The fifth project in the program carries the name SME50, to further accentuate the potential to cut the cost of administrative burden of SMEs to 50% by the means of value chain automation and related services.
The first module in SME50, Automated Financial Administration (AFA), studies and develops the ways to utilize structured data from the business documents to automate accounting and cash flow estimates of SMEs. Structured information from business transactions forms the platform for this development. Two main approaches are taken to automate financial administration of organizations; Real-Time VAT and automated accounting model based on electronic bank statement.
Fully Automated Reporting (FAR) module goes further on this path by examining a universal reporting interface to transfer information in structured format to different authorities. The XBRL reporting language is an important component in the implementation. Reporting practices and formats are closely linked to the internal processes (AFA), defining how the information is formed as part of accounting activities. For instance, if the accounting is based on the e-invoicing information structures and electronic financial statements, the needed information content for external reporting can be easily compiled and transferred in XBRL format. Further on, the receiver can automate integration of the well defined and semantically identified information elements to its information systems. In addition to the XBRL development, FAR is taking steps to find solutions to automate payroll reporting of enterprises.
It is our strong belief that environmental burden information will be complementing financial information in decision making and reporting, both in internal administrative and external regulative reporting processes. Sustainability Intelligence Management (SIM) module has a focus in complementing financial information with sustainability information. In practice, the objective is to find new and innovative ways to utilize the existing financial information exchange channels and formats to cover this new type of content. It is expected that demands for exchanging and reporting of sustainability information will increase and by utilizing already existing channels and practices that change would be easier to handle and not creating too much additional burden on the SMEs (or other organizations).
AFA, FAR and SIM are developing financial value chain processes towards more automated and sophisticated solutions and services. However, when taking risk elements into account, the expected values and event times are not necessarily exactly correct, but those include uncertainties. Enterprice Risk Mitigation (ERM) is looking at the whole ecosystem and building better risk management models, which, integrated with the business information, will provide more accurate basis for decision making.
Contact Terhi Aspola, Project Coordinator for SME50, email@example.com