KPMG s Financial Management Practice. kpmg.com

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1 KPMG s Financial Management Practice kpmg.com

2 1 KPMG s Financial Management Practice KPMG s Financial Management (FM) practice, within Advisory Management Consulting, supports the growing agenda and increased responsibilities of the CFO. Our services are aimed at assisting our clients in cutting through complexity and creating sustainable confidence and value in the business. Our methodologies and tools are time-tested across various industries and have consistently demonstrated enhanced strategic value to the finance function. KPMG s global network of Financial Management professionals leverages their deep capabilities in the core drivers of change process optimization, target operating model design and information technology to help organizations transform their finance function to maximize efficiencies and drive business value across the enterprise while seeking to ensure the integrity of the processes and information delivered to key stakeholders. Financial Management professionals help clients align their finance organizations with the strategies and needs of their businesses to realize and sustain value over the long term. With experience serving a broad range of industries, Financial Management helps organizations continually evolve their finance function for the future, transforming its focus from transaction processing and historical reporting to that of a business partner responsible for driving growth and profitability. KPMG s Financial Management practice helps organizations build a finance function for the future. Attaining this transformation requires continuous optimization of the four strategic areas identified, which include: strategic decision support, efficient operations, strategic growth and governance. Financial Management service offerings are designed to enable finance organizations to be a driver for growth and provide key strategic decision support that is efficient and strictly governed with the proper processes and controls. KPMG s Financial Management service offerings include: Finance Strategy We assist clients in developing strategies to holistically optimize the finance function, driving transformation across the enterprise, and creating programs to improve, enhance, and evolve the capabilities of a finance organization. We help clients align their finance function with the organization s overall business objectives and strategies to achieve sustainable business results. These strategies will provide a clear view on the key principles behind the future operating model for the finance function and a detailed roadmap of improvement efforts, required resources and measurements for implementation. Finance Transformation We assist clients in evolving the role of finance from transaction processor and record keeper into a business partner responsible for driving efficiency, growth, profitability and value. Finance transformation helps CFOs to identify and prioritize required change efforts and supports CFOs in defining the optimal operating model that can best support the business, and manage key finance activities more efficiently. Finance transformation seeks to create value by improving transparency, integrity and controls while building and maintaining stakeholder trust. The goals of transformation include enabling the business, increasing profitability, reducing costs and providing timely and accurate insights into business performance.

3 KPMG s Financial Management Practice 2 Financial Management helps organizations build a finance function for the future. We can help the finance function be a catalyst for growth and create value within an organization. The finance function of the future KPMG provides service offerings that fall within each of these four strategic priorities of Finance: Strategic planning Integrated sales, operations and financial budgeting & forecasting Data Analytics Scenario Analysis Turning data into business insight/value-driven analysis Optimize business strategy/execution Business Partnering SUPPORT STRATEGIC DECISION EFFICIENT OPERATIONS Standard Global Processes Process Automation Effective/efficient target operating model Labor arbitrage optimization Common ERP Platform/ EPM tools Simplified business structure (legal entity rationalization) Continuous Improvement Finance S T R AT E G I C G R O W T H M&A/Transaction analysis and support Capital allocation/strategy Investment Analysis Funding strategy Tax planning IPO support Profitability Analysis G O V E R N A N C E Rationalize and monitor controls Centralized management reporting Effective master data governance Task management tracking Process KPIs/Scorecard BPO Monitoring Controls (if using outsourcer) Enterprise Risk Management Policy support Regulatory and tax compliance reporting

