--- title: Top 10 Tips to Effective Financial Evaluation in S&OP description: Top 10 tips for the FMCG Financial Evaluation Process in S&OP; a key feature of the Enchange Supply Chain House. image: https://supplychain.enchange.com/hubfs/fmcg-sop-finance-feature.png --- [Login](https://www.enchange.com/login/) - - - - [![Enchange](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/logo.png)](https://www.enchange.com/) # Route to Market & Supply Chain Blog # Top 10 Tips to Effective Financial Evaluation in S&OP Posted by Dave Jordan on Wed, Aug 11, 2021 - [Tweet](https://twitter.com/share) The [Enchange Supply Chain House](https://www.enchange.com/services/supply-chain-transformation/); the one-stop shop for the elements you need to achieve supply chain excellence. In successful FMCG companies, Sales & Operational Planning (S&OP) is the flexible glue that holds your processes together, ensuring demand and supply are balanced along the chain and most importantly, sees everyone operate to the same set of unambiguous sales, volume and financial numbers. Operational plans must be subjected to rigorous financial evaluation as part of a fully functioning S&OP. This is not additional work for the finance teams, just working smarter. ![fmcg-sop-finance-in-post](https://supplychain.enchange.com/hs-fs/hubfs/fmcg-sop-finance-in-post.png?width=336&name=fmcg-sop-finance-in-post.png) ### Top 10 Tips – Financial Evaluation 1. Financial Evaluation Policy. Is there a concise, written policy for financial planning, measurement and reporting that covers the process, purpose, activities, participants and expected results? Is ownership of the policy abundantly clear and routine reviews are carried out at a senior level, and documented? 2. Financial Evaluation Process & Procedures. Do effective and documented procedures exist that define financial planning, measurement and reporting and their relationships within S&OP? Are the required inputs defined in easily understood and precise terms? Are outputs (e.g., management reports) concise, defined and accepted as meeting the data, information and decision making requirements of S&OP process owners and users? 3. Financial Projections & Reporting. Are the financial projections developed within S&OP very closely linked to company operating plans? Are differences between the two reconciled monthly and updates are used as the current measure of financial performance? In reality, are annual financial budget updates accurately represented by the latest monthly S&OP financial evaluations? 4. Source Data. Is there one, definitive source of data for all departments? Does the finance department use precisely the same data for sales, purchases, shipments, inventory and any other operational data and information from the ERP system? 5. Financial Systems. Do you still use ‘under the radar’ spreadsheets? Are all financial systems (e.g. invoicing, purchasing, accounts receivable, accounts payable, inventory) fully integrated with transactional systems? 6. Cash Flow. Do you monitor cash flow on a monthly basis? Is cash flow prepared using source data directly from the ERP system? Does cash flow cover the S&OP planning horizon? Is cash flow reviewed on at least a monthly basis and updated as required? 7. Scenario Analysis. Are simulation tools actively used to convert operational data into financial information quickly for the purposes of ‘’what if’ scenario analysis, simulation testing, decision making and contingency planning? 8. Materials Receipt & Inventory. Are purchasing, materials receipt and accounts payable fully reconciled within the transaction and ERP systems? Is inventory counted frequently either by cyclic or periodic checks? Is the materials inventory accurate, fully visible and reconciled? 9. Inventory Movement & Work in Progress. Where work orders are used, are work order closing transactions used to record the movement of inventory from one account to another in the general ledger? Does this also generate variance reports for cost accounting purposes? 10. Finished Goods Inventory. Do customer order shipment transactions drive the updating of finished goods inventory and the invoicing transaction system in real time? Is there full, current and accurate visibility of finished and intermediate goods inventory as recorded by the ERP system? Financial colleagues often feel the wrath of CEOs when unexpected financial information is presented. However, they are simply reflecting the reality of the efforts of the wider S&OP team. CEOs may not like what they see but if you are well prepared on items 1-10 above, you will be presenting a robust snap-shot of the true, operational financial health of the company. Read more articles on [Supply Chain Excellence ](https://www.enchange.com/services/supply-chain-transformation/)and [Route To Market](https://supplychain.enchange.com/20-steps-to-rtm-excellence-blog-posts-by-ross-marie) on our website where you can also subscribe to our frequent updates. Finally, feel free to [use any of our contact routes including Live Chat](https://www.enchange.com/contact-us/), if you have any questions about how the Enchange Supply Chain House can assist your journey to supply chain excellence.     