Closedloop Update Helps Align Expenses And Revenue

Keeping expenses in line with expected revenue may be a finance manager's trickiest job. Financial-management application vendor Closedloop Solutions Inc. this week is debuting its Dynamic Financial Control forecasting and budget-planning software that strengthens the links between a company's revenue projections and spending plans.

In most companies, creating revenue forecasts and managing expenses are separate functions performed by different operations. Sales managers may create sales forecasts while budget planners, financial controllers, and production heads control spending. That can lead to serious disconnects, says AMR Research analyst John Hagerty. "That was the No. 1 issue that people complained about," he says, referring to the findings of a recent AMR survey of budget planning directors at 30 companies. "People thought they were flying blind."

Closedloop's Dynamic Financial Control software consists of individual applications for revenue forecasting (TopLine Manager) and expense forecasting and budgeting (SpendCap Manager), as well as reporting and analysis tools and application-integration technology.

But in release 3.5, due for general availability next month, the revenue- forecasting and expenditure-management apps are more tightly integrated. The new links allow revenue projections to be shared with financial managers, improving a company's ability to increase or cut spending in response to forecasts and quickly steer financial resources to new revenue opportunities.

Closedloop's software allows for "an intense level of financial coordination," Hagerty says. While other financial software products help managers share revenue and spending forecasts, Dynamic Financial Control 3.5 goes further by providing managers with the means to collaboratively create those forecasts, he says. "Getting to that decision quickly is the key part of the whole process," Hagerty says.

Other enhancements to version 3.5 include real-time data rollup and backward propagation of revenue forecasts in TopLine Manager, and multiattribute planning and reporting capabilities, such as by program and by project, in SpendCap Manager. Closedloop supplies Dynamic Financial Control on a hosted basis. Pricing is based on the size of the user company, with the cost per module around $150,000 to $250,000 for a $1 billion company.