Process Improvement for Effective Budgeting and Financial Reporting

Nils H. Rasmussen, Christopher J. Eichorn, Corey S. Barak, Toby Prince047128114X, 9780471281146, 9780471455073

“The budget and financial reporting processes are well known sources of frustration for most CFOs. Seeking a quick fix to the problem, the common solution is to pour more money into new and better software. This leaves the root cause, the inefficient and dysfunctional underlying processes and routines, unaddressed. As this book shows, substantial and sustainable improvements are only achieved through an holistic approach to process improvement, technology, strategy, and people.-Tom Henry Knudsen, Executive Vice President, Telenor Eiendom Fornebu AS, Proven methods for improving efficiency Corporations face a high turnover among financial managers, rapid changes in technology, lack of time and process redesign skills, and ongoing ambiguity about primary objectives behind the budgeting and financial reporting processes. Amid this frenzy, it is the fundamental efficiency of these processes that dramatically impact overall business performance. Process Improvement for Effective Budgeting and Financial Reporting provides financial managers with a compelling blueprint for increasing efficiency and eliminating waste of time and energy. Four operational experts lay out an 80/20 plan-improving 800f processes in 200f the time it would take to improve 100%-and explain a Business Process Improvement (BPI) plan that incorporates: * The emerging trends affecting financial managers today * Step-by-step process implementation * Interviews with industry leaders, consultants, and managers who have successfully instituted BPI plans * Appraisals of the available software that can help or hinder the process There is no substitute for improvedefficiency. CFOs, controllers, budget managers, and financial analysts will significantly benefit from adding this authoritative guide to their professional libraries.

