Page 45 - Initial Public Offering - An Introduction to IPO on Wall Street

4.3.2 Finance Effectiveness

Aspiring IPOs must evaluate their capacity of public company finance reporting resources.
Those in charge of finance should analyze their company and ensure that a framework is in
place to fulfill the specific needs of the stakeholders.

In addition to the conventional back-office position, finance personnel and programs must be
equipped to fulfill the need and demands of new external stakeholders, including heightened
standards of accountability and data accuracy, strict budget monitoring and forecasts, and rapid
filing.

Public company experience and professional accounting skills need to be a priority when
recruiting and building expertise. Facilitating mature processes and technologies in the finance
organization would help ensure that financial assets can provide value-added insight rather than
just collect data.

Enhanced communication and coordination greatly improves the ability to handle challenges
promptly and prevent surprises. Straightforward duties and the ability to easily exchange
information and level of success are important due to the rapid timetable and the amount of
dependent measures for public company disclosure.

The biggest companies are using technology for collaboration and workflow to boost
transparency, interaction, and control. In addition to the above, aspiring IPOs need to setup
regulated and expedited close cycle. Beyond meeting new and ramped up external disclosure
requirements, an efficient and intelligent close-to-report cycle provides a basis for performance
evaluation and strategic decision assistance.

Organizations, rather than just focusing on speed, should concentrate on efficiency,
transparency and achieving accuracy the first time. Concentrating on only speed often ends in
a close period followed by a series of changes and rework post-closure. To increase the
consistency and promptness of the end-to -end cycle, various critical interventions should be
utilized including the following:

 Simplifying the cycle by ordering work steps correctly and removing the inefficiencies,
non-value added practices, and excess effort;
 Sequencing related activities and sharing time-consuming tasks to prevent repetition and
excessive downtime; and

 The simplification and standardization of procedures to remove needless ambiguity and
incoherence

For finance effectiveness, it is also important that aspiring IPOs utilize data and technologies
to that integrate planning, analytical, and monitoring capabilities. Efficient reporting needs a
great deal more than analyzing past results. To develop their forecasting capabilities, businesses
need to know how they do against anticipated outcomes and key factors affecting any deviation.

Setting up clear concepts and standard data formats provides a framework which can greatly
reduce the amount of time spent gathering data, reconciling it, and recognizing deviations.
Manual task automation and the standardizing of data flow will boost efficiency, accuracy and
punctuality.

Page 45