Ep. 29: Laura Landmark - Business Performance Management

Connect with Laura:


https://www.linkedin.com/in/laura-landmark/

https://www.youtube.com/channel/UCbedHQf3GYH46-QoqMODU3g

https://www.mantleanalytics.com/blog



Software:


https://www.bizviewsystems.com/bizview365

https://onestopreporting.com/

https://powerbi.microsoft.com/en-us/






FULL EPISODE TRANSCRIPT


Adam: (00:05)


Hey everyone. Welcome back to Count Me In. IMA's podcast about
all things affecting the accounting and finance world. I'm your
host, Adam Larson. And today we're going to hear episode 29 of
our series. Our featured expert guests for today is Laura
Landmark, who spoke to Mitch from Norway about business
performance management for a concept that everyone may not be too
familiar with. Laura does a great job making important
connections for accountants. So let's go ahead and listen to what
she has to say. 


 


Mitch: (00:37)


What is business performance management? Why is it important and
why is it so hard? 


 


Laura: (00:44)


That's a great question. Business performance management is
actually a set of processes really that enables the, you know,
the managers to to keep track on whether they're actually heading
towards achieving their goals or not. I think that many people
these days call it financial planning and analytics and you know,
so there are, there are different words for it, but the reason
why it's important is that without keeping focused on how the
company's performing, there's a very good chance that you're not
going to end up where you want to be. And especially with these
days, things moving at the rate of knots, you know, moving so
quickly, it's important to be fully on the ball and keep a track
month by month, week by week, day by day, whichever is the
relevant time-span on, on how you're performing against the goals
and the targets for the company. And the reason why this is so
hard is basically because there are so many moving parts, so it's
not easy to, you know, to basically capture the actuals that are
in the economy system and match them up potentially with the time
registration that's going on in the time system. And then the
project transactions that are in the project system and the whole
ecosystem of, of different applications that exist in an
organization make it very difficult to actually do unless you've
got good systems in place of course.


 


Mitch: (02:15)


Now our main audience is the management accountants and you
referenced financial planning and analysis. So from FP&A or
business performance management, what is your view on the
budgeting and the forecast that accountants are typically
responsible for? 


 


Laura: (02:32)


Yeah, that's, well that's another good question. I can resonate
with your audience cause I'm also a chartered management
accountant. So I took my exams in London, well many years ago, I
think about 20 years ago now. And I have spent an entire career
trying to look at the future of companies, the different
companies that I worked with or worked for because that's what
we're trying to do. You know, as management accountants, we're to
take data and to utilize it for reporting, forecasting and
prediction. Budgeting and forecasting are extremely important. I
would say forecasting more so than budgeting because it says it's
live information. Really, when I talk about forecasting, I'm
talking about rolling forecasts. So every month that goes by is
another month of history and an extended month on the end of the
forecast, whether it be a 12 month rolling forecast or an 18
month rolling forecast. You know, in reality, we've used these
for all of our customers for quite some years now that we've been
working in this way. And I've had many stories of customers that
have been able to use the rolling forecast for effectively
managing their businesses and also avoiding potential fools and,
and threats. So one particular customer that I worked with, she
was very proactive. This was a few years ago now, and she wanted
to build a very detailed cashflow forecast because I think she
could detect that they were potentially troubles ahead. So I
worked with her for a while and actually understanding her
business, I'm putting together a driver base full cost for her,
which would roll forwards and it rolled forwards for 18 months.
So every month that went by, she could look forwards and see 18
months into the future. And what she could see that in month 16,
there was this big cashflow Dip and for a number of different
reasons, it meant that she needed to go and renegotiate some,
covenants with the bank. Now, what we found and what I found is
that if you can go to the bank with a full cost and with a set of
financial statements that show, you know, your, profit and loss,
your balance sheet, your cashflow forecast in, you know, a period
of say 12 to 18 months, they love it. And it's so much easier to
go to the bank and renegotiate terms when you actually don't need
the money. You know, when you get to the stage where, you know,
in crisis and you need the money now, then it's very, very
difficult to actually work, you know, with the banks. Naturally
they see the risk of lending the money or extending the times. So
I would say, although full costs, you know, they, they can't tell
you the future, nobody can tell you the future. And the goal of
forecasting is not actually to predict the future, to tell you
what might happen and to allow you to do that scenario planning.
So what if this, what if that, and as I say every month that goes
by as new information allows you to, to adjust the forecast, it
allows you to play with the figures and to create a future before
the future happens. 


 


Mitch: (05:46)


So many of our previous conversations have been around data
analytics and how there is technology available to really enhance
this efficiency that you were talking about, you know, enable our
management accountants to offer more foresight as opposed to
insight into what's currently going on. So I'm curious what kind
of technology you know, you are accustomed to or you know, is
available to accountants to really improve in this planning and
overall business performance, 


 


Laura: (06:15)


Right? Yes. Well we primarily use three tools for this. And when
we started all business, we went actually all over Europe looking
at different types of tools, different types of software to
actually create the kind of environment for our customers that we
wanted to be able to create. And what we found is, you know, a
range of different great software, you know, so there's a lot of
software out there, but for us it was important that it was SQL
based because that's what our skillsets are. So what we found a
is actually a Scandinavian product, which has recently been
bought up by I think an American company actually, but it's
called Bizview365. And what happens? Well what happened when we
found this product was that it wasn't particularly set up for
accountants. Now accountants, you know, we work a lot with
accountants and they typically have a portfolio of let's say 300
or 3000 clients. You know, they're often working with many, many,
many companies. And this particular product that we found ...