Development and improvement of management control

Supporting migration of management control from a “home-made” model to a more advanced group system.

Context

The company produces automated packaging machinery. Turnover is about €80 million. The company is undergoing a phase of integration of their own systems with those of their parent company: from a basic management control system they are making the shift to a standardized group system. At the start of the assignment, their planning and control processes are neither well integrated nor perceived as useful management tools.  They are seen, rather, as a “necessary evil”. There is also a plan to replace the current Head of Administration and Control and to appoint a Controller.

Problem

The company must ensure total compliance with the parent company’s accounting management procedures, thus guaranteeing a complete and swift integration with group practices. Contract Manager is asked to:

1. Immediately provide support in the Management Control area, working alongside the General Manager and the group Controller.
2. Draw up the company budgets for 2018 and 2019 together with the heads of the company’s functions and the General Manager.
3. Define quarterly forecasts and monthly closures.
4. Set the control system in motion and check the reliability of inputs and outputs.
5. Take an active part in the selection of the new manager who will head up Management Control.

Solution

Contract Manager selected a qualified manager who immediately ensured compliance with all the requirements of the parent company, helping the company achieve higher organizational and procedural standards.

• Forecasts for the assignment period and the budgets for 2018 and 2019 were drawn up. A schedule, together with content, deadlines and accountabilities was similarly defined.
• Timely monthly closures and management reports were sent to headquarters on a regular basis.
• A plan was implemented for monitoring the quality of management accounting data produced, reconciling them with general accounts.
• Cost breakdowns by cost center were defined and a cost / product structure was aligned with group practices.
• The General Manager and the group Controller received immediate support, while updated management information was cascaded throughout the organization.
• The interim manager took an active part in selecting the company Controller, providing support to HR.