Budgets are rarely respected. Pleasant or unpleasant surprises make budget revisions necessary. Good management practices require constant updates of budget planning, reflecting not only the most recent realized figures, but also the most up-to-date information available on the fundamentals of the business activity.
The first article in this month’s newsletter sets out the principles of liquidity management through the use of risk measures. Cash at Risk helps to ensure greater conformity between a company’s economic reality and its budget management, with the help of improved Value at Risk tools.
The second article deals with company reporting.
Examining firms’ financial reports often reveals foreign currency effects, sometimes the impact of raw material price variations. However, except for in very qualitative terms, assessments touching on the overall economic situation and its impact on the company are seldom indicated, which prevents any clear identification of the consequences of company management decisions and thus of the company’s intrinsic performance.
Likewise, although more and more companies have become aware of their vulnerability to weather conditions, none calculates the impact in its reporting.
We offer easy-to-implement budget-based methods for making more effective use of business reporting. These methods open the door to company management truly attuned to performance and risk.
Fayna Lionet
OTC Conseil Americas