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D I S C OV E R I N G H I D D E N VA LU E

MBS_Finance_Final.qxd 19/05/03 15:45 Side 1 (1,1)

M I C R O S O F T B U S I N E S S S O L U T I O N S2

TABLE OF CONTENT S

Everything ends up on the bottom line 4

No reliable plans without reliable data 6

Information is meant to be shared 8

Financial information is the bottom line 10

Microsoft Business Solutions helps you make more profitable decisions 11

Bibliography 11

For more information 12

The bottom line is the front line


You are on the front line of your company’sbusiness. Why? Because as a financialmanager, you’re responsible for yourcompany’s bottom line. And in business – inany kind of business – the bottom line is thefront line. It’s what makes or breaks yourbusiness.

Financial management may not have thesame high profile as other areas ofbusiness, such as supply chaincollaboration or customer relationshipmanagement, yet it is at the core of everycompany. No matter what type of businessyou’re in, financial information runs throughit and beyond to your partners, customers,investors and to the authorities.

Recently, however, financial managementhas come more into the media spotlight – most unfortunately as the result of theEnron and other bankruptcy filings. Despitethis fact, these scandals may havepositive secondary effects in the form ofnew demands for greater corporate

accountability. Greater accountabilitymeans greater visibility, and thus, greatercontrol of your business information.There are, however, some prerequisites toachieving such control. Your informationmust be consolidated and continuouslyupdated in order to plan accurately.What’s more, in order to influence yourbusiness proactively, you need tools tohelp you analyze and disseminate yourfinancial information throughout theorganization.

This booklet will give you some inspirationas to how you can make your financialinformation come to life. It covers ways toachieve greater control and operationalefficiency. It gives you real-life examplesof how other companies are using theirfinancial information proactively, and itpresents future developments in the areaof the financial supply chain. This bookletoffers our view of how to get the most outof your financial information and improveyour bottom line.

Discovering the hidden value in your financial information.And managing your business more efficiently.

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Connected Business Management Solution: Applications and services that allow real-time accurate planningand management of all resources via the unrestricted flow of information.

Real-time: Operations that occur consistent with human perception of time. For example, when one person postsan invoice in a business software system, and this is instantly reflected to all other users throughout the system.

Financial supply chain management: The management of the flow of financial information betweencompanies and within a company.

Financial information is at the core of yourbusiness. Whether it’s information relatingto production, sales or service – atheadquarters, or at a subsidiary – it hasan effect on the bottom line. Yet, it is oftenthe case that this vital data is out of reachand scattered in the information systemsused by different areas of the business.Many companies deal with this today bymanually consolidating the data stored invarious systems. This not only wastes time,but also compromises the validity of theinformation.

Take a production company that hasseparate manufacturing and financialsystems. They key in estimated productioncosts manually and consolidate the datawith their financial system on a weeklybasis. Now let’s say that during production,parts are unexpectedly damaged and needto be scrapped. This loss of material is onlyrecorded in the manufacturing system, yetit affects finances. It could result in thecompany not making their sales, not

having the right cost/revenue ratio, andultimately, it could obstruct cash flow.

Another company has one businesssoftware system in their head office andvarious systems at their subsidiaries inother countries. They use a third tool to linktheir local chart of accounts to head officechart of accounts. What’s more, some ofthe systems used by the subsidiariescannot access Microsoft Excel, which iswhat this company’s headquarters uses.The company has to rekey and recheck theinformation from the subsidiaries, whichtakes time and results in inaccurateinformation, causing problems both for thehead office and the subsidiaries.

Keeping up with the flow

Inaccurate consolidation of financialinformation and inefficient cash flowmanagement are consequences ofdisparate information systems that don’ttake into account the flow of financialinformation throughout a business.

Another consequence is lack of internalcontrol against human error andfalsification. A connected businessmanagement solution, on the other hand,lets you view your business as a single anddynamic entity. You avoid inaccuratefinancial data and can get a snapshot ofyour financial condition at any time.

