Throw Away Your Financial Statements: Managing by Metrics
Charles Chewning Jr. - September 15, 2005

Introduction

Accounting systems have always had two primary goals: track information in detail and generate financial and operational reports. Until recently it has not been technologically possible to do anything else., except process information, create invoices, pay invoices, pay employees, track costs, and generate financial statements at the end of the month. That's fine, but the problem is that financial reports are sometimes generated forty-five or more days after a fiscal period begins and the information they present must, out of necessity, start at the highest, most general level. If the results are below or even above expectations, additional reports may need to be generated and studied in an attempt to determine what went wrong or right. In addition, the factors contributing to poor financial results may have started their downward trend at the beginning of the fiscal period and will therefore still be creating problems forty-five or more days later. I use the word "later" because the drill-down analysis will require several days if not weeks to complete, once the financial statements have been published...