Tags: [Dave Jordan](https://supplychain.enchange.com/topic/dave-jordan), [S&OP](https://supplychain.enchange.com/topic/sop), [Supply Chain House](https://supplychain.enchange.com/topic/supply-chain-house), [supply chain excellence](https://supplychain.enchange.com/topic/supply-chain-excellence), [finance](https://supplychain.enchange.com/topic/finance) ### Subscribe Here! ## Implementation Guide - 20 Steps to RtM Excellence [![cta-20-steps-implementation-guide-1](https://supplychain.enchange.com/hs-fs/hubfs/cta-20-steps-implementation-guide-1.png?width=336&name=cta-20-steps-implementation-guide-1.png)](https://supplychain.enchange.com/implementation-guide-to-20-steps-to-route-to-market-excellence) ## RtM Distributor Assessment Tool [![rtm-distributin-assessment-tool-enchange](https://supplychain.enchange.com/hs-fs/hubfs/rtm-distributin-assessment-tool-enchange.png?width=336&name=rtm-distributin-assessment-tool-enchange.png)](https://supplychain.enchange.com/analyse-the-performance-of-your-distributors---free-route-to-market-assessment-form) ## Distributor Assessment Guide [![distributor assessment guide-2](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/distributor%20assessment%20guide-2.webp)](https://supplychain.enchange.com/distributor-assessment-guide) ## 3rd Degree Partnership Guide [![3rd degree partnership download](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/3rd%20degree%20partnership%20download.webp)](https://supplychain.enchange.com/implementing-third-degree-partnerships-guide) ## Indirect Distribution: FMCG  Distributors vs. Wholesalers [![cta_ditributor-wholesale-download_sidebar](https://supplychain.enchange.com/hs-fs/hubfs/cta_ditributor-wholesale-download_sidebar.png?width=336&name=cta_ditributor-wholesale-download_sidebar.png)](https://supplychain.enchange.com/indirect-distribution-fmcg-distributors-vs.-wholesalers) ## 8 Steps to Drive Distributor Excellence ![cta-8-steps-distributor-excellence](https://supplychain.enchange.com/hs-fs/hubfs/cta-8-steps-distributor-excellence.png?width=336&name=cta-8-steps-distributor-excellence.png)   [![awrad](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/Supply-Chain-transparent_216px.png)](http://blog.feedspot.com/supply_chain_blogs/) ### Connect with Enchange Online ### Posts by Topics - [Dave Jordan (432)](https://supplychain.enchange.com/topic/dave-jordan) - [FMCG (386)](https://supplychain.enchange.com/topic/fmcg) - [Supply Chain (249)](https://supplychain.enchange.com/topic/supply-chain) - [S&OP (226)](https://supplychain.enchange.com/topic/sop) - [Route to Market (202)](https://supplychain.enchange.com/topic/route-to-market) - [Forecasting & Demand Planning (177)](https://supplychain.enchange.com/topic/forecasting-demand-planning) - [Performance Improvement (175)](https://supplychain.enchange.com/topic/performance-improvement) - [Distribution (141)](https://supplychain.enchange.com/topic/distribution) - [Traditional Trade (114)](https://supplychain.enchange.com/topic/traditional-trade) - [Sales (112)](https://supplychain.enchange.com/topic/sales) - [CEO (111)](https://supplychain.enchange.com/topic/ceo) - [Inventory Management & Stock Control (105)](https://supplychain.enchange.com/topic/inventory-management-stock-control) - [Humour (94)](https://supplychain.enchange.com/topic/humour) - [Brewing & Beverages (88)](https://supplychain.enchange.com/topic/brewing-beverages) - [Michael Thompson (88)](https://supplychain.enchange.com/topic/michael-thompson) - [Pharma (84)](https://supplychain.enchange.com/topic/pharma) - [RTM Assessment Tool (83)](https://supplychain.enchange.com/topic/rtm-assessment-tool) - [RTM (77)](https://supplychain.enchange.com/topic/rtm) - [RtM Strategy (74)](https://supplychain.enchange.com/topic/rtm-strategy) - [Logistics Management (71)](https://supplychain.enchange.com/topic/logistics-management) - [CEE (67)](https://supplychain.enchange.com/topic/cee) - [Ross Marie (64)](https://supplychain.enchange.com/topic/ross-marie) - [20 Steps to RtM Excellence (63)](https://supplychain.enchange.com/topic/20-steps-to-rtm-excellence) - [Customer service (63)](https://supplychain.enchange.com/topic/customer-service) - [KPI (61)](https://supplychain.enchange.com/topic/kpi) - [SKU (57)](https://supplychain.enchange.com/topic/sku) - [Logistics Service Provider (48)](https://supplychain.enchange.com/topic/logistics-service-provider) - [Cost Reduction (37)](https://supplychain.enchange.com/topic/cost-reduction) - [Retail (37)](https://supplychain.enchange.com/topic/retail) - [Supply Chain House (36)](https://supplychain.enchange.com/topic/supply-chain-house) - [supply chain excellence (35)](https://supplychain.enchange.com/topic/supply-chain-excellence) - [Doing Business in Africa (31)](https://supplychain.enchange.com/topic/doing-business-in-africa) - [ERP/SAP (30)](https://supplychain.enchange.com/topic/erp-sap) - [Supply Chain Analytics (30)](https://supplychain.enchange.com/topic/supply-chain-analytics) - [Christmas (28)](https://supplychain.enchange.com/topic/christmas) - [Integrated Business Planning (28)](https://supplychain.enchange.com/topic/integrated-business-planning) - [The ABC of RtM (27)](https://supplychain.enchange.com/topic/the-abc-of-rtm) - [Interim Management (22)](https://supplychain.enchange.com/topic/interim-management) - [Promotions (22)](https://supplychain.enchange.com/topic/promotions) - [Manufacturing Footprint (18)](https://supplychain.enchange.com/topic/manufacturing-footprint) - [IT (12)](https://supplychain.enchange.com/topic/it) - [3PL (10)](https://supplychain.enchange.com/topic/3pl) - [Information (10)](https://supplychain.enchange.com/topic/information) - [Order to Cash (10)](https://supplychain.enchange.com/topic/order-to-cash) - [Logistica Management (9)](https://supplychain.enchange.com/topic/logistica-management) - [Mergers & Acquisitions (9)](https://supplychain.enchange.com/topic/mergers-acquisitions) - [Telecoms (9)](https://supplychain.enchange.com/topic/telecoms) - [4PL (6)](https://supplychain.enchange.com/topic/4pl) - [Compliance (6)](https://supplychain.enchange.com/topic/compliance) - [ERP (6)](https://supplychain.enchange.com/topic/erp) - [Transportation (6)](https://supplychain.enchange.com/topic/transportation) - [3PLP (5)](https://supplychain.enchange.com/topic/3plp) - [Communication (5)](https://supplychain.enchange.com/topic/communication) - [Sourcing (5)](https://supplychain.enchange.com/topic/sourcing) - [Keith Marshall (4)](https://supplychain.enchange.com/topic/keith-marshall) - [Outsourcing (4)](https://supplychain.enchange.com/topic/outsourcing) - [Spare Parts (4)](https://supplychain.enchange.com/topic/spare-parts) - [Stefan Cucu (4)](https://supplychain.enchange.com/topic/stefan-cucu) - [Vietnam (4)](https://supplychain.enchange.com/topic/vietnam) - [covid19 (4)](https://supplychain.enchange.com/topic/covid19) - [Balanced Scorecard (3)](https://supplychain.enchange.com/topic/balanced-scorecard) - [DIY (3)](https://supplychain.enchange.com/topic/diy) - [DRS (3)](https://supplychain.enchange.com/topic/drs) - [Digital (3)](https://supplychain.enchange.com/topic/digital) - [Production Planning (3)](https://supplychain.enchange.com/topic/production-planning) - [Ratib Ratib (3)](https://supplychain.enchange.com/topic/ratib-ratib) - [Recovery (3)](https://supplychain.enchange.com/topic/recovery) - [SUPPLY PLANNING (3)](https://supplychain.enchange.com/topic/supply-planning) - [Andy Dixon (2)](https://supplychain.enchange.com/topic/andy-dixon) - [IBP (2)](https://supplychain.enchange.com/topic/ibp) - [Low Carbon (2)](https://supplychain.enchange.com/topic/low-carbon) - [Planning (2)](https://supplychain.enchange.com/topic/planning) - [Private Equity (2)](https://supplychain.enchange.com/topic/private-equity) - [Supply Chain Strategy (2)](https://supplychain.enchange.com/topic/supply-chain-strategy) - [WMS (2)](https://supplychain.enchange.com/topic/wms) - [Warehousing (2)](https://supplychain.enchange.com/topic/warehousing) - [Wholesale (2)](https://supplychain.enchange.com/topic/wholesale) - [Agrochemicals (1)](https://supplychain.enchange.com/topic/agrochemicals) - [Aristide Kouame (1)](https://supplychain.enchange.com/topic/aristide-kouame) - [CONSULTING (1)](https://supplychain.enchange.com/topic/consulting) - [Deposit Recovery Scheme (1)](https://supplychain.enchange.com/topic/deposit-recovery-scheme) - [Dianna Vorpagel (1)](https://supplychain.enchange.com/topic/dianna-vorpagel) - [Dumisani Siziba (1)](https://supplychain.enchange.com/topic/dumisani-siziba) - [Food (1)](https://supplychain.enchange.com/topic/food) - [HR (1)](https://supplychain.enchange.com/topic/hr) - [INNOVATION (1)](https://supplychain.enchange.com/topic/innovation) - [Make (1)](https://supplychain.enchange.com/topic/make) - [Manufacturing (1)](https://supplychain.enchange.com/topic/manufacturing) - [Refillable PET (1)](https://supplychain.enchange.com/topic/refillable-pet) - [Scheduling (1)](https://supplychain.enchange.com/topic/scheduling) - [WASTE (1)](https://supplychain.enchange.com/topic/waste) - [finance (1)](https://supplychain.enchange.com/topic/finance) - [procurement (1)](https://supplychain.enchange.com/topic/procurement) [See all](https://supplychain.enchange.com/top-10-tips-to-effective-financial-evaluation-in-sop#) Enchange Registered office: 2 Piries Place, Horsham, West Sussex, RH12 1EH, UK.   Enchange Limited is a company registered in England and Wales with company number 2862912.  Enchange VAT number: 528 7834 08                                                                                   ©2019 Enchange Ltd. All rights reserved [Privacy Policy](https://www.enchange.com/privacy-policy) [Cookies](https://www.enchange.com/cookie-policy/)