Controller's Report
Controller’s Report one of IOMA’s most respected publications, aimed at corporate controllers in companies of all sizes. Provides benchmarks on virtually every cost area controllers are responsible for (in the Staying Current section), along with articles on FINANCIAL LEADERSHIP, and KEEPING CONTROL, which show by interview or case study how controllers are contributing to the financial stability and growth of their companies. Now available in an exciting 2-color format, 20 pages, with a monthly Profile that details the achievements of a particularly successful financial executive and gives readers insights into duplicating that success.
August 2009 - Table of Contents
A distribution of cost increases for preferred provider organization (PPO), point-of-service (POS), health maintenance organization (HMO), and high-deductible consumer-driven (HDCD) health plans is available in the associated table. Developed by Buck Consultants and published in its newest National Health Care Trend Survey, this table reflects medical care cost increases that took effect in the first half of 2009, according to HMOs, Blue Cross Blue Shield plans, and pharmacy benefit managers. Key point: The table will help most controllers evaluate the 2009 health plan cost increases of their employers.
Current benchmarks for audit fees are available to controllers in Audit Fee Survey 2009, a study from the Financial Executives Research Foundation (FERF). Overall, this study, which captures auditor fees at 110 public and 245 private companies, shows that average audit fees are substantial, even though they rose only slightly last year.
Exercising Leadership: How Controllers Alleviate Hidden Costs in Outdated Working Capital Strategies
In the downturn, most controllers have worked closely with their CEOs to identify and eliminate nonessential costs. In this way, they have helped their companies avoid the fates of General Motors and Chrysler, where cash flow fell behind expenses.
The associated figure provides benchmarks for average commissions and average fee-based compensation that companies pay to their property and casualty (P&C) brokers. Developed by the Risk Insurance Management Society and published in its 2008 RIMS Benchmark Survey, the figure compares fees and commissions as a percentage-of-premium for brokers carrying 12 lines of P&C coverage.
8th ANNUAL ACCOUNTS PAYABLE CONFERENCE & EXPO¨ 2009: Oct. 14-16, Orlando, Fla., www.accountspayable360.com/apconf09.
CONTROLLERS WORKSHOP: FINANCIAL ISSUES: Aug. 3, San Francisco. Contact: www.calcpa.org
THE CONTROLLER’S JOB IN TODAY’S ENVIRONMENT: Aug. 5-7, Chicago. Contact: www.amanet.org
TAKING ACTION WITH LEAN ACCOUNTING: Aug. 13, Orange County North, Calif. Contact: www.calcpa.org
AICPA’S ANNUAL UPDATE FOR CONTROLLERS: Aug. 17, Atlantic City, N.J. Contact: www.njscpa.org …
To reduce their workforce costs during the recession, companies are now increasingly relying on salary freezes or pay reductions, not layoffs. This is a critical finding of a new survey, which CR has summarized in the associated table.
Many controllers say that their relationships with their banks, as well as the prices that banks are charging for their services, have changed in the recession. Here, they say that many banks, especially those with weak balance sheets, are backing away from their corporate clients, claiming that even plain-vanilla working capital loans now look risky. The fact that most banks have downsized, replacing long-term relationship managers with cautious new bankers, has only intensified this reluctance to lend.
Salary and Hiring Freezes in 2009’s Final Quarter: New Details How Budgeting Changes in the Recession: Benchmarks and Best Practices How Much Do Companies Spend to Make a Sale? 2009 Metrics Fees for Pension Plan Administration by Asset Type and Size Restructuring to Balance Costs and Revenue: Yardsticks for 2010 Manufacturing Benchmarks in the Recession: Turns, Costs, Overhead, and R&D Charges and Covenants in Current Loan Agreements: How Banks Raise the Cost of Borrowing…
To reduce costs, 29 percent of companies have modified, or intend to modify, their contributions to their 401(k) plans during the 2009 plan year, according to a new survey by Grant Thornton. But among these organizations, modification is actually a euphemism for eliminating the match (67 percent). Meanwhile, 22 percent are reducing their matches and an amazing 11 percent actually plan increases, despite hard times.
Preferred provider organization (PPO) costs for large employers (those with 500 employees or more on staff) were $7,861 in 2008, up $432 (5.8 percent) from $7,429 in 2007. Frame of reference: This PPO cost per employee increased $400 (5.7 percent) in 2007 from $7,029 in 2006, $511 (7.8 percent) from $6,518 in 2005, and $337 (5.5 percent) from $6,181 in 2004.
Combat Cost Rises for Medical Benefits by Increasing Cost Sharing
Challenge: Adjust benefits levels to lessen effects of sharply rising costs.
Action: Our company increased cost sharing and reduced certain benefit levels, particularly for those who elect to obtain medical service outside our preferred provider organization network. In addition, we increased our office visit copay to $25 and our prescription drug copays to $12 for generic, $27 for formulary brand name, and $45 for nonformulary…
A frame of reference for evaluating plant costs at manufacturers is available to controllers in the two associated tables. Developed by Grant Thornton and published in its study 2008 Great Lakes Manufacturing: Report on Operations, these tables show plant costs by quartile and average for 431 facilities, 158 located in the Great Lakes region. Upshot: These tables provide points of comparison for controllers and their CEOs at all manufacturers as they adjust their cost structures during today’s downturn.
In today’s difficult economy, pricing for property and casualty (P&C) insurance has remained among the few bright spots for CR readers. Reason: While revenue declines have forced most companies to shed costs through employment reductions, salary freezes, and project cancellations, prices for P&C insurance have declined on their own.
Controllers who work at retailers may find value in a new case study developed by the Aberdeen Group, an IT research operation. This case study quantifies the improvements in inventory turns and the reduction in inventory costs that New Look, a fashion retailer in the United Kingdom, achieved by upgrading its inventory replenishment system.
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