Management control and early warning systems
There are many reasons today for implementing a state-of-the-art management control system, or for reviewing or upgrading an existing system.
The economic and financial crisis, in the wake of the COVID-19 pandemic, has highlighted a series of management and financial issues that had gone undetected by traditional management control systems.
The new Legislative Decree 14/2019 (regarding companies in crisis and at risk of insolvency) will make it mandatory to introduce early warning systems aimed at detecting a company crisis in its early stages, so that timely intervention may prevent it from spiraling into a state of insolvency.
Time has become an increasingly crucial factor: reports need to be made available in real time or on a daily basis; scenario simulations need to be carried out repeatedly and in the shortest possible time.
Management control system check-up
This is an all-round survey of the management control system. The aim is to identify possible areas for improvement and draw up an action plan, which may involve the intervention of a temporary manager, to implement new tools or IT systems to meet company needs, and to train the staff who will use them.
Industrial and analytical accounting
Audit or implementation of the company’s strategic business areas, its cost-centers and profit-centers, to match the organization’s structure and needs. This will allow management to understand the actual contribution to, or impact on, value creation of each single function. Analysis, definition and implementation of the most suitable system for calculating product and/or service costs for this specific company.
Business plan, budget, forecast
After an in-depth analysis of the company, a document is drawn up, converting the company’s medium-term strategies and goals into numbers. This produces consistent, sustainable variables across balance-sheet and P&L.
The first yearly plan then becomes an operating plan for monitoring the budget. Details are shared among the various company functions and the plan provides guidelines for achieving the goals set for the year. Progress is monitored through regular simulations and forecasts (eg. the year-end-outlook).
Financial planning and early warning systems
Support in drawing up regular financial reports and in strategic planning leading to proper management and monitoring of cash flow. This provides a forward picture of the company’s ability to service its debt and, along with proper early warning system, ensures compliance with the terms of new Legislative Decree 14/2019.
Consolidated management accounts
Support in drawing up accurate monthly and quarterly management accounts and in setting up efficient workflows and procedures to produce them in timely fashion. Delta analysis for taking corrective measures in good time.
Implementation of a system for analyzing and monitoring the real margins for each strategic business area, product-line or service-line, by geographical area and by customer. Analysis takes into account fixed and variable costs, direct and indirect costs.
Once the quantity and the quality of the data available to the company has been assessed, the next step is to develop a customized reporting system that can help and support the company’s management and staff in their decision-making.
Support in analyzing and evaluating important investment decisions, whether tangible, intangible or financial assets, and prediction of incoming and outgoing financial flows and their impact on return on investment.
KPIs and Balanced Scorecard
Identification and quantification of the most suitable KPIs for the company. Definition of the best times and methods for monitoring them and of how they should be deployed through the company.
Development of IT systems (ERP, Business Intelligence, personal computing)
Support in the set-up of a new company ERP system:
- system requirements analysis
- set-up of parameters
- output verification
- beta testing
- authorization for release and production
Assignments in this area can last from 8 to 12 months.