Step-by-step ongoing reporting plan – CM Web

In order to respond quickly to the rapidly changing and highly competitive markets, managers need real-time data: information on the current situation so that they can respond in a timely manner to changing circumstances, if necessary. Ongoing reporting is no longer a nice-to-have, but has become a must-have. How to get started.

E-learning: Ongoing reporting

Fast and frequent reporting is becoming the norm. By following this e-learning you can learn how to achieve this while controlling costs.

After completing this course you will be able to:

  • Provide an overview of processes, levels and associated information needs for management and supervision.
  • Perform the activities for the initial setup of ongoing reporting and the activities to be performed periodically based on a step-by-step plan.
  • To develop a dashboard to arrive at updated and effective reporting.
  • Weighing the pros and cons of ongoing reporting.

>> See the course in the catalog here.

>> Already a subscriber? Go here for e-learning in your dashboard.

In return, stakeholders also expect real-time information about what an organization is doing. It’s not so much about financial reporting, but primarily about events that determine the course and appreciation of an organization’s performance. Information that is understandable and relevant. The answer to information needs is ongoing reporting. Ongoing reporting is the reporting of financial and non-financial information on a frequent basis, but in any case shorter than one financial year, for the purpose of supporting management in managing an organization. In this sense, ongoing reporting is in line with the aforementioned increased need for transparency and integrated reporting.

Transformation

The use of automation, such as online accounting, use of SBR, portals and social media as well as standardization of the reporting process makes more frequent reporting easier. The financial statements are then ‘just’ a formality: a book to be prepared on the basis of legislation. In this fast-changing world, many organizations face the need to transform their finance teams. The focus of the finance departments’ work shifts from gathering information and producing historical accountability information to demonstrating added value for an organization’s management and stakeholders.

Factors

There are a number of factors that affect the use of management information. For example, not only internal factors such as the size and structure of the organization, vision and strategy and chosen goals and objectives, the nature of business processes and products, but also external factors such as customers, suppliers, competitors and laws. and rules, play a role. Finally, culture, management style and available technology should not be neglected either. These factors play a role in any organization, but their significance and interrelationships differ from organization to organization. This means that the management information is unique per. organization. Nevertheless, it is possible to develop a generally applicable step-by-step plan for the initial setup of ongoing reporting and the activities to be performed periodically.

These steps are explained below.

Step 1. Determining strategy and information needs

Organizations derive their right to exist from certain characteristics of unique products or services, which are therefore valued and purchased. These characteristics may also lie in aspects other than the product or service itself, such as the speed of delivery and the delivery of services. Preservation and securing of the right to exist is only possible if management remains aware of:

  • The organization’s own strengths and weaknesses;
  • The opportunities and threats from the surroundings.

Step 2. Determining the critical success factors

On the basis of these data, the Board of Directors will determine and further develop its strategy and long-term goals, because the mentioned factors develop over time and influence each other. The strategy and the long-term goals thus form the board’s choice on the development that has been identified, and thus result in a number of quality requirements for the organization’s performance as a whole. They justify the organization’s raison d’être and thus have significance for all activities and therefore also for all employees. In order to achieve sufficient focus, three to eight critical success factors will in practice be specifically identified and elaborated on at the various management levels in the organization, the organizational units and business processes. This translation results in critical success factors.

Step 3. Inventory of business processes

Depending on the types of products and services that will be offered in the strategy, coherent business processes are set up to guarantee the realization of the strategy. In general, business processes can be classified into the following categories:

  • Processes that bridge temporary differences between supply and demand for products, such as in trade and credit;
  • Processes in which goods and labor are transformed into physical products, such as in industry;
  • Processes in which capacities are made available, such as by renting people, equipment or space;
  • Processes where risk is managed, such as by insurance companies.

This classification forms the basis of important periodic administrative information based on process characteristics and also involves important risks. If they are not assessed, evaluated and adjusted if necessary, they almost always cause losses to the organization. For an organization, the loss of a dominant business process almost always means that its very existence is threatened.

