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TREASURY & FP&A DRIVING BETTER DECISONS
AGENDA
I. Financial Planning & Analysis Defined (FP&A)
II. Technology impact on Finance & Accoun=ng
III. Sharing Data, Crea=ng Insights
IV. Same Ruble, Different Times
V. Recap and Q&A
FINANCIAL PLANNING &
ANALYSIS (FP&A) DEFINED
The SynFiny Advisors definiCon:
ü The cri=cal value crea=on processes, which requires a deep understanding of business fluency, finance, modeling, data systems and processes, and accoun=ng.
ü This typically combines financial and non-‐financial data as required to create strategic and opera=onal financial plans.
ü When done well, these processes are a clear compe==ve advantage and thus are viewed as cri=cal by senior leaders.”
WHAT IS FINANCIAL PLANNING AND ANALYSIS?
WHICH PROCESSES ARE TYPICALLY OWNED BY FP&A?
ü Strategic Planning ü BudgeCng ü ForecasCng ü Management ReporCng
ü Financial Analysis ü Capital Planning ü Business Modeling
FINANCIAL PLANNING & ANALYSIS AS GROWTH ENGINE
Higher Growth Higher Margin Investments
CompeCCve Cost Advantage
Improved Business Decisions & Analysis
Investment in Real Time Data & VisualizaCon
Deliver Financial Strategy
via Financial Planning & Analysis
Lower Cost/Improved Service of FP&A Driven By Efficiency/ProducCvity • +6% Produc=vity • +25% lower SG&A cost
• Real =me data (2 to 5x faster cycle =mes) • Master data enables analysis
Higher Sales/Lower Cost • Sales increase of app. +~2% per year • Cost decrease of app. +~2% per year
• Faster decisions and ac=ons than compe==on • Make beZer investment decisions
TECHNOLOGY IMPACT ON FINANCE &
ACCOUNTING
A TALE OF FINANCE & ACCOUNTING SYSTEMS
COMPARING FINANCE & ACCOUNTING SYSTEMS
AREA OF WORK EARLY 90’S TODAY Closing Books
Weeks to Months Days to Weeks
Accoun=ng Systems Slow & poorly designed. Mostly locally, un-‐integrated systems
Fast & well designed. Fully integrated and standard ERP.
FP&A Systems Only excel, highly non-‐standard FP&A tools available.
Integrated w/ Bank Dial in bank sta=ons, Cashiers, and mailing documents.
Web-‐solu=ons, EFT’s, and secure e-‐communica=ons with bank.
Chart of Accounts No common chart of accounts, Accounts created for each use
Standard chart of accounts. Simplified for business facing use.
Ability to view details Only high level analysis. Unable to view details
Low level analysis. Drill into all levels of transac=ons.
SHARING DATA, CREATING INSIGHTS TREASURY AND FP&A
TREASURY & FP&A WORKING TOGETHER
Treasury Owns FP&A Owns By working together Explain impact of Fx, commodity, and infla=on by country
Financial Strategy include impact of Fx, commodi=es, and infla=on
Financial Strategy can be adjusted as new impacts available
Determining which country creates Fx exposures
Incorporate Fx exposures or impacts into sales/cost/profit
Fx driven gaps in Forecast or Budget iden=fied and closed quickly
Explain current/future interest expense or income
Incorporate interest expense or revenue into forecast
Reduce overall interest expense, Increase interest income
Insurance required for catastrophic policies
Current and future forecast of by country or region profits
Reducing overall cost of insurance
Nego=a=ng bank fees or other treasury driven transac=onal fees
Reflec=ng bank fees into the budgets
Reduce overall cost of bank or other fees
RUSSIA 1998 vs. 2014 SAME RUBLE,
SIMILAR TIMES?
DIFFERENT LEADERS, SIMILAR TIMES?
RUBLE IS FALLING FROM A STEEP CLIFF
Read more: http://www.businessinsider.com/ruble-collapse-1998-2014-12#ixzz3VgXoKTmf #
RUSSIAN INTERNATIONAL RESERVES/GDP
Sources: IMF, Russian Ministry of Finance, CFA Institute.
RUSSIAN DEBT/% OF GDP
Sources: IMF
WHAT DOES A GLOBAL COMPANY DO?
Source: CIA World Factbook
0
500
1000
1500
2000
2500
3000
1999 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
$Billion GD
P
Year by year
Russian GDP/PPP Russia has grown from the 17th largest economy in 1998 to the 6th largest in 2014.
DOES HISTORY REPEAT ITSELF?
FInance Work Pre-‐2000’s Today
Data easier to access
Limited integrated systems, Highly Manual/Inaccurate excel models
Integrated systems for accoun=ng (SAP, Oracle, Work day, etc.) or forecast (KCI, IBM, Microsop, etc.)
Organiza=ons beZer prepared
Highly decentralized, Sharing knowledge difficult
More Centralized, Ease of sharing knowledge
Data translated to insight faster
Data consolida=on took months. Actuals, Forecast, Balance Sheets.
Data consolidated in days, weeks, and some=mes hours
Analysis more thorough
Analysis was based on “old” data for decision making.
Analysis is based on “close to real =me” data for decision making
Big Data & Visualiza=on
Data highly fragmented, Difficult to see the forest through trees.
Data consolidated, Easier to visualize cause/effect, Different data can be combined
Faster reac=on =mes
Postal delivery, Phone, Fax Internet, Videoconferences, Scanning, Mobile, Social Media
NO. Russia is too big. OrganizaCons are prepared. Tools are befer.
RECAP AND Q&A
How can Treasury and FP&A work together?
ü Expect more from Finance & Accoun=ng systems
ü Big data to create insights and drive decisions ü ERP for lower level, real =me analy=cal data
ü Fx/Commodi=es modeling for P/L impacts
ü Work with IT on joint projects to improve data
ü AZend SWOAFP and AFP Na=onal Mee=ngs!!
TO RECAP
QuesCons or Comments?
Contact me directly to con/nue the discussion:
Email: [email protected]
Website: synfiny.com
Mobile: (513) 884-‐6134
