Transparency in Financial Controlling (Management Accounting)

An €800m turnover company with 15 international locations was struggling to gain transparency over the operational performance of its business units and functions. The company operated many different ERP systems with no common reporting for the management accounting. The Executives had significant problems in managing and controlling the operations. It was impossible to allocate resources based on hard facts and figures, which impacted investment decisions, manufacturing network strategy, product costing and pricing. All of which impacted cash flow and EBIT.

Firstly, we agreed the reporting requirements with the management team from across the organisation. Then we introduced common reporting standards and evaluation methods, including a standard chart of accounts, a cost centre plan and project controlling.  In parallel we established a Management Information System which facilitated easy access to the information at both a detailed and summary level.

The detailed insight into the cost structures provided by the new system, resulted in:

  • Positive changes to customer preferences, production locations, investment decisions and strategic priorities.
  • It enabled a significant improvement in the return on capital employed.
  • It facilitated consistent communication with shareholders on the business performance and operational challenges.