Demand for more financial transparency is very relevant these days. This issue is at the top of the agendas of a.o. administrative and regulative institutions, media and politicians – both nationally and internationally. Large organizations realize that good financial insight not only provides a basis for efficient operations, but also improves commercial effectiveness.
Good financial insight is the key for managing your organization’s efficiency. It makes transparent exactly which department adds value to client products and services and what that contribution is. Financial insight enables you to manage both effectiveness and cost levels. As a next step, you can begin to compare your cost levels to other suppliers in the marketplace (benchmarking), which can help you to further optimize your operations.
Financial transparency is a powerful tool for enhancing commercial effectiveness. With financial transparency you will have exact insight not only into what you operationally supply to each and every client, but also into related costs and contribution margins. With the help of this insight, you can start a conversation that adds value to both your client and your own organization. For potential future clients you will be able to use financial modeling techniques to calculate what future costs will be. Finally, financial analysis of the contribution of your individual services will facilitate your product life cycle management, i.e. your considerations in shaping and positioning your future portfolio.
Last, but not least, most stakeholders (such as shareholders, clients, supervisory bodies, and media) require more financial insight into your operations. Also, they often ask you to account for how thoroughly you have been managing their interests and resources, or to what extent the organization complies to integrity standards and rules that have been set.
We were prepared to make bold, innovative decisions to enhance our profitability. But if you are going to be bold, you better be sure your facts are correct.R.S. Kaplan "The Co-operative Bank", Harvard Business School Case
Reports for external parties are not only easy to produce now, but they are also consistent in their structure, quality, and underlying figures.