A connected business solution worksacross different areas of the business,often has local versions (for companieswith multinational subsidiaries) and offersa real-time overview of your financialcondition. If the unexpected happens inproduction, any financial implications areimmediately reflected in the system. Thereis no need to reenter information. It’salready consolidated, accurate and up-to-date. In addition to saving time and beingmore secure, the live information can helpemployees work more efficiently.

CASE IN POINT

Microsoft Business Solutions has helpedCrown Leisure, one of the leading operatorsand distributors of amusement equipmentin the UK, to reduce the time used onmonthly reporting by one third. In the past,they had to gather and reconcile data fromvarious systems used at different locationsand for different areas of business. Now,employees throughout the organizationhave fast access to up-to-date financialinformation. For example, controllers canalways see the customer balance. Sincesales orders are entered directly into thesystem, the balances are 100% accurate,and the system prompts the controllers tomake a weekly or monthly call when acustomer goes over the credit limit.

Everything ends up on the bottom line

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Some companies have begun to gain a competitive advantage by optimizing theirfinancial supply chain management. For example, a company’s bank offers to makepayments to vendors and to receive payments from customers. In this way, settling billsis efficient, and no penalties are incurred.

The level of efficiency increases proportionately to the level of which a company makesuse of the Internet to collaborate with their financial supply chain. If their systemexchanges information automatically with the bank’s system via the Internet, then there isno reentering of data and no risk of human error.

FUTURE DIRECTIONS:

COLL ABORATION WITH F INANCIAL

SUPPLY-CHAIN PARTNERS


The financial supply chain: controlling and processing the flow of financial information involves the

coordination and integration of a number of interdependent entities.


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Web services can complement and enhance your business management solution byconnecting it to a third-party service provider on the Web. For example, you can use anonline service to run credit checks or to investigate currency rates. If the Web service isintegrated to your business solution, then you won’t have to waste time reentering data.It too becomes a dynamic part of your solution.

While the concept of Web services is not new, it is now closer to reaching its potentialdue to a number of developments such as less expensive bandwidth and more flexibleways to connect applications. As Darwin Magazine puts it:

“The Web services approach doesn't necessarily make earlier integration technologiesobsolete. But it makes types of integration possible that would have been hellishlycomplex otherwise.”1

FUTURE DIRECTIONS:

WEB SERVICES


There is no business intelligence – noreliable foundation to base decisions on – without reliable data. It is often the case,however, that companies base tomorrow’stactics and strategy on yesterday’s numbers.

For example, a company may base itsforecast on last year’s figures with anincrease or decrease by a certain percentage,or based on sales and purchasing reports.Either way, the adjustment is no morethan a guess of foreseeable demand,which can have negative consequences.

Or say a company bases their analyses on amonthly extraction from a purchasingdatabase, such as an Excel spreadsheet. Inthis case, it is outdated the very day it is

extracted. There might be hundreds of ordersthe next day, and the planning is thus flawed.

If, however, the forecasting tool is an integralpart of the business management solution,sales and purchasing personnel can keynew customer and vendor agreementsdirectly into the system and account forexpected demand in real time. If a customerthen calls later to change an order, it can beupdated and reflected immediately in thesystem. The company can plan as often asneeded – based on accurate numbers.

What’s more, they can use the tools builtinto the ERP system to analyze the dataaccording to whatever their needs are atthat particular time. Your business is always

in motion. A connected business solutionhelps you keep up with it. Financialmanagers can get a picture of thecompany’s financial performance at anytime. If they want an instant snapshot, theycan use a filter to see a balance from thebeginning of the month to the present day.They can drill down and explore the detailsof any individual transaction. They can evenget a view of a particular part of thebusiness from a unique perspective. Forexample, they can analyze sales by region,by department and by date. With the righttools you and your team can explore howwell the business is operating, where itneeds help and where it’s going.

