EPM as Fidget Spinner of Finance
One of the toughest ask for any CFO is in ensuring all the reporting needs both internal and external are all aligned and reconciled. Though on the outset, it looks easy, it is probably one of the toughest as the 3 common views of any data from Finance i.e. Management, Statutory & Board/Investor views are constantly evolving. It is like a moving target and there are a number of factors that drive this right from Regulatory change, Management Change, Executive Change or even change to board/investors.
The good and bad about Finance is any data has a context and a view point. For example, Gross Margin. What GAAP looks at as Gross Margin might be completely different from how Management looks at. And add to the complexity, if you are located in multiple countries then each countries GAAP accounting could have different interpretations of Gross Margin.
Though ideally both should be the same, its possible that how GAAP views Gross Margin might have multiple interpretations in Management (or multiple breakups as needed). And it is even more true when you consider over a period of time – for example, it is possible that some items that were not relevant to run the business during the initial stages of the company might become relevant in the later stages. So the time factor is even more critical.
It is sort of like a Fidget Spinner. Where the fundamentals of Finance do not change, but the needs of how we look at the data and report on – GAAP, Management and Board/Investor View will continue to evolve and move. To cater to these ever changing needs, we cant change our Financial ERP every time. Instead, we need solid Enterprise Performance Foundation platforms that can help companies make the Fidget Spinner move and rotate.
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