Finance and Business Analytics
Reporting and Analytics has always been a key deliverable by the Finance team. This is an area where a significant amount of time is spent in a monthly process of downloading data from different sources, creating macros for countless excel files and “cutting and pasting” data into email updates or a powerpoint presentation. Traditionally, reports have been static where management team will need to “wait” for a financial management information pack to be sent across on a monthly basis.
One of the biggest enhancement provided by technology is allowing the reports to be dynamic and instantaneous, leading to faster decision making and supported by transparent data.
Key Insights from Finance and Business Analytics
There are 3 main objectives in preparing the relevant reports:
A. Finance Shared Services Operational Performance
For Captive Finance Shared Services, in order to measure its efficiency and effectiveness, the following Key Performance Indicators(KPI) are commonly monitored:
These KPIs can be measured against the top quartile performing Captive Finance Shared Services in a benchmarking exercise. In most cases, a huge deviation vs top quartile organisations indicate an inefficient processes which is more manual in nature. Upon stabilisation of a new Captive Finance Shared Services centre, it will be a good option to perform a benchmarking exercise to understand how your Finance Shared Services centre is performing vs others, either within an industry or a geographical area.
KPI 1.
Payment on Time
How is it reported?
% of invoices paid on or before its due date
What Insights does it provide?
• An indicator of the efficiency of the procure to pay process
• An indicator on liquidity and strength of cash flow of an organisation
KPI 2.
Straight Through Processing of supplier invoices
How is it reported?
% supplier invoices which can be processed by Finance Shared Services team without further clarification or confirmation by the budget holders
What Insights does it provide?
• An indicator of the efficiency of the procure to pay process
• An indicator of compliance to the process by all relevant stakeholders
KPI 3.
No. of days for month end close
How is it reported?
Number of days for the monthly financials of an organisation to be ready for publication
What Insights does it provide?
• An indicator of the efficiency of the record to report process
KPI 4.
Balance Sheet Reconciliation Performed On Time
How is it reported?
% of Balance Sheet Reconciliation which are prepared as per deadline
What Insights does it provide?
• An indicator of the efficiency of the record to report process
KPI 5.
% of Unapplied Cash
How is it reported?
% unmatched cash between bank statement and record as per accounting/ERP system
What Insights does it provide?
• An indicator of the efficiency of the order to cash process
• An indicator on liquidity and strength of cash flow of an organisation
B. Compliance and Governance
In addition, for an improved Compliance and Governance, the following Key Performance Indicators (KPI) are commonly monitored:
KPI 1.
Purchase Order Compliance Rate
How is it reported?
% of invoices matched to a valid Purchase Order
What Insights does it provide?
• An indicator of compliance to procurement policy by the budget holders in procuring for goods/services
KPI 2.
Quality of Balance Sheet Reconciliation as per agreed standards
How is it reported?
% of Balance Sheet Reconciliation completed as per standards set by Global Process Owners
What Insights does it provide?
• An indicator of quality and compliance
KPI 3.
% of Restrospective Purchase Orders
How is it reported?
% of Purchase Orders issued after Invoices have been received or work has commence/goods delivered
What Insights does it provide?
• An indicator of compliance to procurement policy
C. Finance and Business Performance
In providing value to the business, KPIs which provides insights on productivity and cash flow will be on top of the agenda for Finance Shared Services centres aiming to move up the value curve in providing value add services to their customers.
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Days Sales Oustanding (DSO)
How is it reported?
Average number of days for credit sales to be converted into cash
What Insights does it provide?
• An indicator on liquidity and strength of cash flow of an organisation
KPI 1.
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Days to Pay vs. Payment Term
How is it reported?
Average days for an organisation to pay its suppliers compared to payment term as provided by suppliers
What Insights does it provide?
• An indicator on liquidity via early or late payment by an organisation
KPI 2.
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% of actual operating expenditure/budgeted expenditure
How is it reported?
Total Operating Expenditure ( per type of spend)/ Budgeted Expenditure
What Insights does it provide?
• An indicator for productivity savings
KPI 3.
Benefits of Automating
Finance Reporting and Analytics
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A
dynamic view
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Allow time for analysis instead of report preparation
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Real Time
Reporting
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An impetus to for an organisation data clean up
Key Features of an
Optimal Finance and Business Analytics Dashboards
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Easily accessible, via desktop or mobile
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Self Service and intuitive
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Ability to pull data from multiple sources
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Strong Data integrity and accuracy
What are the considerations in developing Finance and business Analytics?
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Prioritisation in KPIs selection
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Quality of design of the dashboard
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Quality of data
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Storage of data- on premise or Cloud?
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Finance Talent
Upskilling
The AGOS Advantage for Finance Analytics
Our Finance Domain Expertise
Utilising our strong Finance domain expertise, we will provide you with options on standard analytics which provides the necessary insights to help run your Finance Shared Services or Finance function efficiently, effectively and in compliance with the required governance. Where relevant, we will assist you on the customisation of the reports and analytics.
Our Finance Automation Implementation
We have designed 20+ KPI dashboards, consolidated financial statements and integrated with cloud technology.
Our Superuser Business Knowledge
We have in dept business user knowledge for key ERP systems, procure to pay solutions, finance consolidation and visualisation tools.
Our Change Agent Role
We offer training ( link to Events/Training page) on Finance and business analytics to help upskill your Finance talent