CASE IN POINT

A Microsoft Business Solutions system ishelping Van Compernolle, a small businessin Belgium, gain an immediate overviewof their financial condition. The solutiongives them fast access to informationabout the profitability of their wide varietyof products, which ranges fromautomotive parts and auto-navigationalsystems to telecommunications products.

The flexible reporting facilities mean thatkey sales information, including top 10product lists and best and worst sellers,can be produced at the touch of a button.

No reliable plans without reliable data

Web services: Services that are delivered over the Internet, which combine with existing software applicationsto provide new solutions to business problems.

Business Intelligence: The product of analyzing quantitative business data. Business Intelligence providesinsights that will enable business managers to make tactical decisions, as well as to establish, modify, or tunethe business strategies and processes in order to gain competitive advantage, improve business operationsand profitability, and generally achieve whatever goals management has set. BI-tools software is used toanalyze business data and provide reports, visualizations, and alerts to users.2 M I C R O S O F T B U S I N E S S S O L U T I O N S 7


Obviously, it’s important to share yourfinancial information. In fact, it’s part ofthe financial manager’s responsibility todistribute the information to authorities,stakeholders, decision makers andemployees. If a company does not havecentralized control of the information,however, then they could end up in asituation where they are distributinginaccurate and outdated information.

In companies that lack an efficient formof centralized control, it’s not unusual, forexample, to find a marketing plan beingmade based on a different version ofinformation than the sales forecasts arebased on. The marketing and salespersonnel waste time discussing who hasthe right information and end upwondering whether any of it is valid.

But how do you maintain centralizedcontrol and still disseminate the

information that other areas of yourorganization need? On the one hand, youwant the system to update your datawithout any human intervention in orderto ensure its validity. On the other hand,you want to be able to pluck outinformation and share it with the peoplein your organization.

What’s needed is an interface that youcan use to present reports. Furthermore,the interface must deliver the informationin a way that’s meaningful to the peopleusing it. After all, it’s the peoplethroughout the organization whoultimately must use the information tomake decisions.

Companies have begun to use role-basedportals to deliver relevant and timelyinformation. These portals offer access todata and functionality from within theERP solution. The information is

presented on a Web interface that isfamiliar to anyone who uses the Internet.Everyone in the company – from topmanagement to entry-level staff – can logon to their personalized portal. On theportal, they can see the informationrelevant to their role, including financialreports presented graphically.

For example, let’s say you create afinancial report in which you comparebudgets to actual profits by region,product and date. You extract the real-time data from your businessmanagement system, and convert it into agraphical chart – perhaps in MicrosoftExcel. You then make the chart availableto the relevant marketing and regionalmanagers – right on their personalizedWeb browser. There are no discussionsabout who has the right information.Everyone does.

CASE IN POINT

Microsoft Business Solutions helpedAPCO Worldwide, a global public relationsfirm, establish a billing and accountingsystem that functions seamlessly,accurately and quickly. Multi-currencycapabilities helped integrate APCO'soperations on a global basis whileeliminating inaccuracies in data. APCO'ssavings in the first year of using softwarefrom Microsoft Business Solutions totaled40 percent of the entire cost to developand implement the solution worldwide.

Information is meant to be shared

Portals: Collaborative solution that uses the Internet to offer self-service interaction and access to informationfor decision makers, employees, business partners and customers via the Internet.

XBRL: An electronic format for simplifying the flow of financial statements, performance reports, accountingrecords, and other financial information between software programs.3M I C R O S O F T B U S I N E S S S O L U T I O N S8


Emerging standards for financial reporting can make the exchange of financialinformation more transparent. One rapidly expanding standard is XBRL (extensiblebusiness reporting language), a language for reporting over the Internet. XBRL hasalready been adopted as the standard reporting language by the Australian bankingauthorities, by the Securities and Exchange Commission (SEC) in the US, and it ismaking similar headway in the UK, Germany and Japan.