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Table of contents :
PROCESS
IMPROVEMENT FOR
EFFECTIVE BUDGETING
AND FINANCIAL
REPORTING……Page 5
Copyright……Page 6
CONTENTS……Page 7
PREFACE……Page 13
Part One Introduction to Business Process Improvement……Page 17
INTRODUCTION……Page 19
POSITIVE EFFECTS OF BPI……Page 20
PHASES OF A BPI PROJECT……Page 21
CORE BUDGETING AND REPORTING PROCESSES……Page 23
CLOSING REMARKS……Page 24
PRECONDITIONS FOR BPI……Page 26
WHAT BPI CAN DO FOR A COMPANY……Page 30
BPI OVERVIEW……Page 32
3 Small and Large Projects and Associated Resources……Page 34
4 Return on Investment of BPI Projects……Page 37
TECHNOLOGY TRENDS……Page 39
ANALYTICS AND BALANCED SCORECARDS……Page 57
IMPACT OF THE INTERNET……Page 59
6 Selling Change to Your Organization……Page 65
HOW TO SELL A BPI PROJECT……Page 67
Part Two Business Process Improvement Project……Page 69
BUDGETING AND REPORTING OVERVIEW: SO YOU WANT PERFECT ANALYTICS PROCESSES?……Page 71
PREPARING FOR THE BPI PROJECT……Page 72
USING DIAGRAMS TO VISUALIZE PROCESSES……Page 79
8 Due Diligence……Page 85
COMPANY VALUES……Page 87
RISKS……Page 88
STRENGTHS AND WEAKNESSES……Page 89
9 Improving the Budgeting Process……Page 92
ESTABLISH A TIMELINE……Page 93
IMPROVE DATA ENTRY……Page 94
REPORT ON BUDGETS……Page 95
ENFORCE ACCOUNTABILITY……Page 99
SUPPORT ENABLERS……Page 107
OBJECTIVES……Page 113
DRIVERS……Page 114
TOP- DOWN OR BOTTOM- UP BUDGETING APPROACH……Page 115
ASSUMPTIONS……Page 116
USERS……Page 117
BEST PRACTICES……Page 119
CUSTOMER NEEDS……Page 120
DRIVERS……Page 121
SPECIAL CONSIDERATIONS……Page 122
USERS……Page 123
BEST PRACTICES……Page 124
OBJECTIVES……Page 127
DIMENSIONS AND CHART OF ACCOUNT CONSIDERATIONS……Page 128
DRIVERS……Page 129
SPECIAL CONSIDERATIONS……Page 130
BEST PRACTICES……Page 131
CUSTOMER NEEDS……Page 135
DRIVERS……Page 136
SPECIAL CONSIDERATIONS……Page 137
BEST PRACTICES……Page 138
OBJECTIVES……Page 142
DRIVERS……Page 143
ASSUMPTIONS……Page 144
USERS……Page 145
BEST PRACTICES……Page 146
ZERO- BASED BUDGETING……Page 149
ACTIVITY- BASED BUDGETING……Page 150
BALANCED SCORECARD……Page 151
BEYOND BUDGETING ROUND TABLE……Page 152
ETHICAL CONCERNS……Page 153
FINANCIAL REPORTING AS A BUSINESS PROCESS……Page 155
WHAT¡¯S WRONG WITH THIS PICTURE?……Page 156
LOOKING FOR IMPROVEMENT OPPORTUNITIES……Page 158
EVALUATING REPORTING PROCESS ENABLERS……Page 161
HUMAN RESOURCES……Page 164
TRAINING……Page 166
STRATEGY……Page 167
WORKFLOW……Page 172
CLOSING……Page 174
REPORTING……Page 176
ANALYTICS APPLICATIONS AND THE FINANCIAL DATA WAREHOUSE……Page 183
EXTRACT, TRANSFORM, AND LOAD: COMBINING DATA FROM DIVERSE SYSTEMS……Page 186
USING XBRL FOR EXTERNAL REPORTING……Page 190
INTRANETS, EXTRANETS, AND BROWSERS: USING THE WEB TO DISTRIBUTE OPERATING AND FINANCIAL DATA……Page 191
20 BPI Makeover……Page 193
SUMMARY……Page 194
Part Three Designing the Ultimate Chart of Accounts……Page 197
PURPOSE……Page 199
WHEN TO REDESIGN……Page 200
GENERAL DESIGN CONSIDERATIONS……Page 202
SEGMENT AND VALUE CONSIDERATIONS……Page 205
DESIGN FACTORS……Page 206
OTHER CONSIDERATIONS……Page 210
FEATURES OF A BASIC CHART OF ACCOUNTS……Page 211
IDEAL NUMBER AND USE OF SEGMENTS……Page 213
IDEAL LENGTH OF SEGMENTS……Page 214
23 COA Development Plan……Page 216
DEVELOPMENT PROCESS……Page 217
INTERNATIONAL CONSIDERATIONS……Page 221
SAMPLE COA PROJECT PLAN……Page 222
RECOMMENDATIONS AND OTHER CONSIDERATIONS……Page 223
SUMMARY……Page 224
Part Four Interviews……Page 225
24 Robert Blake, Microsoft Corporation……Page 227
25 Dean Sorensen, Bywater Management Consulting……Page 229
26 Bill Ellenback, Software User……Page 233
Part Five Software Tools and Resources……Page 239
DEVISE A PLAN……Page 241
USING A SOFTWARE SELECTION COMPANY……Page 247
CURRENT AND FUTURE USE REQUIREMENTS……Page 249
WINNING COMPANY BUY- IN……Page 250
COST/ BENEFIT ANALYSIS……Page 251
RETURN ON INVESTMENT ANALYSIS FOR NEW SOFTWARE……Page 252
FEATURES AND FLEXIBILITY……Page 253
COMPATIBILITY WITH EXISTING SOFTWARE……Page 254
EASE OF USE……Page 255
VENDOR- RELATED ITEMS……Page 256
HOW TO SELECT: SUMMARY……Page 257
QUERY AND REPORTING SYSTEMS……Page 258
DECISION SUPPORT SYSTEMS……Page 260
BUDGETING AND PLANNING SOLUTIONS……Page 261
ENTERPRISE INFORMATION PORTALS……Page 262
DATA WAREHOUSE SOFTWARE……Page 263
ETL SOFTWARE VENDORS……Page 264
E- LEARNING SOFTWARE VENDORS……Page 265
Appendix A Sample Confidentiality and Nondisclosure Agreement
(Sales/Demo Process)……Page 267
Appendix B Sample Consulting Agreement……Page 271
Appendix C Software Vendor Listing……Page 275
Appendix D Sample Chart of Accounts……Page 282
GLOSSARY……Page 289
INDEX……Page 297