Post-Report Working Order: Whose Agenda Do Financial and Fiscal Check Up Findings Enter

In fiscal and financial assessment work, attention is often directed to the study itself. Scope is set, data is compiled, indicators are calculated, findings are reported. When the report is delivered, the work is considered complete. Yet the value the report brings to the company largely emerges after the delivery date. The output of an integrated assessment is not a single document entering the agenda of a single unit. Fiscal topics concern the accounting unit and the external fiscal advisory side, financial topics the finance and treasury side, and intersection areas concern both together. Some topics fall directly within the decision area of senior management or the board. When it is not defined in advance on which agenda findings will be addressed, the report may often remain a general briefing document.

The reason for this is often unrelated to the content of the report. The observations may be accurate, the indicators consistent and the recommendations applicable. What is missing is a definition of whose agenda the finding will sit on from the moment of delivery, under which heading and for how long. Without this definition, the report may turn into a text that everyone concerned reads but for which no one is directly responsible. In most companies this stage does not require setting up an additional structure. The existing meeting order, the existing reporting flow and the existing job descriptions are often sufficient. What is needed is to determine where findings will connect to this existing structure.

This article looks at the working order established after an assessment: how the recipient is determined according to the nature of the finding, how agreement is reached on common definitions and data sources, and which elements the monitoring order is built on.

The Nature of a Finding Determines Its Recipient

The topics arising in an integrated assessment are not of a single type. Some concern the record and document order; their correction is defined and often short in duration. Some require a process change; they may call for an arrangement in collection, inventory or pricing policy. Some are tied directly to a decision; rearranging the debt structure or evaluating a business line falls into this group.

The recipients of these three groups also differ. The first group is often addressed on the joint agenda of the accounting unit and the external fiscal advisory side. The second widens to include the relevant operating unit; a topic concerning collection terms involves the sales unit, and one concerning inventory turnover involves procurement and production. The third is carried to senior management and, in most cases, the board.

Making this three-way distinction in advance also changes how the report is read. When findings are grouped by nature, each unit can directly see the part that enters its own agenda. Reading the report in full remains useful; however, detailed examination of the whole text is not required to begin implementation. This may shorten the transition to implementation, particularly where the report is long.

When this distinction is not made, a frequently encountered situation is that all findings are conveyed to a single unit. When the report is delivered to the finance unit, topics requiring a process change also enter that unit's follow-up list. Yet when implementation belongs to another unit, follow-up falls outside the area of authority and the matter may drop off the agenda over time. The finding itself may have been identified correctly and still find no response.

Topics in the intersection area are the part of this distinction that requires the most attention. Changing cost allocation keys affects both fiscal reporting and pricing decisions; an arrangement in provision practices may change both the consistency of the statements and the equity picture. When such topics are left to a single unit, the way the other side is affected may fall outside the assessment. In practice, addressing these topics on the joint agenda of both units and obtaining both views before the decision may prevent later corrections.

Some findings may not require direct implementation at all. Certain topics arising in an assessment describe situations accepted as ordinary under current conditions but useful to monitor. Keeping these topics on a monitoring list rather than treating them as closed is often more appropriate. The course of the same topic then becomes comparable in the next assessment.

Determining the recipient is not merely a matter of distributing responsibility. It also determines the language in which the finding is conveyed. A concentration in receivable ageing may find an easier response when presented to the finance unit as an indicator and conveyed to the sales unit together with customer and term information. The content need not change; adapting the presentation frame to the recipient is often sufficient.

The order of presentation may also affect the recipient's engagement. A briefing that begins with the topics falling within each unit's own area may make ownership of the matter easier. Where the general assessment is placed first, the relevant unit may find it harder to make the connection until it reaches its own topic. This is a difference set by sequence rather than content, and it can be arranged easily at the presentation stage.

For topics concerning the record and reporting order, reviewing accounting and reporting systems may be useful; for topics requiring a process change, bringing the planning and management framework into play may be useful.

Common Definitions and a Single Data Source

The point at which the post-report working order is most often strained is differences in definition. The same item may be calculated differently in different units. The sales unit may track revenue by order date while the accounting unit records it by invoice date. The definition of an overdue receivable may be built on day count on one side and on collection expectation on the other. These differences are invisible under ordinary conditions; they come to the fore when findings are opened to discussion.

These differences often do not stem from an incorrect practice. Each unit may have developed a definition suited to its own need, and that definition may work correctly within its own frame. The difficulty arises when figures produced with different definitions are placed side by side in the same meeting. At this stage, rather than treating one definition as superior to another, separately determining the common definition to be used on the management agenda is often a more workable path.