According to BusinessFinance.com: “XBRL will make companies far more transparentthan they are now. No longer will reports need to be processed in different formats fordifferent users. Financial data will be coded once, then rendered automatically into anyreporting form – from annual reports to reports for external auditors or SEC filings toreports for the company’s business partners.”4

FUTURE DIRECTIONS:

EMERGING STANDARDS



How do you get the most out of yourfinancial information? First, you needcontrol over the critical financial dataflowing throughout your businessmanagement software solution. You canonly get an accurate picture of yourcompany’s financial condition if yoursolution brings together your financialinformation from all areas of yourorganization. With such a solution, youcan rely on the accuracy of financialreports, and you know exactly where youstand at any given time.

In order to take complete advantage of ourinformation, however, you need to share itthroughout your organization. Today, it is

possible to do so by delivering financialinformation directly to decision makers’desktops. Personalized Web portals allowyou to share reports, plans and analysesin a way that is easy for diverse users todigest.

A connected business management solutionallows you not only to share information, butalso to maintain control of it. You can besure that the real-time information you useand share is accurate and up-to-date. Youcan use it as a basis to control yourcompany’s finances. You can explore trends,discover opportunities, and find new ways tobring your financial information to life andimprove your bottom line.

Financial informationis the bottom line

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BIBL IOGRAPHY

1. Darwin: Sari Kalin: The Essential Guide to Web Services, January 2002

2. Gartner Group: Alan Tiedrich: Business Intelligence Tools: Perspective, October 9, 2001

3. The XBRL Steering Committee.

4. Online solutions for finance executives: Tad Leahy: See-Through Financials, BusinessFinanceMag.com, January 2002

Microsoft Business Solutions offersconnected applications and services forsmall to mid-sized businesses. Applicationareas, including financial management,manufacturing, distribution, customerrelationship management, e-business andbusiness intelligence, are all maintainedin one place. This makes it easier toaccess up-to-date information and toadministrate and adapt your solution.

The integration of critical businessinformation helps you:

• Base your plans and reports on accurate and reliable information.

• Gain control over expenditure and knowwhen and where you are generating revenue.

• Deliver all mandatory requirements to authorities, investors and other stakeholders easily and with absolute confidence.

Microsoft Business Solutions HELPS YOU MAKE MORE Profitable DECIS IONS

Functionality for financial management is an intergrated

part of all suites in Microsoft Business Solutions.

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Microsoft Business Solutions, a division of Microsoft, offers a wide range of integrated, end-to-end business applications and services designed to help small, midmarket and corporatebusinesses become more connected with customers, employees, partners and suppliers. Microsoft Business Solutions’ applications help to optimize strategic business processesacross financial management, analytics, human resources management, project management, customer relationship management, field service management, supply chainmanagement, e-commerce, manufacturing and retail management. The applications are designed to provide insight to help customers achieve business success. More information about Microsoft Business Solutions can be found at http://www.microsoft.com/BusinessSolutions/.

© 2003 Microsoft Business Solutions ApS, Denmark. All rights reserved. Microsoft, Great Plains and Navision are either registered trademarks or trademarks of Microsoft Corporation, Great Plains Software, Inc. or Microsoft Business Solutions ApS or theiraffiliates in the United States and/or other countries. Great Plains Software, Inc. and Microsoft Business Solutions ApS are subsidiaries of Microsoft Corporation. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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FOR MORE INFORMATION

Microsoft Business Solutions helps you make more profitable decisions. You worksmarter because your solution is tailored to the way you do business. You work fasterbecause you have immediate access to information from all around your company. You can count on us for long-term support as your needs change and your businessgrows. More than a quarter of a million companies rely on Microsoft Business Solutionsfor profitable ideas. Find out how we can help you.

Visit www.microsoft.com/BusinessSolutions to read more, or enter information aboutyour company and have a solution recommended for you.


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