财务报告相关资料(英文版)

1 Record to Report The Executive Board is responsible for the conduct, operational and financial performance of an organisation. These responsibilities are discharged by: clearly stating the short and long term objectives of the organisation; clearly stating the policy guidelines within which they expect management to operate; defining the system for ensuring that management acts in accordance with the Boards direction; and defining procedures for measuring the extent to which progress towards corporate objectives is being achieved.1.1 The value of informationIn order for the Board to be able to function effectively, information is key. A Board which operates with insufficient or inaccurate information will be unable to monitor the organisation effectively with decision making being based on flawed data. Under this scenario, there is a significant risk that the organisation will fail to meet its long term objectives.Post Enron, Qwest, WorldCom etc Executive Boards cannot fail to appreciate that their reporting impacts not only on the performance and future of their own organisation, but capital markets as a whole.High quality, transparent reporting which is based on relevant financial and non-financial value drivers is critical for driving corporate performance as well restoring confidence in the markets. The first step towards achieving this is to implement a framework of management reporting which is based on timely, relevant and accurate information. This will enable effective decision making as well as meeting the needs of external stakeholders. 1.2 Scope of Record to Report The scope of this paper is the financial and non-financial reporting responsibilities of the CFO/ FD. As such it covers: Section 2: Board/ Divisional/ cost centre reporting (along with application of Business Intelligence techniques) Section 3: General ledger and the chart of accounts structure Section 4: Month end close and consolidation processes Section 5: Statutory reportingThe paper does not cover the reporting responsibilities of other Operational Executives (eg. Sales, Logistics, CRM, Marketing, HR etc). 2 Management reporting2.1 The purpose of management information The purpose of management information is to: monitor progress against corporate objectives and plans identify actions required where actual performance is at variance with expectationThe Board Report is a key component in the management reporting hierarchy, collating information across an organisation. The Board Report combines the various operational activities through the common and objective medium of finance (be it sterling, dollars etc). A good Board Report will ultimately drive decision making and actions, assisting the organisation to achieve its short-term and long term objectives.As such the Board Report should provide all the necessary information to support the Board in fulfilling its responsibilities. In doing so it should be: Externally focused - Market opportunities- Threats- Competition Forward looking- Driving vision- Aligning operations to strategy- Refining strategy as required Challenging to the management team- Driving performance- Questioning the status quo- Understanding and managing risks2.2 Management reporting & operational reportingManagement reporting is a broad term which may mean different things to different people. It is, therefore, necessary to understand the distinction between: management reporting as used by key Executives and senior management. These reports are used to drive decision making and measure whether or not corporate objectives are being met. This type of reporting needs to be salient, relevant, covering both financial and non financial criteria management reporting as used for day to day operational purposes. Examples include cost centre reports, headcount analysis, call centre performance etc. These reports are data driven and enable managers to review delivery of their current responsibilities. These reports should be standard in their presentation and delivered within minimal intervention or overhead. This type of reporting is described as “operational reporting”The focus of this paper is the Executive style management reporting2.3 Design principles in Management ReportingIt is recognised that every company will have differing information needs for running that corporation. As such every company will have different management reporting needs. It is, however, necessary when reviewing or developing report content to have in place core design principles. These should include: delivery of information which meets the needs of key decision makers within the organisation delivery of timely, relevant and accurate information which meets the needs of the Business as well as Finance delivery of information not data, based on the philosophy of “less is more” (salient, concise reporting of information vs delivery of significant volumes of numeric and other data) “one version of the truth” which delivers consistency of information across the whole organisation (see Section Error! Reference source not found. below) use of lead as well as lag indicators (eg. for customer satisfaction, service downtime may be a lead indicator, customer churn a lag indicator) incorporation of operational KPIs as well as core financial measures application of a balance score card approach, ensuring consideration is given to financial, operational, people/staff and customer perspectives. application of exception reporting techniques, with significant variances being highlighted action orientated reporting, in terms of commentary and review dynamic in nature. The content and format of reports needs to be reviewed and refreshed to ensure they keep pace with changes in the Business 2.4 Overview of the cascade of informationThe management