Management will be made integrally responsible for the input, processing and output of a particular business process. This has the advantage that the information about it also gives a picture of the management’s performance. In practice, however, it will not always work, at least not in larger companies, because other interests play a role.

Step 4. Confrontation of critical success factors with business processes

The confrontation between critical success factors and the business process provides a picture that challenges one to think about the extent to which the relevant sub-processes contribute to influencing them positively. This impact can be significant, but also supportive or complementary. In fact, it is inconceivable that a process does not yield anything at all. However, the effect or influence can be poor or hardly measurable or difficult to attribute to a specific product / market combination. The administrative activities carried out to coordinate the activities of the sub-processes naturally have a great influence. In this functionally structured organization, the management naturally takes on this coordinating role, which is supported by making use of the information elements and KPIs derived here.

Step 5. Mapping of the associated KPIs

To ultimately compile a meaningful set of KPIs, the following four steps must be taken:

  1. naming the KPIs;
  2. Determination of target values;
  3. Connection of the information system;
  4. Running a test.

Step 6. Setting up ongoing reporting

After the KPIs have been defined, ongoing reporting can be set up where the KPIs occupy a prominent place.

To combine data from different processes and different source systems and to enrich them with external information, it is best to find a business intelligence solution. The data is collected in a data warehouse and presented via the right tools. In this way, more than just financial data can be displayed and visualized in a way that provides the desired insight into the processes. The report can then be tailored to the target group, and the desired information is provided at all organizational levels.

Step 7. Evaluate and improve the process

The previous steps are evaluated at regular intervals. Organizational goals can change over time. Questions that can be asked are:

  • For example, are KPIs still in line with the organization’s goals?
  • Is the timeliness and quality of the data still sufficient?
  • What improvements in the process are possible?

On the basis of the research, a number of activities can be set up that must always be carried out in ongoing reporting.

  • Are there any changes to the questions from the initial setup of the interim reporting?
  • Coherence between the financial administration and the interim report?
  • Is the information inaccurate, incomplete or otherwise unsatisfactory?

If so, the ongoing reporting process will be improved.

Dashboards

As soon as the message that the finance profession wants to convey through the report is clear, the layout of a report determines whether the message actually reaches a leader. Knowing how our brain works is no superfluous luxury. Most reports contain all kinds of visual barriers that prevent the brain from capturing the right message.

To this end, the importance of using dashboards to achieve effective reporting has been emphasized. A dashboard is a form of graphical user interface that often provides a quick overview of key performance indicators relevant to a particular goal or business process. Figure 1 shows a clear economic dashboard from King as an example.

Figure 1. Example of a dashboard; Retrieved from https://www.king.eu

Evaluation

The biggest advantage of ongoing reporting is that ongoing reporting meets an organization’s need to be able to adapt more quickly. The constant and rapid series of changes means that organizations need to adapt faster and faster. They have an increasing need for reliable ‘real-time’ financial and financial

non-financial information. In addition, the ongoing digitization makes it possible to provide reliable information more often and faster after the end of a period. The continuous collection of data creates more insight into the results and the underlying causes. This means that the organization can be adapted better and, above all, faster. If information is provided to stakeholders, more frequent reports can also gain the trust of this group.

The content and frequency of ongoing reporting must match the organization’s objectives at the strategic, tactical and operational levels and encourage targeted and positive action. The content and frequency depend on the speed at which the user wants to transmit.

But there are also some drawbacks. Ongoing reporting can be time consuming and expensive. Ongoing reporting can also promote short-term thinking, which can reduce focus on long-term strategy. If operational information is provided on an ongoing basis, insight into strategic information may be underexposed.

Author: Drs. RM Kieft RA, independently established under the name Bureau for Administration and Control Kieft (BACK) BV

Learning environment Finance Academy E-learning provides courses on a wide range of topics that are important to controllers, such as this e-learning about the data-driven organization. With the platform, you can achieve your learning goals and gain knowledge to be equipped for the future according to the new Continuing Education Guide. Get to know us now and take advantage of a 10 percent discount on a subscription. You can also try a free e-learning without any obligation to get to know the area.

Finansakademiet

Follow CMWeb on LinkedIn!

Leave a Comment