Because the assessment clarifies these definitions, the post-report period is a suitable time to preserve that clarity. Putting the definitions used in the study into writing and using them identically in subsequent periods makes comparability possible. Otherwise indicators recalculated each period rest on different ground and reading the direction may become difficult.

Putting definitions into writing does not require an extensive document. Which items each indicator includes, which date it is calculated by and which source it is drawn from can be expressed in a few lines. This short definition set shows its value particularly when the team changes. When the person calculating an indicator changes and the calculation method changes with them, comparison between periods often becomes harder.

The single data source principle is tied to the same framework. Once it is determined which system an indicator will be produced from, the likelihood of different figures on the same subject circulating decreases. This does not prevent units from keeping additional tracking for their own needs; it only defines the source of the figure carried to the management agenda.

The current state of the reporting infrastructure is decisive in applying this principle. In companies where data is held in more than one system, the decision on which system indicators will be produced from often ceases to be a technical preference and becomes a management decision. Taking this decision after the assessment, while the definitions are fresh, may ease implementation.

Another benefit of agreeing on common definitions is that it changes the subject of the discussion. When definitions are unclear, a significant part of meeting time may be spent discussing whether the figure is correct. Once they are clear, discussion turns to what the figure means and what will be done. The same finding may be handled with different conclusions by the same team; what is decisive is often whether the ground is common.

On how indicators are read within a company's own history and sector dynamics, the article "What Is Financial Health: Why the Same Ratio Does Not Mean the Same Thing in Every Company" offers a complementary frame.

Financial and Fiscal Check up: The Monitoring Order

Once the recipients of the findings and the definitions are clear, what remains is to establish the monitoring order. This order need not be detailed; it needs to be continuous. In most companies a simple structure can run longer than a complex tracking system.

The elements useful to define in a post-report working order are as follows:

→ Responsible unit: the party to carry out each finding identified by job description rather than by name

→ Order of priority: findings ranked by impact and by time to implementation

→ Target date: topics completable in a short time separated from those requiring several periods

→ Progress indicator: the measure by which completion will be tracked for each topic

→ Review frequency: the intervals and the agenda in which progress will be evaluated

Identifying the responsible unit by job description reduces the continuity risk created by person-based follow-up. In the event of a role change or departure, follow-up of the topic remains with the relevant unit of its own accord. The same approach also covers defining the party to coordinate topics that concern more than one unit; without this definition, shared topics may often remain pending on the agenda of the busiest unit.

Once these elements are defined, the report ceases to be a one-off document and becomes an input to the company's monitoring order. Comparison also becomes possible when the next assessment is carried out; which topics have closed, which continue and which new topics have arisen become visible.

Setting the order of priority is the element among these that requires the most discussion. Addressing all findings at once is not possible in most companies; resources and time are limited. In ranking, looking not only at the size of the impact but also at the time implementation requires may be useful. Bringing forward topics that can be completed quickly and produce visible results may support the continuity of the working order. Longer topics become trackable when divided into intermediate stages.

Defining the progress indicator from the outset also eases implementation. When it is not determined by what measure a topic will be considered complete, progress assessment may rest on impression. In work concerning collection terms the average collection day count, and in work on the inventory side the turnover period, may provide this measure. Determining the measure in advance also reduces the likelihood of the outcome being opened to discussion.

Review meetings that are short and regular often produce a more effective result than extensive meetings held at long intervals. A half-hour evaluation once a month may keep topics on the agenda. Not all findings need to be revisited in these meetings; only the course of open topics can be tracked.

Linking briefings to senior management and the board to the same structure may also be useful. Conveying the information presented to the board in the same format and with the same indicators each period allows comparison between periods and enables the agenda to be followed on a finding basis. The board advisory framework may be supportive in establishing this link. On cash-side topics a link to working capital management, and on topics requiring structural arrangement a link to restructuring processes, may arise.

Establishing the link between the post-report order and the next assessment may also be useful. Closed topics, topics kept under monitoring and ongoing work form the starting point of the next study. Once this link is established, each assessment does not begin from zero; it builds on the previous period's findings. Over time a series of the company's own indicators forms, and this series allows comparison with the company's own history alongside sector comparisons.

In establishing this structure the scope need not be kept wide from the outset. Follow-up that begins with a few topics and is sustained regularly often returns more than a broad structure abandoned after a few periods. Ensuring continuity may be regarded as a step that comes before widening the scope.

At NT Finans Partners, we turn the findings within the scope of our financial check up model into a work plan with a defined owner, calendar and progress indicator, and establish the monitoring order in a way that is compatible with your company's existing reporting structure. For detailed information you can contact us.