prevero Blog

A line manager’s perspective on budgets and rolling forecasts

Thursday, 04 October 2018

A line manager’s perspective on budgets and rolling forecasts

Heinrich doesn’t have time for non-value-adding activities. An engineer with an MBA, he’s the general manager of a factory that makes packaging for the food industry. His five customers are exacting to say the least. The product quality must always be perfect, with the right quantity delivered to the right place at the right time with the right paperwork. It’s not surprising that Heinrich’s favourite maxim is “you can’t manage it if you don’t measure it.”

Written by John Stretch

The building blocks of a management system

Tuesday, 25 September 2018

The building blocks of a management system

The iceberg is a useful metaphor for a management system. Below the waterline is an invisible or partly understood process of planning, budgeting, forecasting and reporting which supports the financial result – the visible outcome – comprising only 10 % of the iceberg. In big groups the management system is complex and pervasive and may only be understood after an employee has been with the organisation for some years.

Written by John Stretch

Understanding value is a calculated business!

Thursday, 20 September 2018

Understanding value is a calculated business!

There are different financial indicators to monitor the financial results of a company. Focussing on ‘value creation’ is sometimes considered ‘rocket science’ for the local management team. However, by explaining the steps of calculating ‘value’, management will quickly see what is meant by it and how they create it.

Written by Richard E. Reinderhoff

Breakpoints in Forecasting

Thursday, 20 September 2018

Breakpoints in Forecasting

Sometimes, what you forecast needs to change dramatically, due to e.g. market disruption or internal changes. You also might not monitor every business the same way, because each might be in different development stage or ´situation´. By looking at the company itself, but also possible (management) crises, you can determine what the focus of the forecast should be.

Written by Richard E. Reinderhoff

Going Local, and Winning Support using KPI’s

Tuesday, 18 September 2018

Going Local, and Winning Support using KPI’s

Working at a local business unit often doesn’t give you the access to sophisticated corporate systems to monitor performance. However, as a financial you are quickly immersed into daily operations, learning how things really work. A sample will be given of key indicators used to improve the cash forecast and position of a business unit.

Written by Richard E. Reinderhoff

Risks: How to make Risk Appetite visible?

Thursday, 13 September 2018

Risks: How to make Risk Appetite visible?

At a corporate level, risks can be very well mapped and controlled using e.g. the COSO framework. Defining the risks is often source driven. This means: the source of the risk is identified leading to the impact being measured by the possibility of occurrence (chance) and the size of its impact on the P&L (money). How much appetite for risk does the company have to achieve its goals?

Written by Richard E. Reinderhoff

How much bias is in your forecast?

Tuesday, 11 September 2018

How much bias is in your forecast?

Being critical of one’s own work, is even more important for the financial doing the forecast. A forecaster will undoubtedly have his or her bias and blind spots. However, some can be avoided by looking at the forecast itself, and some by looking at person doing the forecast. The aim here is to create deeper awareness of ‘forecasting’ by presenting some structural elements.

Written by Richard E. Reinderhoff

Capital Allocation & Internal Funding

Thursday, 06 September 2018

Capital Allocation & Internal Funding

The most important decision for top management is where the money goes. Capital allocation not only defines the money flow, but also who will be spending it. Since many companies are threatened by disruption, intrapreneurship is now more important than ever. FP&A specialists can hold a key-position, when it comes to facilitate the process of capital allocation.

Written by Richard E. Reinderhoff

How to improve the Long-Range Forecast

Tuesday, 04 September 2018

How to improve the Long-Range Forecast

The strength of those working in FP&A often comes when they worked in different industries or with BU’s from different countries. They learned a little bit more about the impact management can have on the numbers under different circumstances. To develop a long-range forecast, financials need to look beyond current events and steer away from business plans based on extrapolation.

Written by Richard E. Reinderhoff

Talking to Marketing… about spend!

Thursday, 30 August 2018

Talking to Marketing… about spend!

For most marketing managers doing the annual budget is a bore or waste of time. With most transactional services outsourced and financial management centralised in the home country of the company, local financials spend more and more time with planning, budgeting and forecasting. It’s the opportunity for financials to start business partnering with marketing managers and senior management. The following two tricks have been tested and proven valuable for both the financials, marketeers and executive management, when business partnering got introduced.

Written by Richard E. Reinderhoff

Rolling forecast – a small step towards the future

Tuesday, 21 August 2018

Rolling forecast – a small step towards the future

We often hear organisations hail the move from traditional annual budgeting to rolling forecast as a great improvement. However what makes rolling forecast great? Is rolling forecast the answer to ease the pain of budgeting? This article explores what rolling forecast is, it’s pros and cons, some best practice times and if rolling forecast can ease the pain of budgeting?

Written by Simone da Silva Collins

Building the FP&A brand

Thursday, 16 August 2018

Building the FP&A brand

The role of FP&A is becoming more important than ever. FP&A is seen as instrumental in helping organisation formulate strategy and drive performance. However, how does FP&A function go about building its brand?

Written by Simone da Silva Collins

KPI – friend or foe?

Tuesday, 14 August 2018

KPI – friend or foe?

When we talk about performance measurement, KPIs is a common tool.  It can be a financial measure or an operational measure. However, in recent years, KPIs seem to have fallen out of favour because it fails as a useful indicator of business performance. Consumers, investors and stakeholders are interested in other measures which show the organisation is fulfilling its responsibility as a good corporate citizen. Should we abandon KPI? I believe KPI is still a useful tool but we must take good care when choosing and designing KPIs so as not to fall foul of unintended consequence.  This article looks at the importance of designing and defining appropriate KPIs in performance measurement.

Written by Simone da Silva Collins

Generalist or Specialist

Tuesday, 14 August 2018

Generalist or Specialist

FP&A professionals are often introduced as subject matter expert. Does this means FP&A is a specialist? In this brief article, I hope to explore the role of FP&A and attempt to answer the question “Is FP&A a generalist or a specialist?”

Written by Simone da Silva Collins