Shorter Cycles, Increased Demands Influence How CFOs Meet New Objectives

By Hartlen, Brian | The CPA Journal, September 2003 | Go to article overview
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Shorter Cycles, Increased Demands Influence How CFOs Meet New Objectives


Hartlen, Brian, The CPA Journal


According to a recent survey of financial executives conducted by CFO Research Services and Comshare, Inc., 89% of finance executives surveyed said their CEO wants the finance function to provide analysis of business unit performance on demand, yet only 57% have the capability to do so. In addition to the CEO, regulators and shareholders are placing increased pressure on CFOs to deliver more information in less time. To comply, CFOs are modifying their approach to traditional management processes, and budgeting is often the first process transformed.

Historically, the typical budget cycle takes 12 months to complete, yet is often obsolete within six months. Together with shortened sales cycles (today, most companies are unwilling to commit to a sale far in advance), CFOs must rein in the lengthy budgeting process and be able to reforecast more frequently as sales commitments come in throughout the year. For today's finance executive, the objective is to provide more information, that is more accurate, in less time.

Unfortunately, many organizations find implementing rolling forecasts too challenging, and asking staff to assemble a budget in less time seems out of reach. However, with corporate performance management (CPM) technology, companies can significantly reduce the amount of time spent on budget development while creating a rolling forecast system that can easily be done quarterly or more frequently.

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