某咨询财务管理最佳实践财务报告(英文)6682.docx

Record to report: Leading practice processes and checklistRevised 27/09/221 Record to Reeport The Exeecutivve Boaard iss respponsibble foor thee condduct, operaationaal andd finaanciall perfformannce off an oorganiisatioon. Thhese rresponnsibillitiess are dischhargedd by:§ clearlyy statting tthe shhort aand loong teerm obbjectiives oof thee orgaanisattion;§ clearlyy statting tthe poolicy guideeliness withhin whhich tthey eexpectt manaagemennt to operaate;§ defininng thee systtem foor enssuringg thatt manaagemennt actts in accorrdancee withh the Boardds dirrectioon; annd § defininng proocedurres foor meaasurinng thee exteent too whicch proogresss towaards ccorporrate oobjecttives is beeing aachievved.1.1 The vallue off infoormatiionIn ordeer forr the Boardd to bbe ablle to functtion eeffecttivelyy, infformattion iis keyy. A BBoard whichh operrates with insuffficieent orr inacccuratte infformattion wwill bbe unaable tto monnitor the oorganiisatioon efffectivvely wwith ddecisiion maaking beingg baseed on flaweed datta. UUnder this scenaario, theree is aa signnificaant riisk thhat thhe orgganisaation will fail to meeet itts lonng terrm objjectivves.Post Ennron, Qwestt, WorrldComm etc Execuutive Boardds cannnot ffail tto apppreciaate thhat thheir rreportting iimpactts nott onlyy on tthe peerformmance and ffuturee of ttheir own oorganiisatioon, buut cappital markeets ass a whhole.High quualityy, traansparrent rreportting wwhich is baased oon rellevantt finaanciall and non-ffinanccial vvalue driveers iss crittical for ddrivinng corrporatte perrformaance aas welll resstorinng connfidennce inn the markeets. TThe fiirst sstep ttowardds achhievinng thiis is to immplemeent a frameework of maanagemment rreportting wwhich is baased oon timmely, relevvant aand acccuratte infformattion. Thiss willl enabble efffectiive deecisioon makking aas welll as meetiing thhe neeeds off exteernal stakeeholdeers. 1.2 Scope oof Reccord tto Repport The scoope off thiss papeer is the ffinanccial aand noon-finnanciaal repportinng ressponsiibilitties oof thee CFO/ FD. As ssuch iit covvers:§ Sectionn 2: Boardd/ Divvisionnal/ ccost ccentree repoortingg (aloong wiith appplicaation of Buusinesss Inttelliggence technniquess)§ Sectionn 3: Generral leedger and tthe chhart oof acccountss struucturee§ Sectionn 4: Monthh end closee and consoolidattion pprocessses§ Sectionn 5: Statuutory reporrtingThe papper dooes noot covver thhe repportinng ressponsiibilitties oof othher Opperatiional Execuutivess (eg. Salees, Loogistiics, CCRM, MMarketting, HR ettc). 2 Managemment rreportting2.1 The purrpose of maanagemment iinformmationn The purrpose of maanagemment iinformmationn is tto:§ monitorr proggress againnst coorporaate obbjectiives aand pllans§ identiffy acttions requiired wwhere actuaal perrformaance iis at variaance wwith eexpecttationnThe Boaard Reeport is a key ccomponnent iin thee manaagemennt repportinng hieerarchhy, coollatiing innformaation acrosss an organnisatiion. The BBoard Reporrt commbiness the varioous opperatiional activvitiess throough tthe coommon and oobjecttive mmediumm of ffinancce (bee it ssterliing, ddollarrs etcc). A good Boardd Repoort wiill ulltimattely ddrive decission mmakingg and actioons, aassistting tthe orrganissationn to aachievve itss shorrt-terrm andd longg termm objeectivees.As suchh the Boardd Repoort shhould proviide alll thee neceessaryy infoormatiion too suppport tthe Booard iin fullfilliing itts ressponsiibilitties. In ddoing so itt shouuld bee:§ Externaally ffocuseed - Market