4 3 KPMG s Financial Management Practice Finance & Accounting Assessment We assist clients in providing an assessment of their core finance function processes to evaluate and promote better practice delivery to internal and external customers. We assess efficiency, effectiveness, responsiveness, and controls in the areas of finance and accounting. With our structured tools and templates, covering finance function processes and enablers, we can help redefine the finance function and to set priorities for improvement in a relatively short period of time. Finance Benchmarking Our approach to assessing finance organizations enables us to identify key areas for quick improvement. We leverage our proprietary benchmark database of over 700 companies and over 20,000 metrics, along with that from APQC to access detailed information to perform benchmarking. We then put those benchmarks in context by collecting case studies from peer companies. This helps our clients to determine the magnitude of the potential change and create practical recommendations for focus and improvement. Finance Service Delivery Model We assist clients in developing finance service delivery strategies and approaches. KPMG facilitates confirming financial and operational baseline, evaluating alternative target operating model options, developing future-state operating models and preparing a go-forward target operating model. This can include shared services, outsourcing, centers of excellence, as well as what should be retained at corporate and in the business units. Finance & Accounting Process Optimization We assist clients with the optimization of specific finance and accounting processes that often cross multiple business units and operating silos, such as: Financial and management reporting Planning, budgeting and forecasting (Plan to Perform) Record to report Order to cash Procure to pay Fixed asset (Acquire to Retire) Payroll Front, middle and back-office integration Account reconciliations The focus is on delivering optimized global processes leveraging enabling technologies. Finance Governance, Compliance & Controls Finance governance is the discipline, activities and controls that both drive and oversee the record to report process. Finance governance begins with the General Ledger and extends throughout the close cycle incorporating financial consolidations, account reconciliations, variance analysis, regulatory filings (with or without XBRL) and compliance. In the modern market, strong governance over finance processes, people and technologies is an absolute necessity to remain competitive. Our seasoned finance professionals bring tested tools and methodologies to: Providing transparency to close calendars, activities and responsibilities Standardizing business processes to capitalize on software functionality as much as possible, including redesign if necessary Reducing manual processing Utilizing automation to reduce time and improve accuracy of closing process Defining materiality and tolerance thresholds prior to project initiation Striving for continual reduction in cycle-time of the period close process and other key financial activities

5 KPMG s Financial Management Practice 4 Financial Information Management Financial Information Management (FIM) can enable clients to move from static reporting and tactical decision making to the ability to compare and adjust, and ultimately to anticipate and predict (strategic decision making). FIM facilitates easier consolidation of information, more accurate planning and forecasting, and better reporting and management of business performance. We assist clients with data analytics to allow finance to support the business with insight leading to actionable steps. This includes evaluating the processes, identifying data requirements, and determining a mechanism for gathering and delivering the data. Cost & Capital Optimization We help clients examine and improve each dimension of the business that impacts cash production, costs, and working capital resulting in better financial performance and enhanced positioning to seize opportunity in response to market conditions. Specific areas of focus include: Better cash visibility throughout the organization Better alignment of cash, cost, and working capital strategies to business and operational goals Appropriate business metrics around cash, cost, and working capital that drive desired results Improved working capital: Decrease Days Sales Outstanding (DSO) Decrease Days Inventory Outstanding (DIO) Increase Days Payable Outstanding (DPO) Finance Function Integration & IPO Readiness We assist clients with the integration of multiple finance functions across the entire transaction lifecycle related to a merger or pre- or post-ipo. We provide immediate support to meet the first wave of statutory reporting requirements as well as longer-term integration at the financial and accounting data level. Our experience with capturing finance function synergies, reconciling differences, and mitigating risks helps ensure integrated functions will: Meet regulatory mandates in a timely manner Improve the ability to realize the synergies identified for finance Provide timely, insightful performance reporting information for management Reduce complexity and increase efficiency by streamlining and standardizing financial processes

6 5 KPMG s Financial Management Practice Case Study: Chemical Company Global Finance Transformation Assessment What KPMG did Coordinated and conducted a global assessment to frame cost of Finance delivery in the current state (required developing data collection and maturity assessment templates and interview guides to effectively source accurate and detailed data) Developed detailed enterprise business case that profiled current-state costs and potential cost savings achievable through potential alternate service delivery and operating model Developed a high-level roadmap to execute on the business case Conducted detailed location analysis based on defined operating model criteria and requirements Developed guiding principles to support design of multiple future-state operating models inclusive of a high-level retained function and staff requirements Initiated a detailed enterprise change management and communications plan as a result of stakeholder analysis Developed and advised on a European Works Council consultation strategy Motivating factors This multi-billion dollar company recently emerged from bankruptcy and also had not conducted a thorough post merger integration effort. As a result, it wanted to streamline costs and optimize operations within its Finance function. It had fragmented processes, operations, and services from region to region and country to country across the enterprise operations globally. The client engaged KPMG to assess its current-state Finance function, including the current service delivery model and cost of operations, in an effort to improve and standardize performance, drive efficiency and effectiveness, and reduce costs. Key results Projected potential savings of $80 100M NPV over five years with a payback period of less than three years Projected NPV included potential savings from: Labor arbitrage Process efficiencies and automation Infrastructure efficiencies Reduced management cost Potential productivity gains from service delivery partner Recommended alternate service delivery model aligned to the overall business objectives of operating a centralized, harmonized and standardized global Finance function The KPMG team has demonstrated the commitment, dedication, and adding value mindset that has now become the benchmark for support within our organization. KPMG Financial Management Client

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8 Contact us US Leader Financial Management Donald M. Mailliard Principal, Advisory Certain of the services described herein are not permissible for KPMG audit clients and their affiliates. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International NSS