AAUP 2013: P&Ls (F. Toolan)
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P&Ls (profit and loss statements) serve several purposes for publishers including planning, budgeting, risk analysis, forecasting, and managing projects at various stages from acquisition to publication. P&Ls contain different levels of detail depending on the project stage and can track information for individual titles, formats, departments, and overall annual goals. An automated system is needed to manage the complexities of collaboratively tracking and rolling up the many changing variables and financial details across multiple P&L stages, products, and reporting levels that ultimately determine a company's profitability.
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AAUP 2013: P&Ls (F. Toolan)
- 1. P&L’s and Publishing Cycles 6/22/2013
- 2. What is the Purpose of a P&L? • They are a Component of: • Planning – Budgeting • Risk Analysis • Forecasting • Re-Forecasting • Managing
- 4. General P&L StagesProject Acquisition • Viability • Investment Determination Work Publication Scheduled • Detailed Planning • Initial Forecasts Product/Format P&Q Descision • Final Projections
- 5. P&L’s are used for Many Levels Format Work Project Acquisition Title 1 Hardcover eBook Title 2 Paperback
- 6. Some extend the process…Project Acquisition • Viability • Investment Determination WorkPublication Scheduled • Detailed Planning Product P&Q Descision • Final Projections Product Actuals • Data from Backoffice systems
- 7. And Others have a broader vision Annual Goals •Revenue •Profit •Projects Signed Budget Plans •By Editor •By Discipline Project •Acquisition •Viability •Investment Determination Work •Publication Scheduled •Detailed Planning Product •P&Q Descision •Final Projections Product •Actuals •Data from Backoffice systems
- 9. Each Stage Requires Some Degree of Collaboration P&L Stage Editorial Sales Production Finance
- 10. Different Stages Require Different Details • Pre-Acquisition • Tool for Editors to “Play” with a project • Acquisition • Tool for helping Editors to “Sell” a project • Tool for helping the Business “Buy” the project • Transmittal/Launch • Tool for Detailed Forecasts for the season/year • Final Price & Quantity Decisions • Tool for re-Forecasting based on Market Conditions
- 11. P&L’s Have Many Levels of Detail Stage Version Product Form Details
- 13. Versions of a Stage
- 14. Product Form Details of a Version
- 15. Royalty Detail
- 16. Production Specs
- 17. Why a System to Manage This? • Profitability is the direct result of Planning, Risk Management, and Accountability. • Goals need to be set and Managed • By Discipline • By Editor • By Division • There are many things in Flux at one time • There are too many details • You need to roll up all those details in many ways to see where you are and what you still need to do
Editor's Notes
- The number 1 question we are asked when talking to our clients is:How do other publishers do X? Well, most publishers manage P&L’s during 3 stages
- And they manage them at a couple of different levels.During the Acquisition, they are managing projects, and they are trying to figure out a publication strategyDuring Transmittal (or Publication scheduling), they are looking at titles and they are thinking of Release strategiesAnd finally during the final Pice & Quantity decisions, they are thinking about and playing with the assumptions about individual products
- But, some publishers have extended this to include matching actuals back to the assumptions made at each stage.These are often in the form of data being fed back from other systems
- But, recently, our friends at California, expanded the vision even further.
- By using goals, and financial budgets, discipline sponsors and editors can be held accountable for their production
- During each stage of the P&L there is some degree of collaboration among various departments. In the earlier stages, this collaboration may be minimal, but in later stages collaborating departments may get very involved in producing detailed estimates.
- Pre-Acq – minimal details, highly templated – a Play timeAcquisition – high level estimates, some detailed forecasts in order to mitigate risks – a buy/sell timeTransmittal/Launch – detail enough to create an annual budget – a Planning/Forecasting timeFinal PQ – managing price and quantity assumptions and deciding on an execution strategy.
- In order to produce a stage, you really need to play with your assumptions for that stage. In order to decide on a strategy for the stage, it is very helpful to see multiple sets of assumptions side-by-side.Each set of assumptions – requires looking at many details associated with them. And if multiple product forms are included, then details need to be managed for each product form
- In the ever expanding world of new formats, and retailer-specific formats, you can see how this can create an incredible number of details to track very quickly