opporrtunitties- Threatss- Competiition§ Forwardd lookking- Drivingg visiion- Aligninng opeeratioons too straategy- Refininng strrategyy as rrequirred§ Challennging to thhe mannagemeent teeam- Drivingg perfformannce- Questiooning the sstatuss quo- Understtandinng andd manaaging riskss2.2 Managemment rreportting && operrationnal reeportiingManagemment rreportting iis a bbroad term whichh may mean diffeerent thinggs to diffeerent peoplle. IIt is, therreforee, neccessarry to underrstandd the distiinctioon bettween: § managemment rreportting aas useed by key EExecuttives and sseniorr manaagemennt. TThese reporrts arre useed to drivee deciision makinng andd meassure wwhetheer or not ccorporrate oobjecttives are bbeing met. Thiss typee of rreportting nneeds to bee saliient, relevvant, coverring bboth ffinanccial aand noon finnanciaal criiteriaa§ managemment rreportting aas useed forr day to daay opeeratioonal ppurposses. Exampples iincludde cosst cenntre rreportts, heeadcouunt annalysiis, caall ceentre perfoormancce etcc. TThese reporrts arre datta driiven aand ennable managgers tto revview ddeliveery off theiir currrent respoonsibiilitiees. TThese reporrts shhould be sttandarrd in theirr pressentattion aand deeliverred wiithin minimmal innterveentionn or ooverheead. This type of reeportiing iss desccribedd as “ooperattionall repoortingg”The foccus off thiss papeer is the EExecuttive sstyle managgementt repoortingg2.3 Design princcipless in MManageement ReporrtingIt is rrecognnised that everyy comppany wwill hhave ddifferring iinformmationn needds forr runnning tthat ccorporrationn. Ass suchh everry commpany will have diffeerent managgementt repoortingg needds. IIt is, howeever, necesssary when revieewing or deevelopping rreportt conttent tto havve in placee coree desiign prrincipples. Thesse shoould iincludde:§ deliverry of inforrmatioon whiich meeets tthe neeeds oof keyy deciision makerrs witthin tthe orrganissationn§ deliverry of timelly, reelevannt andd accuurate inforrmatioon whiich meeets tthe neeeds oof thee Busiiness as weell ass Finaance§ deliverry of inforrmatioon nott dataa, bassed onn the philoosophyy of “lless iis morre” (ssaliennt, cooncisee repoortingg of iinformmationn vs ddeliveery off signnificaant voolumess of nnumeriic andd otheer datta)§ “one veersionn of tthe trruth” whichh deliivers consiistenccy of inforrmatioon acrross tthe whhole oorganiisatioon (seee Secction 2.4 beelow)§ use of lead as weell ass lag indiccatorss (eg. for custoomer ssatisffactioon, seervicee downntime may bbe a llead iindicaator, custoomer cchurn a lagg indiicatorr)§ incorpooratioon of operaationaal KPIIs ass welll as ccore ffinanccial mmeasurres § applicaation of a balannce sccore ccard aapproaach, eensuriing coonsideeratioon is givenn to ffinanccial, operaationaal, peeople/stafff and custoomer pperspeectivees.§ applicaation of exxceptiion reeportiing teechniqques, with signiificannt varriancees beiing hiighligghted§ action orienntatedd repoortingg, in termss of ccommenntary and rrevieww§ dynamicc in nnaturee. Thhe conntent and fformatt of rreportts neeeds too be rreviewwed annd reffresheed to ensurre theey keeep pacce witth chaanges in thhe Bussinesss 2.4 Overvieew of the ccascadde of inforrmatioonThe mannagemeent reeportiing sttrateggy shoould bbe bassed onn a caascadee of iinformmationn fromm the Boardd downn (ie. fromm Boarrd to Divissions to Buusinesss Uniits annd ulttimateely coost ceentress). TThis iis reppresennted bbelow:In deliiverinng thiis casscade of innformaation it iss neceessaryy to eensuree conssistenncy off infoormatiion frrom