3. Anticipate the full story
and announce it on time
If the bad debt expense is not only omitted by one financial leader, but also by their peers in other local operating subsidiaries of a multinational, the cumulative magnitude of the shortfall could become insurmountable.
Even when all the details are laid bare, financial leaders have to think ahead with their reporting in time of tough economic environments.
For instance, in the area of cash flow, they might want to consider their company’s exposure to liquidity risk and credit risk, and make sure that they monitor the company’s position regarding the financial market volatility.
"74% of the surveyed companies say that their managers, board members, and investors were positive that they could make informed decisions enabled by good financial reporting."
Most importantly, financial leaders should get their reporting across in a timely manner. A cautionary tale is Marconi’s drastic fall, which happened partly because its board did not receive the warning information on time.
There was simply no time, and thus no chance, for them to act. Ideally, the information is made available in parallel with the business aspects it addresses.
Then executives and board members could plan and take action to get the business on the right track. Just as their content, the timing of financial reports is crucial to both the operation and strategy of a business.
In the case of outsourcing non-core work like accounts receivable, the external party could help maintain a data hub that is accessible and consistent across all the local entities of a business. Since financial leaders know where to get reliable data, their reporting’s insight and speed are often improved.