Development and introduction of company financial management processes requires answers to the following questions:
- What are the tasks associated with company cost management
- What information is needed for financial performance analysis and decision making. Do the methods of generating financial results enable sorting out the causes of changes in main indicators
- What reports are needed for the management of holding (parent company, shareholders), what purposes are management reports used for, is indicator detailing in the reports necessary and sufficient for making decisions
The management tasks handled by each holding enterprise in relation to each type of activity bear upon the methodological approach to building financial management processes
Should management tasks be formalized and clear, then important is application of a common technology to generating indicators and reports when handling the following tasks:
- Cost planning and accounting
- Generation of type of activity-, product-, service-based target and actual costs
- Generation and analysis of income and financial results
- Analysis of technical and economic factors bearing upon company key performance indicators
- Building target and actual company budgets
- Preparation of holding (parent company) consolidated statements
Enterprise reference data (planning and cost accounting objects, income and spending items, cost centers, etc.) used for financial management must be complete, not redundant and accessible for changes. Statements should be prepared within a reasonable period of time and on the basis of uniform handbooks and classifiers. The necessary standards regulating organization of major financial management processes must be in place and running at the enterprise
So, development and introduction of financial management processes require understanding of enterprise management tasks. It is also necessary to have an idea of the architecture of financial management as a whole. To put it differently, financial management methods and organization must make it possible to:
- review causes of changes in enterprise financial performance
- link cash flow management to production processes
- generate not excessive management statements by uniform rules, within deadlines and containing the required analytics
