Bank Reporting: Challenges & Tips to Success 

If your company has secured debt financing as a way to grow your business, congratulations!   

What comes next can be a lengthy process involving an increased need for financial visibility and accuracy, a solid understanding of stringent regulatory requirements, and the ability to successfully prepare for an audit, to name but a few of the many duties of the bank reporting process. 

As experts in helping organizations improve accounting and finance processes and enhance efficiency, we’ve outlined some essential information about the bank reporting process alongside some tips and steps to prepare. 

What are some of the main challenges of bank reporting? 

Banks and lenders have robust sets of rules that companies must follow, from adhering to complex and ever-evolving reporting standards to meeting stringent deadlines set by auditors and other stakeholders. 

In the event of a debt covenant, the bank or lender will also require the organization receiving the loan to go through an audit – so in order to be audit and debt-covenant-ready, companies will need to put a hefty focus on bank reporting, process documentation, and the implementation of finance and accounting best practices that comply with today’s laws and regulations. 

The bank reporting process can bring additional challenges to light if a company uses outdated technology and systems, lacks in-house resources and expertise, and/or fails to take external factors and market conditions into account. 

Common bank reporting challenges: 

• Understanding and adhering to regulatory requirements and standards set forth by FASB, IFRS, and more. 
• Ensuring accuracy and availability of historical financial data to successfully meet stringent reporting deadlines. 
• Preparing accurate financial statements and reports that factor in the evolving market conditions of today. 
• Understanding and disclosing financial risks, such as credit, market, and liquidity. 
• Navigating stringent restrictions set forth by banks and lenders that may disrupt operations or growth. 
• Running the risk of overloading current finance and accounting teams as their focus turns away from day-to-day duties to support audit preparation and bank reporting initiatives. 
• Juggling auditor and stakeholder requests and ensuring consistent communication. 

Tips and steps to establish bank reporting success: 

1. Gain a solid understanding of the regulatory requirements, deadlines, and financial ratios that will need to be reported and communicate this to company teams to ensure alignment. 
2. Attribute resources involved in the reporting process, either by training current employees or outsourcing bank reporting to a trusted partner. 
3. Integrate and optimize systems, processes, and best practices for collecting, analyzing, and reporting financial data and ensure any changes to operations are well documented to proactively prepare for the auditor’s review. 
4. Assess potential financial impacts and risks by conducting scenario planning and developing robust financial forecasting models. 
5. Set up a regular cadence to monitor bank reporting initiatives to identify and mitigate potential issues before they arise. 
6. Establish effective methods of communication with shareholders, auditors, and lenders to keep them informed. 

Final Thoughts on Bank Reporting 

Bank reporting often brings additional complexities to organizations looking to grow, especially if it pulls focus away from an already saturated finance and accounting department.  

If your organization is struggling to meet bank reporting requirements, our team at Bridgepoint Consulting is here to help with: 

• Ensuring accuracy of financial reports and statements. 
• Implementing finance and accounting best practices. 
• Preparing for an audit and managing auditor requests. 
• Debt covenant calculations and compliance reporting.