Controlling is not just about drawing conclusions from numbers, but can provide management with a much more complex picture on which to base optimal decisions.
A prerequisite for quick and appropriate decisions is that the company has the information that gives an accurate picture of the organisation's operations, strengths and weaknesses. With this information, the company can easily adapt itself to new environmental conditions. This is helped by controlling, a system of planning, accounting, information, monitoring and analysis based on the principle of accountability, which is extremely complex and covers a wide range of areas, from HR to cost control. The latter can be particularly important for businesses in the current uncertain economic climate.
Below we have summarised why controlling is important for businesses in particular:
Detailed financial planning and control
Controlling is the detailed planning of a company's finances, the preparation of budgets and, in turn, the comparison of actual results. In other words, through planning and back-testing, controlling can exercise control over the company's operations and thus help to ensure the long-term stability and development of the organisation.
Data analysis and reporting
Controlling is responsible for analysing data on a regular basis to produce reports. These reports help inform business decision making and identify areas where efficiency and profits can be improved.
Not only can controlling provide planning on an annual basis, it can also produce monthly/quarterly forecasts to help companies become more results-oriented. Forecasts, like annual plans, can be compared with actual results to provide more detailed information, helping companies to anticipate and react to market changes in a timely manner.
Support for decision-making
Controlling's data-driven analysis helps business leaders to make effective decisions. The data and reports provided by controlling become an important tool in the hands of decision-makers to make the right business decisions.
Supporting the development and implementation of corporate strategy
Controlling is also partly responsible for supporting the development and implementation of corporate strategy. This role also contributes to the more efficient functioning of the company.
Increasing economic value
Controlling enables company managers to assess the effectiveness and efficiency of the company. This can help the company to use resources more efficiently and, as a result, increase economic value.
Controlling helps company managers to communicate better with different departments and to speak a common language about the company's performance and its goals. This improves corporate communication and leads to more effective cooperation between different departments in the company.
What data can controlling help you analyse? Some examples:
- Revenue analysis by business line/product
- Detailed analysis of costs by cost centre
- Comparison of results achieved with plans and monthly forecasts
- Cash flow, liquidity analysis
- Business line/project level performance analysis
- Product/service profitability analysis
- Detailed cost analysis
- KPI measurement e.g.: employee performance
External controlling consultants are becoming increasingly popular because of the many benefits for companies that outsource this activity.In today's dynamically changing market environment, the most important factors influencing the success of a business are the ability of corporate governance to make good decisions, identify risks and increase efficiency. A modern approach to controlling is essential for this.
Why work with a controlling consultant?
Expertise and experience
External controlling consultants are usually highly qualified and experienced professionals with extensive experience in corporate controlling, providing companies with an expert who can apply best practices and facilitate more efficient controlling processes.
Objectivity and independence
External controlling consultants are independent of the company and can provide objective opinions and advice. This has the advantage of providing company managers with information that an internal controlling specialist would not be able to provide. This can be very useful for companies in developing and implementing more effective control processes.
Flexibility and efficiency
External controlling consultants are generally more flexible and efficient than internal controlling specialists because they do not have to comply with the company's internal rules and do not have to use the company's own tools and resources. This means that external consultants can work more efficiently and get things done faster.
Engaging external controlling consultants is generally more cost-effective than hiring in-house controlling specialists. This is because external consultants only work when they are needed and the company does not have to pay the full cost of their staff, such as salaries, taxes and contributions.
New perspectives and innovative solutions
External controlling consultants bring new perspectives and innovative solutions to the company's approach because they are constantly training in their area of expertise and are not distracted by other activities.
Of course, controlling is an area that can be explored in more depth than the above, and this article is intended to raise awareness. If you would like more information or a tailored design or review for your company, please contact us and we will be happy to assist you.
The summary was written by: Anett Pető-Szűcs