reporting strategy should be based on a cascade of information from the Board down (ie. from Board to Divisions to Business Units and ultimately cost centres). This is represented below:In delivering this cascade of information it is necessary to ensure consistency of information from the Board through to the cost centres. This is based on the principle of “one version of the truth”. It ensures, for example, that the results of Division X as presented to the Division X MD are the same as those being reviewed by the Group CFO. As well as consistency in content there should also be consistency in the look and feel of reports to ensure Executives and management can negotiate them with ease. Definition of content needs to be “top down”. The CFO/ Board should define the Board Report content such that it meets their needs. It also needs to be consistent with corporate strategy and subsequently used to monitor performance and drive business performance. The needs of the Board should then be cascaded down to Divisions, Business Units and ultimately cost centres. This ensures corporate strategy is translated into operational delivery. This can be contrasted with the “bottom up” content driven approach, where cost centre reporting cascades up to bespoke Business Unit and Division reports. When aggregated at the Board level this is usually characterised by excel consolidations, significant data volumes and the need to refer to inconsistent Division reports. 2.5 The use of Key Performance Indicators (KPIs)Management reports should contain performance information relating to the key operational issues as well as financial measures. This is important as changes in operational measures tend to be lead indicators on future financial performance (eg. network build is behind schedule cash flow savings in the short term, slower sales growth in the longer term). The CFO/ Board should agree on the KPIs presented in the report. General principles on KPIs are:- availability: frequency & accuracy relevance: alignment to critical success factors acceptance: level of use in the organisation/ industry topical: relevance to specific strategic initiativesWhen establishing financial and operational measures for inclusion in management reports, this needs to be done with an understanding of remuneration and reward structures. The two need to be consistent. Failure to do so will deliver conflicting messages. It is noted reward based measures will have the most powerful influence on day to day behaviours.2.6 Example contentAs noted above, each and very organisation will have their own needs and opinions, driving the look, feel and content of the management reports. A “leading practice” management report (Board Report, Division Report and cost centre report) is given, however, in Appendix 1. This report demonstrates the leading practice principles highlighted above and is to be used for reference purposes only.In terms of content it includes: Executive summary A synopsis of performance is provided by KPIs accompanied by appropriate action orientated commentary. Use of data is limited to core data only Action plan corrective actions specified with contingencies and sensitivity analysis showing best and worst case scenarios (usually in the form of commentary) Profit and Loss statement P&L account showing period and cumulative positions with highlighted variances against budget. Any major variances should be highlighted and adequately explained. Trend analysis should be shown graphically and full year projections shown Projected outturn incorporated in P&L Projected outturns recalculated each month on the basis of actual performance and action plans Cashflow Actual and projected receipts and payments up to the year end Balance Sheet - position of working capital, assets and long term investments / debt.2.7 Leading practice checklistMajor TopicsLeading practice characteristicsIndicative issues / problemsGeneral principles Relevant - The information must be based on the needs of all the decision makers (not just Finance) with a top down focus (from the Board down) Relevant Information presented should be sharply focused and should reflect the defined objectives and strategy of the organisation. Accurate Information should be of sufficiently high quality that confidence can be placed in it. Its reliability is dependent on its source, integrity and comprehensiveness Timely The information should be available promptly enough to plan from it and take corrective action (see Section Error! Reference source not found.: Month end close) Integrated Reporting information should include both operational and financial KPIs where the effect and impact of operational performance on financial reporting is clearly understood. Both lead and lag indicators are to be used Balance scorecard approach The management report should include information on the different aspects of an organisation i.e. Financial, Customers, People and Operations Graphical presentation - Information should be presented in an easily assimilated format e.g. in a clear dashboard format and use graphs where appropriate One version of the truth - Both financial and non financial data sources used across the organisation are consistent (eg. results for Asia Pacific as presented to Group CFO are same as those presented to Asia Pacific MD) Consistency - The look and feel of the reports from Group to Division to Business Unit to Cost Centre needs to be consistent Information - The management report is information rich and data light Exception reporting Report by exception, highlighting variances to plan (both positive and negative) Action orientated Ensure content and commentary explain operational drivers behind the information presented as well as being action orientated Reports are purely financially