and known processes may be helpful here too if the current tooling is not adequate.
I quoted parts of the comment that looked like areas where tech has already helped in other areas. What I want to find out are details about what exists, why people think it can not be better, or why pervious attempts have failed, or why things are currently optimal.
My fiancee is the accounting manager at a university. Why? Because people don't submit expenses on time, invoices are delayed or some still done manually, and all manner of things. Even for them it can take a couple of weeks.
While there may be some "hijinks" (in their case, institutional advancement likes to steadily rearrange endowments or donations to take advantage of offers to match donations, etc., but that's not really a delay, as accounting basically says things like "No, that gift has already been spent"). Even with things like Concur or Expensify, expenses aren't classified on time, submitted for reimbursement, etc.
It’s only expensive because it happens so episodically that it doesn’t require automation. Automation leads to scale leads to reduction in cost. The analysis humans do on top of it can be done through a periodic filing, but the totality of disclosures can be done continuously other than the periodic human opinion fluff. The notes and details can be filed as they are relevant without undue burden. (I.e., a large onetime expense can be explained as it happens - I assure you it is being explained internally at that time in more detail).
I was at a large Wall Street firm which closed its books daily and has done for decades. They disclose daily to the fed and others. It was work for sure but the benefits of constantly knowing your business far out weighed the cost. So I don’t buy that it turns into more theater, you can’t do theater at a continuous pace. Theatre takes time, and the level of theatre increases as the pace of disclosure decreases.
The argument is that the reason quarterly earnings take so long to report is that they're done quarterly.
If there were done daily, they would take no time at all, and would be close to free.
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That was the point - it's absurd as a manual process, and forces automation.
> an an enormous amount of useless activity is slaved to providing it in companies that need to
Curious why the word "slaved" was used here instead of the much more nominal "employed".