A study showed that organisations with high bonus payouts performed much better financially than those who did not pay high bonuses. This is why incentives can be seen as a financial tool to drive better performance.
Developing predictive models, forecasts and scenarios to assess risk and assist decision making is one of a finance department’s most important activities. If finance managers neglect this activity, the company may encounter serious problems.
Two years ago, the company moved away from our annual budget and monthly variance reports, and adopted quarterly rolling forecasts supported by key performance indicators and scorecards. Is this approach useful to a line manager?
One day in November, a worried operations manager for a transport company was preparing for a meeting with the group’s financial director. He’d been ordered to explain the overspending on his region’s fuel account for the first 10 months of the financial year. The variance was huge and the MD had hit the roof! There were many reasons for the variance.
Over the years I’ve learnt a few things about implementing performance measurement systems in practice. These suggestions apply equally whether we are talking about key performance indicators, scorecards or dashboards.
Today’s FP&A practitioners are highly trained professionals with a greater ability to see the big picture, analyse and interpret data, and build predictive models. They are also experts in harnessing the power of information technology. They are able to create detailed cost and revenue databases that unlock patterns and trends in business behaviour and to build sophisticated and responsive forecasting models. We do rolling forecasts because we know they are better and because we can.
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A study showed that organisations with high bonus payouts performed much better financially than those who did not pay high bonuses. This is why incentives can be seen as a financial tool to drive better performance.
Developing predictive models, forecasts and scenarios to assess risk and assist decision making is one of a finance department’s most important activities. If finance managers neglect this activity, the company may encounter serious problems.
Two years ago, the company moved away from our annual budget and monthly variance reports, and adopted quarterly rolling forecasts supported by key performance indicators and scorecards. Is this approach useful to a line manager?
One day in November, a worried operations manager for a transport company was preparing for a meeting with the group’s financial director. He’d been ordered to explain the overspending on his region’s fuel account for the first 10 months of the financial year. The variance was huge and the MD had hit the roof! There were many reasons for the variance.