thhe Boaard thhroughh to tthe coost ceentress. Thhis iss baseed on the pprinciiple oof “onne verrsion of thhe truuth”. It eensurees, foor exaample, thatt the resullts off Diviision X as preseented to thhe Divvisionn X MDD are the ssame aas thoose beeing rreviewwed byy the Groupp CFO. As well as coonsisttency in coontentt therre shoould aalso bbe connsisteency iin thee lookk and feel of reeportss to eensuree Execcutivees andd manaagemennt cann negootiatee themm withh easee. Definittion oof coontentt needds to be “ttop doown”. The CFO/ Boardd shouuld deefine the BBoard Reporrt conntent such that it meeets ttheir needss. Itt alsoo needds to be coonsisttent wwith ccorporrate sstrateegy annd subbsequeently used to moonitorr perfformannce annd driive buusinesss perrformaance. The needss of tthe Booard sshouldd thenn be ccascadded doown too Diviisionss, Bussinesss Unitts andd ultiimatelly cosst cenntres. Thiis enssures corpoorate strattegy iis traanslatted innto opperatiional delivvery. Thiss can be coontrassted wwith tthe “bbottomm up” conteent drriven approoach, wheree costt centtre reeportiing caascadees up to beespokee Busiiness Unit and DDivisiion reeportss. Whhen agggregaated aat thee Boarrd levvel thhis iss usuaally ccharaccterissed byy exceel connsoliddationns, siignifiicant data volummes annd thee needd to rrefer to innconsiistentt Diviision reporrts. 2.5 The usee of KKey Peerformmance Indiccatorss (KPIIs)Managemment rreportts shoould ccontaiin perrformaance iinformmationn relaating to thhe keyy operrationnal isssues as weell ass finaanciall meassures. Thiis is imporrtant as chhangess in ooperattionall meassures tend to bee leadd indiicatorrs on futurre finnanciaal perrformaance (eg. nnetworrk buiild iss behiind scchedulle ccash fflow ssavinggs in the sshort term, slowwer saales ggrowthh in tthe loonger term). The CFOO/ Boaard shhould agreee on tthe KPPIs prresentted inn the reporrt. Geenerall prinnciplees on KPIs are:-§ availabbilityy: freequenccy & aaccuraacy§ relevannce: alignnment to crriticaal succcess factoors§ acceptaance: leveel of use iin thee orgaanisattion/ indusstry§ topicall: rellevancce to speciific sstrateegic iinitiaativessWhen esstabliishingg finaanciall and operaationaal meaasuress for incluusion in maanagemment rreportts, thhis neeeds tto be done with an unndersttandinng of remunneratiion annd rewward sstructtures. Thee two need to bee conssistennt. FFailurre to do soo willl deliiver cconfliictingg messsages. It is nooted rrewardd baseed meaasuress willl havee the most powerrful iinflueence oon dayy to dday beehavioours.2.6 Examplee conttentAs noteed aboove, eeach aand veery orrganissationn willl havee theiir ownn needds andd opinnions, drivving tthe loook, ffeel aand coontentt of tthe maanagemment rreportts. AA “leaading practtice” managgementt repoort (BBoard Reporrt, Diivisioon Repport aand coost ceentre reporrt) iss giveen, hooweverr, in Appenndix 11. Thiis repport ddemonsstratees thee leadding ppractiice prrincipples hhighliightedd abovve andd is tto be used for rrefereence ppurposses onnly.In termms of conteent itt inccludess:§ Executtive ssummarry AA synoopsis of peerformmance is prrovideed by KPIs accommpanieed by approopriatte acttion oorienttated commeentaryy. Usee of ddata iis limmited to coore daata onnly§ Action plan corrrectiive acctionss speccifiedd withh conttingenncies and ssensittivityy anallysis showiing beest annd worrst caase sccenariios (usuaally iin thee formm of ccommenntary)§ Profit and LLoss sstatemment P&L accouunt shhowingg periiod annd cummulatiive poositioons wiith