Beyond the Balance Sheet: Using OneStream for Operational Job Reporting
This article is part of a multi-part series on Modern Finance by Spaulding Ridge. Spaulding Ridge helps organizations adopt best practices of Modern Finance in part by replacing disconnected spreadsheets with integrated systems that automate business processes such as financial close & consolidation, account reconciliation, budgeting & forecasting, and financial/operational reporting. Modern Finance techniques enable corporate leaders to turn financial data into a competitive advantage through improved analytics, accuracy, and visibility.
For years, Corporate Performance Management (CPM) systems have done a decent job of consolidating monthly trial balances and producing a set of financial statements. Indeed, almost any CPM system is better than a manual, spreadsheet-driven process. Many CPM systems work by organizing financial data into ‘dimensions’ such as account, scenario, period, and entity—and then allowing users to slice the data along those dimensions. The result is a tidy way to generate monthly financial reports including the holy trinity of income statement, balance sheet, and statement of cash flows.
Operational reporting represents a different set of challenges. Unlike financial reporting which is governed by strict rules and guidelines, operational reporting is for internal use only and is completely open-ended, which makes data synthesis and analysis much more difficult. Also, operational reporting does not always sync neatly with financial periods (month, quarter, year). Instead, operational reporting might span multiple periods and might begin or end in the middle of a fiscal period. Finally, operational reporting often contains data that is not easily organized into dimensions.
One such challenge with operational reporting is detailed job reporting. Project-based industries such as Engineering, Construction, or Professional Services rely heavily on this type of reporting to determine job-level profitability. However, revenue and job costs can be owned by different project managers and business units – and may include intercompany transactions. Larger companies can have thousands of active jobs which can make it very difficult to manage the data on disjointed spreadsheets. And jobs can have lots of detailed data that drive job costing calculations.
Spaulding Ridge recently delivered a project for a company in the Offshore Oil & Gas industry that needed accurate and timely operational reports and analysis for long-range engineering projects. These projects are build-to-order industrial systems that include a complex combination of engineering and design services, off-the-shelf parts, custom fabrication, and assembly. In addition, the client wanted to leverage a single system to support job reporting and traditional financial reporting.
Spaulding Ridge selected use of OneStream Software for this project because of the unique features of the platform. As a leading CPM vendor, OneStream is well-known for its consolidated financial reporting capabilities. Financial intelligence, data quality, and intercompany functionality made it a natural choice for the financial close. However, other key features made OneStream a great fit for operational job reporting as well. Extensible dimensionality allowed this client to leverage a single system to meet the needs of both financial reporting and job reporting. Relational blending allowed the client to keep detailed job data in a relational database, while bringing key metrics into the cube. And OneStream’s audit trail (normally used for financials) was used to monitor who made updates to job status for a given job.
Using OneStream for Operational Job Reporting yielded additional benefits. Simply automating the data collection process and making it part of the monthly close process resulted in more consistent data. Previously, the process was completed manually on multiple spreadsheets along with a tedious list of macros and steps to import the correct data. Having the data in OneStream also allowed the client to conduct deeper and more meaningful analysis by job, compared to the old spreadsheet method. Previously, operational reporting on various projects could only be achieved at a very shallow level using filters or pivot tables. Within OneStream, the calculation of KPIs is automated, making detailed job analysis possible in a straightforward, easy to view solution. Finally, job reporting (unlike financial reporting) is not time-driven and can be run independent of the monthly ‘record-to-report’ cycle.
Practitioners of Modern Finance know that CPM systems have all kinds of benefits to the financial close function. However, a best practice of Modern Finance is extending those benefits beyond the financial close. OneStream XF (extensible finance) allows clients to extend the benefits of CPM to areas beyond the Balance Sheet, and offers features that are very useful when applied to operational job reporting and analytics. With OneStream, users can link financial and operational reporting, automating many manual business processes along the way and storing all the information in a single platform.