From Pre-Financial to Financial Information: a Different Perspective

Pre-financial information are strategic: their relevance is very often underestimated by the company. Sooner than later these information will "evolve" into monetary items affecting the company net result. That's the reason why it is vital to understand their trends and consequently to take actions. Moreover it is better to define them pre-financial information instead of non-financial info.

For example the human capital is one of the most powerful company resource and all the KPIs linked with people are very strategic for every company. Let's consider this set of pre-financial info: decreasing level both of the partecipation rate to the company engagement survey and of the employees' satisfaction rate plus an increased average age of the total employees.

It's only a question of time: the company delivering this type of pre-financial KPIs will suffer, on one side, an increased level of inefficiency (which is a decreased of the organizational capital), therefore more operative cost (which is a reducing of financial capital) and on the other side a reduction of its relational capital, for example the incapacity to understand the clients, and therefore less revenues in the profit and loss account (which is again a reduction of financial capital).

This simple example shows why it is so important to focus on the pre-financial indicators. In particular the most advanced CFO should invest more time on this topic leveraging the consolidated discipline of the finance experience to deal with the pre-financial infos in a new perspective to support all the other company departments. This is all about integrated thinking!

For more info on how to implement it, have a look at
http://collectiveintelligence-mag.mazars.com/raising-the-bar

 

Tagetik for Integrated Reporting

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