Finance management

Finance is the traditional area of performance management. Financial controlling in companies always requires the best reporting, analytical, and planning capabilities. Today’s solutions support traditional activities and bring a new level of efficiency and performance. Controllers, analytics, and managers can now focus on solving context-related questions and the interpretation of past and future results, rather than predominantly data preparation.

Financial performance management

Typical areas which can be supported by performance management solutions

• Financial reporting with automation of statutory statements and integration to transaction level details
• Multi-dimensional analysis of operational expenditures (OPEX), capital expenditures (CAPEX), and balance sheet movements
• Analysis of customer receivables integrated with interpretation of payment discipline and calculation of bad debt provisions
• Management of cash flow including liquidity planning
• Financial planning, forecasting and modelling
• Financial consolidation

Managerial Profit and Loss Statement (P&L)

Apart from traditional financial reporting, managerial reports can introduce a new level of performance management focus. The main characteristics are

• Systematic combination of financial data with non-financial KPIs which drive the financial results. For example, sales volumes are shown above revenues, the number of employees is in addition to personnel costs, or turnover period explains the value of inventories.
• Contribution margin calculation is incorporated in the statement as a separate data category
• Reported items are ordered in rows from the top as sales and revenue categories through selling and variable costs, and then running costs down to operational profit and non-operational income or expense categories.
• Columns are split into four areas where in the first indicates “current month” results, the second shows “year-to-date”, the fourth reports the “whole year” period, and the remaining third calculates the remaining as the “year-to-go”.
• Good managerial report explains what happened in the previous month, indicates current trends, and focuses on the “year-to-go” period by indicating how realistic the outlook is and which measures could deliver the desired results.

Driver based gap analyses

By proper usage of multi-dimensional analysis and planning, the progressive driver based gap analysis can be implemented. The main features are the following

• Impact of driver quantity and unit value (e.g. price) on main business categories and P&L items evaluated
• Provides on-going explanations of why the main components of results/plans are deviating and the driving factors thereof.
• Can indicate gaps between actual results and the plan, as well as forecasting updates against previous estimates, etc.
• Can be implemented as part of managerial reports

Additional functions

Modern performance management tools can also support additional needs

• Customized user reports made by business users directly from multidimensional analysis or existing metadata
• Commentary & explanations of reported statements by the responsible managers
• Systematic or ad hoc data collection from distant affiliates over web forms generated by planning solutions
• Automated event-based notification for controllers/managers when monitored item reaches predefined threshold

Should you require further information or a free assessment and solution concept contact us.