John Hancock Financial Services and its parent company, Manulife, have significantly reduced the time it takes to produce financial statements, improved collaboration among users and lowered the risk of inaccurate or inconsistent statements since adopting Tagetik software.
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Boston-based John Hancock and Toronto-based Manulife have installed Tagetik Collaborative Disclosure Management in their desktops. They use Tagetik software for quarterly reporting to boards of directors and some of the quarterly footnotes for filings with various insurance regulators and the National Association of Insurance Commissioners, as well as for annual audited financial statements that are filed with agencies in the U.S. and Canada.
John Hancock, which provides products such as life insurance, mutual funds and long-term care insurance, was the pilot for the on-premises Tagetik software, and Manulife went live in Canada about a year later in 2014.
With Tagetik, the production of financial reports is now largely automated. Almost 95% of the numbers used to produce John Hancock's financial statements are fed through the financial reporting software, either from a direct feed from Lawson's general ledger or a data mart, said Jeff Nataupsky, a certified public accountant and vice president of legal entities, financial reporting and controls for John Hancock.
John Hancock has seen about a week's time saved in the production of financial statements that concludes with the delivery of the financial reports to the auditors or senior management for review, he said. "It has definitely made the process easier," Nataupsky said.
Financial statement software speeds final changes
The work by Nataupsky's team includes production of financial report footnotes, a key part of a financial statement that explains or supplements the main document. The footnotes detail how the company's accounting policies affect its results.
With Tagetik, if any number or language is changed that affects a footnote, the revision is reflected in all the different reports that use the footnote, said Dave Kasabian, chief marketing officer for Tagetik Software, based in Lucca, Italy. Last-minute changes in regulatory reports and financial statements can be made more quickly and with more confidence.
John Hancock, for example, uses Tagetik for annual audited financial statements for three insurance companies, three broker-dealers and five other entities in the U.S. John Hancock also uses the financial reporting software for quarterly board reporting for eight to 10 entities, as well as quarterly and annual footnotes, such as investments, debt and fair-value disclosures in regulatory filings.
Before Tagetik, John Hancock and Manulife used a combination of Microsoft Word and Microsoft Excel for financial reports and statements. The difference between Tagetik financial statement software and Excel is dramatic, Nataupsky said.
"We have nine sets of financial statements to prepare on an annual basis, and it was all being done manually in Microsoft," Nataupsky said. "Every number was typed in. Various business units would submit data, and it all was consolidated into Excel schedules. It was an extremely manual process, very time-consuming. It was a giant production exercise."
Financial reporting software provides special functions
Nataupsky cited several functions in Tagetik, such as linking, which allows a user to change a number in one disclosure, and the change will be automatically updated in all comparable disclosure documents.
Tagetik software can also identify common rounding errors in financial reports and automatically create an entry to balance a decimal, for example. The software can rectify rounding errors in every report each month and save a lot of work for users who would otherwise be required to find the errors and manually correct them.
He also said Tagetik customized reporting for John Hancock. Tagetik, for example, enhanced a cross-check feature that allows accountants to ensure numerical disclosures are consistent and to compare a group of amounts that, when added together, must equal a number disclosed in a financial statement. "We worked with them to make the cross-check feature more user-friendly and provide a better audit trail," he said.
Jeff Nataupskyvice president of legal entities, financial reporting and controls, John Hancock
About 20 to 30 people at John Hancock, including accountants and the directors of accounting and reporting, use Tagetik software to produce quarterly or annual financial statements. Another 75 people upload data into the Lawson Financials Data Mart, a multidimensional database that feeds directly into Tagetik for writing footnotes -- some quite lengthy -- for disclosure reports.
Before Tagetik went live, those 75 users sent emails to Nataupsky's team members with templates containing their numbers.
Manulife picks Tagetik over five other bids
Manulife chose Tagetik software after reviewing bids from six vendors with collaborative disclosure management tools, including IBM, WebFOCUS, Oracle, SAP and Trintech. Tagetik and IBM Clarity were the two finalists. John Hancock chose Tagetik because it was impressed with the capabilities of the software and the vendor's commitment to a collaborative relationship, Nataupsky said.
Implementation began in May 2012 and was over by February of the following year, with breaks in between.
The financial statement software gives John Hancock the time to be more strategic and to think about the reasons a number might change in a document.
"The improvements have allowed us to step back and make sure the trends in our financial statements align with our expectations. When something looks off, we can ask the question, 'Why did this change?' In the old process, we were always in a state of producing, making changes, producing and making changes. We were never able to step back and say, 'Does it look right? Does it feel right?'"
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