Whatsyouridea1996 您說呢?!: [#BusinessManagement] #Startup, #Authorization, #Budgeting, #Forecasting, #InternalControl, #Project, #Change, #Integration (4/5)

Saturday, May 11, 2024

[#BusinessManagement] #Startup, #Authorization, #Budgeting, #Forecasting, #InternalControl, #Project, #Change, #Integration (4/5)

7. Share: 1 form that must be used in integrating the work processes.

1) Integration, starting from work organization.

To be short:[In companies of a group (it means legal entities, rather than a work department)], they integrated their work organization, they integrated most part of their overall work processes!

Do you believe this?! What’s your idea?

Take Taiwan environment as the example, if a company or a (non) profit business unit is legally registered in Taiwan, the Government would issue a [Tax Number] for tax purpose, in another aspect, if it is a [company], it will receive another [Uniform Number(Business ID Number)]. [Uniform Number] is used in below explanation.

General and reminder, examples:

HQ= headquarter

S= subsidiary

E=Executive

VP= Vice President

There are many overseas subsidiaries of a Group HQ, CEO of a subsidiary is named as [S+ country code +CEO].Today, HQ assigns a HQ[manager person](named as: HQManager) to be the CEO of country T (work title: STCEO) responsible for overall business work outcome in T, exercising all the rights and obligation on behalf of this company; HQManager, in HQ, his/her direct manager ( job title is also the name) including HQDirector, HQVP, HQEVP, and HQEVP’s manager : HQCEO and HQChairman.

Please answer: HQCEO would like to hold a Group CEO meeting, and HQCEO’s assistant will send email invitation to all the CEOs, including STCEO. Does these meeting invitation recipients need to include HQDirector, HQVP and HQEVP?! Why?!

Please refer to the tab [Organization Integration Chart] of the file and see below explanation; and if you would like to adjust the content of the integration chart, please consider below wording in pink first, and revise all related color and the columns accordingly:

In management policies in HQ, there are some rules,

i. All the CEOs in this Group = are authorized as the legal representative of the company of each uniform number.

ii. Manager and above work level persons are allowed to sign contracts and make effective, they can exercise the rights and take obligation on behalf of the company externally.

iii. In all the companies in this Group, it must be Manager and above work level persons to sign contracts on behalf of the companies with external parties, work in the role as a member of the Board of Directors of HQ or subsidiaries.

iv. All the work unit in this Group, its [cash flow], [inventory flow], [data flow], their work objectives need to follow and make alignment with the objective under the uniform number.

Emily’s response to those questions and work practices: [Manager work level persons] is not appropriate, and it is not work capability issue, it is a problem of work level and work organization; because, usually in HQ, they want STCEO to report to at least HQDirector, HQVP, or, STCEO needs to get specific work approval by some kind of department under this Group before they act, HQ didn’t really authorize work power to STCEO to take the overall work rights and obligation in T. HQ needs to clearly define actual work processes and written work policies alignment, the reporting lines of subsidiaries managers before formally answer this question.

2) To integrate [work behavior], and please answer you would like to integrate the [needs], or, the [supplying]? This kind of idea is able to help to clarify what kind of work effects or efficiency the company hope to get. However, in below cases, you will find there are two sides in one thing when defining work integration and the needs and supplying:

i. Integrating the needs:

- Above shared the [Central Procurement] is an example.

- To integrate [financing needs] and [foreign currency needs ] of the companies in this Group, and to centralize and enlarge the negotiation power striving for preferential terms from Bank and for standardizing work procedures.

- Subsidiaries employees purchase/invest parent company’s stock work procedures.