focused with little attention paid to people, customer, or competitive measures Reporting focuses on the needs of non core decision makers (eg cost centres managers) Management reports are published 15+ days following the month end close The format of the report is number or data based with little or no use of graphical presentation Only financial KPIs are reported The management report is viewed as a “Finance tool”. It is not used by operational management. Significant effort devoted to reconciling Business Unit/ Division/ Group results multiple versions of the truth There is little or no consistency between Group, Division, BUs, and Cost centre reports Reporting delivers too much detail and data i.e. it is 30 pages or morePeople Operational Executives have a key influence/ input in defining reporting content and format. The reporting framework needs to meet their needs as well as those of the Finance function Macro management: Ability and willingness to focus on the “big picture” Dedicated management reporting team responsible for accuracy, timeliness and content of the reporting framework. Ideally this would cover both financial and operational information needs, as supported by a management information strategy. This provides ownership and accountability for management information across the organisation There is consistency between the reporting KPIs and those used by HR / bonus assessed measures (the latter will drive behaviour not the former) Commentary is salient and commercial (i.e. not a repeat of the numbers) and focuses on the drivers of results. Finance work closely with operational managers to understand results and jointly prepare commentary Management reporting is delivered by Finance for Finance and is not used by the rest of the Business Micro management: Focus on detail and immaterial figures and adjustments Reward based measures differ from reported KPIs Accountability and ownership of management information is dispersed across the organisation Commentary provided does not add any insight into decision support (eg. “sales are down 5%”)Process The level of detail and frequency of reporting suits the maturity of the business. (i.e. mature can manage with more detail less frequently, immature/ changing environment manage with key measures more frequently) Core management information/ flash results are available to the Business Working Day 5 post month end (see Section Error! Reference source not found.: Month end close) There is limited to no data manipulation prior to finalising the figures and amendments are made monthly in arrears (see Section Error! Reference source not found.: Month end close) Processes are in place to assess the competitive environment Use of graphical and exception based reporting to increase the ease of interpretation Data sources for operational KPIs are validated and tested for accuracy, timeliness and relevance Reporting is at the lowest level of detail and is data intense Numerous manual adjustments prior to finalising reports Re-keying of data to generate reports Reports are published 15+ days following month end close Immaterial adjustments are allowed to be posted during month end inhibiting the ability to report in a timely manner to key decision makers Operational KPIs and data sources are inconsistent across the business and time consuming to collate Technology Report production is automated from a single database and includes automated data checks and validation (refer to Appendix 2 for outline technical architecture) Re-keying and other manual intervention is rarely needed for data gathering The database is used for analysis and queries, not the General Ledger Standard procedures are in place for evaluating requests for new information and for deciding whether it should be collected routinely in future Reporting systems are linked to allow drill-down to appropriate levels of detail (see Section Error! Reference source not found.: Business Intelligence) Reporting systems allow slice and dice capability (see Section Error! Reference source not found.: Business Intelligence) Web based reporting to access real-time information (see Section Error! Reference source not found.: Business Intelligence). It is recognised, however, that real time reporting is not realistic in some organisations where data capture is “lumpy” (eg. billing data in telcos) Tools are available to managers and employees which allow them to model their decisions to maximise their effect on achievement of the corporate objective Enhanced query tools, relational OLAP tools, and multidimensional databases utilised to enhance analysis and deliver information in a flexible manner Data is held in several different databases Manual intervention and re-keying is necessary to produce the management reports The General Ledger is used as an analysis tool Exception based reporting is not used Little or no flexibility in presentation of information with format being defined by finance Information is delivered in hard copy format without the ability to slice and dice information2.8 Management reporting process overviewManagement reporting - detailed process: production of management reports3 General ledger and chart of accounts3.1 Purpose of the General LedgerThe General Ledger is used capture financial data at transactional level with standard accounts in a standard record structure that accommodates multidimensional reporting.The general ledger should allow for the following; Consistent and accurate classification of accounting data Ease of transfer of financial data throughout the company Clear flow of financial data from source systems through multiple levels of consolidation Latitude for additional data elements3.2 Chart of accountsThe core structure underlying the general ledger is contained in