Development of Financial Structure Building Methodology

Project Goal

To develop a methodology (regulation) that will serve as the foundation of the financial controlling system and will actually determine the managerial perspective on the business.

Main Tasks:

• Determine the choice of “point of view” (perspective) on the subject of management;
• Compile a hierarchy of Financial Responsibility Centers that will:
  • correspond to the procedure for generating financial results;
  • be used for comprehensive management of economic activity results.

Project Stages:

• Company Familiarization:
  • Strategy;
  • Organizational structure;
  • Business processes;
  • Management reporting;
  • Motivation system.
• Development of Financial Structure Building Methodology:
  • Determination of the financial structure type (business perspective):
    • Region-oriented;
    • Product-oriented;
    • Client-oriented.
  • Identification and compilation of the list of Financial Responsibility Centers (FRCs);
  • Determination of FRC types:
    • Revenue center (RC);
    • Cost center (CC);
    • Marginal income center (MIC);
    • Profit center (PC);
    • Investment center (IC);
    • ….
  • Compilation of the FRC hierarchy;
  • Appointment of FRC managers;
  • Coordination of financial indicators by FRC;
  • Assigning responsibility of FRC managers for corresponding indicators;
• Compilation of the “Financial Structure Regulation” document.

Execution Methodology:

• Drafting an initial list of requested documents from the Customer and analyzing them;
• Compiling a list of questions for the Customer’s respondents and analyzing response results;
• Analyzing the received information;
• Coordinating and approving the developed documents on the financial structure building methodology.

Project Result:

• A formalized methodology (regulation) for building a financial structure corresponding to the goals and objectives of the project;
• A structured list of works and investment volumes for automating the financial structure building methodology.

Value for the Customer:

• A formalized managerial perspective on the business and the procedure for generating financial results;
• A comprehensive approach to managing economic performance results;
• Presence of a foundation for the financial controlling system;
• Presence of a foundation for the management personnel motivation system;
• Control and evaluation of management personnel performance.