To steer the company, it is necessary for the manager to know where he is going, what is most commonly called the vision. From this vision, he will use the principles of Hoshin Kanri to deploy it within the company.
Introduction
To steer the company, it is necessary for the manager to know where he is going, what is most commonly called the vision. From this vision, he will use the principles of Hoshin Kanri deploy it within the company and build its financial plan.
Vision and Accounting
From the balance sheet, we will correlate and validate the actions against the accounting data. We find most generally a diagram of this type.
|
Vision |
||
|
Strategic plan Objective 5 / 10 years Horizon |
||
|
Operational plan Indicator – 2 / 5 years Horizon |
||
|
Investment plan |
Financial plan |
Forecast profit and loss accounts |
|
budgets 1 year Horizon |
||
|
Investment budget |
Cash budget |
Operating budget |
|
Dashboard and reporting 1 day to X weeks |
||
Strategic Elements
As we can see, there are 2 categories of elements in the table above. Purely strategic elements stemming from vision and choices, and purely financial elements.
For purely strategic elements, they are described in the article on Hoshin Kanri. You will find the vision, the strategic plan and the operational plan.
Financial planning
Its purpose is to match the investment needs with the resources that the company is able to mobilize. This planning answers 3 basic questions :
- The ability of the company to absorb investments and disinvestments in the short and medium term.
- The ability to reconcile its investment and financing plans.
- Predict the financial profile of the company in the following years.
The investment and financing plan
The logic of the medium-term financial plan leads to the construction of a provisional financing table in which the following elements have been incorporated: :
- Budgets for existing activities.
- Budgets for selected investment projects.
- The finances available to the company taking into account the costs related to these finances (dividends…).
The plan will be represented as follows :
|
Years |
N + 1 |
N + 2 |
… |
N + 5 |
|
Financing needs :
|
||||
|
Total financing needs (1) |
||||
|
Funding Resources :
|
||||
|
Total funding resources (2) |
||||
|
Change in annual cash flow (3 = 2 -1) |
||||
|
Initial cash (4) |
||||
|
Final treasury (5 = 3 + 4) |
The projected income statements
From this investment and financing plan, we will build the income statement. This is a financial statement intended to represent the net income (profit or loss) and the elements that made it possible to calculate it. Using our forecast data, we will predict our results in the short or medium term.
It is built quite simply by representing :
- In the left column, the projected expenses.
- In the right column, the takings.
It looks like this :
|
|
Expense |
Takings |
|
Consumed purchases of goods (change in stock) Externes expense
Staff costs
Dues and taxes
Depreciation and provisions Other |
Revenue | |
|
Operating profit |
Right Column – Left Column |
|
| Financial charges (interests…) | Financial income (interest received, investments…) | |
|
Financial result |
Right Column – Left Column |
|
|
Outstanding charges
|
Exceptional products :
|
|
|
Outstanding result |
Right Column – Left Column |
|
|
Result |
Operating result – Financial result – Outstanding result |
|
The investment budget
This is the consequence of the investment plan. It will correspond to the different envelopes given to the managers of the services in charge of planned investments, and allowing it to carry out the projects. This envelope is valid for the year.
The operating budget
This is the consequence of the income statement. These are the envelopes given annually so that service managers can meet their general objectives.
The cash budget
This is the synthesis of the different financial flows (collection and disbursement) :
|
Cash receipts |
Disbursements |
|
|
The interest of this budget is to follow movements month to month to anticipate downturns and problems of “cash”. As a result, it is necessary to be able to identify payment deadlines for cash receipts or disbursements to improve the accuracy of the valuation.