These are things I’ve experienced and things I know for your reference.

ii. Integrating the supplying:

- In above integrated needs, hence, the supplying must be integrated in order to obtain the work efficiency or work effectiveness from those integrated needs, what do you think?! For example:

a.Banks: usually, the HQ would like to work with their local bank who has already had subsidiaries worldwide to support its Group’s subsidiaries needs globally; thus, besides above mentioned financing and exchanging rate, the HQ company would like to request for bank service about internal controlling in their e-Banking payment and cash receiving, it can centralize its Group internal needs in order to talk to Bank’s HQ directly. Because, if this Group works with banks of overseas’ subsidiaries’ location, those banks may need to request for approval from their HQ bank for system support and there is waiting time.

b. Law firms, accountants firms, office agents or human resources service firms etc. Besides HQ centralizes the arrangement of those professional service providers, it is also advised HQ could define the required service qualities or terms and allow subsidiaries to propose potential service providers for HQ consideration.

c. Centralizing accounting works, I’ve already shared my opinion in [ReadersSay], I suggested not doing it. The most suitable way for your Group, please consider those opinion of work owners (=your Accounting Department) and users(other employees who frequently need to interact with accountants). For reference: in order to prevent from finance statement numbers manipulation, there are companies decided to centralize their accounting work.

d. Actual cases: because the specific work volume is big, in some companies, they centralize those specific internal service works from all the subsidiaries and to establish an independent professional service work company, or, they just build up another company to provide the service to the Group and also to external companies. For example: an account receivables collecting company, a software firm, a recruiting firm and a logistic service company etc.

e.There is something you know and I love to watch 👉 A multinational brand launches a new product and has a TV commercial to provide its subsidiaries in various countries and play at a specific time in local TV channels.

What kind of work integration does your Group need?!

What is the purpose?!

8. Because money is very important, use [internal control] in finance and accounting work operations to explain the internal control issues when establishing subsidiaries/business expansion. (Please answer first: In addition to morality and conscience, why should the CFO of the subsidiary need to obey the finance and accounting work instructions from HQ?!)

About the [dotted line], I’m not the creator, it is a kind of professional knowledge with kinds of description, please search what you need on internet, I call it: 911/119 urgent reporting ilne, a reporting line for [CFO] reporting to [Finance Director of Board of Director] regularly, a line for requesting for approval or approver line for Group bookkeeping/entry adjustment, the purpose is to ensure finance and accounting work independently.

I would like to share with you about things happened to me, I’m not teasing, I’m just describing a situation seriously for your considering: one of my former employer hired a HR external consultant (her work background is CHRO of a US listed firm, TW listed firm)coaching me HR related work affairs, I learned this dotted line knowledge in work organization accordingly; however, after I changing jobs, there were no HR colleagues know this dotted line things. Some think I was creating troubles, some agreed and added the dotted line in the chart only, nothing changed in our management work environment or none been put into discussion about it, in the work environment, only I know this dotted line can support the finance and accounting work independently and directly reporting to the Board of Directors and its importance. We usually found a Group defines its subsidiaries’ CFOs report to those subsidiaries’ [General Managers] which are defined as sales [job type], thus, these kind of accounting and finance works are not independent, it results in I encountered related work fraud/fake finance statement number things; will it happen in your Group?!

Pleaserefer to this article: [#WorkEthic #Integrity] No matter how difficult it is,we shouldn’t work against things of the righteous( many words…)

If you agree above description in purple with yellow and plan to include it into your formal work procedure, please remember to inform your new-hired CFO of the Group/company their reporting line through your new-hired orientation in order to avoid possible missing information due to people changes; in my work experience, it was me the new hired CFO+ internal control mechanism was not strong in that Group, and its finance work instruction was always help up by the General Manager, the General Manager issued fake information and said it was I doing it 👉there was lack of attainable internal control in finance and accounting work organization and caused fraud, this kind of situation do exist.

Topic of this paragraph: a procedure for requesting for approval or approver work procedure for Group bookkeeping/entry adjustment – take managing a subsidiary as an example -

(1) Work affiliation between the subsidiary CFO and subsidiary CEO: there are some Groups define their CFO report to CEO, there are also Groups define these two managers as work partners, just like its HQ sales manager and finance manager being assigned to work together at its subsidiary. For your reference.