hiighligghted variaances againnst buudget. Any majorr variiancess shouuld bee highhlightted annd adeequateely exxplainned. TTrend analyysis sshouldd be sshown graphhicallly andd fulll yearr projjectioons shhown§ Projectted ouutturnn incoorporaated iin P&&L PProjeccted ooutturrns reecalcuulatedd eachh montth on the bbasis of acctual perfoormancce andd actiion pllans§ Cashfloow AActuall and projeected receiipts aand paaymentts up to thhe yeaar endd§ Balancee Sheeet - posittion oof worrking capittal, aassetss and long term invesstmentts / ddebt.2.7 Leadingg pracctice checkklistMajor TTopicssLeadingg pracctice charaacteriisticssIndicattive iissuess / prroblemmsGenerall prinnciplees§ Relevannt - TThe innformaation must be baased oon thee needds of all tthe deecisioon makkers (not jjust FFinancce) wiith a top ddown ffocus (fromm the Boardd downn)§ Relevannt IInformmationn pressentedd shouuld bee sharrply ffocuseed andd shouuld reeflectt the definned obbjectiives aand sttrateggy of the oorganiisatioon. § Accuratte IInformmationn shouuld bee of ssufficcientlly higgh quaality that confiidencee can be pllaced in itt. Itss reliiabiliity iss depeendentt on iits soource, inteegrityy and comprrehenssiveneess§ Timely Thee infoormatiion shhould be avvailabble prromptlly enoough tto plaan froom it and ttake ccorrecctive actioon (seee Secction 4: Moonth eend cllose)§ Integraated Repoortingg infoormatiion shhould incluude booth opperatiional and ffinanccial KKPIs wwhere the eeffectt and impacct of operaationaal perrformaance oon finnanciaal repportinng is clearrly unndersttood. Both lead and llag inndicattors aare too be uused§ Balancee scorrecardd apprroach Thee manaagemennt repport sshouldd incllude iinformmationn on tthe diiffereent asspectss of aan orgganisaation i.e. Finanncial, Custtomerss, Peoople aand Opperatiions§ Graphiccal prresenttationn - Inforrmatioon shoould bbe preesenteed in an eaasily assimmilateed forrmat ee.g. iin a cclear dashbboard formaat andd use graphhs wheere appproprriate§ One verrsion of thhe truuth - Bothh finaanciall and non ffinanccial ddata ssourcees useed acrross tthe orrganissationn are consiistentt (eg. resuults ffor Assia Paacificc as ppresennted tto Grooup CFFO aree samee as tthose preseented to Assia Paacificc MD)§ Consisttency - Thhe loook andd feell of tthe reeportss fromm Grouup too Diviision to Buusinesss Uniit to Cost Centrre neeeds too be cconsisstent§ Informaation - Thee manaagemennt repport iis infformattion rrich aand daata liight§ Exceptiion reeportiing Reporrt by excepption, highhlightting vvariannces tto plaan (booth poositivve andd negaative)§ Action orienntatedd Ennsure conteent annd commmentaary exxplainn operrationnal drriverss behiind thhe infformattion ppresennted aas welll as beingg actiion orrientaated§ Reportss are purelly finnanciaally ffocuseed witth litttle aattenttion ppaid tto peoople, custoomer, or coompetiitive measuures§ Reportiing foocusess on tthe neeeds oof nonn coree deciision makerrs (egg costt centtres mmanageers)§ Managemment rreportts aree publlishedd 15+ days folloowing the mmonth end cclose§ The forrmat oof thee repoort iss numbber orr dataa baseed witth litttle oor no use oof graaphicaal preesentaation§ Only fiinanciial KPPIs arre repportedd§ The mannagemeent reeport is viiewed as a “Finaance ttool”. It iis nott usedd by ooperattionall manaagemennt. § Signifiicant efforrt devvoted to reeconciiling Businness UUnit/ Divission/ Groupp resuults multtiple versiions oof thee trutth§ There iis litttle oor no consiistenccy bettween Groupp, Divvisionn, BUss, andd Costt cen