(2) The CEO of the subsidiary surely can/must know the whole information of their finance statements show because CEO needs to be responsible for its overall operating work results; thus, even if HQ suddenly gives work instruction of accounting entry adjustment regardless the work procedure, the CFO of the subsidiary needs to ensure this CEO knows it.

(3) Regarding accounting entries adjustment due to the difference between GAAP and IFRS, or, because of any kind of reasons, there are persons want to adjust accounting entries, however, it doesn’t follow related accounting principles…etc., they need to prepare written request for approval (regardless the requesters), and the approver should be HQCFO or responsible work department( this role is listed in Level of Authorization and announced).

Besides above using work organization to ensure the work independence of accounting work procedures and enhance the transparency of finance information, there are also companies dealing with these issues by designing related salaries structure, that is the CFO’s salary and benefits, all or part of it is paid by the company the CFO is working for, or, some use Group expense allocation rule to manage finance and accounting work expense to ensure their work independently and will not be challenged and affect its independency; for your reference.

Relatively, there is HQ or subsidiary CEOs say, though, they agree the purpose and the way of above CFO’s dotted line reporting line management, however, obviously, [subsidiary CEOs are not respected, they are doubted, it is like they lose the rights of managing the CFOs] 👈 this kind of situation happened before, how to deal with it?!👈(1)Please be advised to ask this kind of subsidiary CEO to share another way to ensure the work independency of subsidiary finance and accounting works + achieving finance information transparency purpose at the same time (2)this kind of subsidiary CEO is considering their own personal management rights rather than overall work organization management purpose, I suggest your Group to ignore this kind of need or provide this kind of employees with related work training of management awareness, or….seeking for some other work candidates whose management idea is aligned with the Group’s work spirit. What’s your idea?!

Regarding dotted line reporting line, my learning and work experience:

When we feel the way others dealing with thing is weird, maybe, it is because our own experience is not enough, so we feel it is weird, the problem is ourselves rather than others!

Vice versa!

The person who asks [why?] is the learner, not the teacher.

Do you agree?!

9. Only companies that need an e- approval platform and need [approval records] and [approval efficiency] should read this.

This is a reminder I would like to raise for companies that would like to establish their Request for Approval eWorkFlow to consider below issues:

1) To encourage your employees to do oral communication with each other before, using this e approval, it will increase approval work efficiency and avoid the possibilities of their misunderstanding each other causing from using this e-platform.

2) Though, there is Level Of Authorization for your defining the system approval work flow, however, in the system, if it allows those direct managers of the requester are able to cancel or define carbon copy recipients, or, to define a higher required approver, it can increase its work feasibility.

3) Due to 2), once 2) is confirmed and approved in the platform, I suggest it can be defined an auto early notice to inform all involved recipients to choose for their reviewing the request content in advance or not and having an early discussion or not.

1. What is Project, what is Risk?! Who can serve as the project manager?! Does Risk mean Danger?

2. How the founders can authorize hired managers appropriately so that the managers will not overstep their authority without approval?!

P01-P02 https://whatsyouridea1996.blogspot.com/2024/03/startups-plan-control-integrate-eng.html

3. What is the connection among the operating plan (business plan and financial model), budget, forecast and business analysis?! Are they just putting the same number in different places, right?!

P03 https://adv1996.blogspot.com/2024/05/startups-plan-control-integrate-eng03.html

4. According to 3., what information does the Business Analysis (BA) provide for the [Business Review Meeting] (BRM)?! (suggestions including 4 charts: Achievement and Trend Report, Cash Flow Control Chart and Sales Analysis, [Early Warning, Opportunity and Action Progress Summary])

5. Change and integration are also project-based work; please define OO first. What do you think OO is?!

6. For example: to change corporate work culture, the difficulty may come from people who have management power= people who want to change the work culture, it is possible.(This may differ from your company's corporate culture or environmental perception)

P04-P06 https://whatsyouridea1996.blogspot.com/2024/05/startups-plan-control-integrate-eng04.html