The press releases are piling up: small and medium-sized companies are increasingly experiencing economic difficulties – many have concrete closure plans and are implementing them. The offers for sale are increasing. Energy shock, brittle supply chains, shortage of skilled workers and inflation are the reasons. Price increases are not only hitting their own profit and loss statements, they are also causing customers to hold back and lower sales. An analysis by the information service provider CRIF sees an increased risk of insolvency for around 300,000 companies in Germany. That is around 10% of the companies in Germany. The industries that are particularly energy-intensive have already shown significant increases in insolvency cases. This situation calls for attention and caution.
Posts
The planning of a company succession, the sale of the company or the departure of a shareholder: The company valuation can become relevant for very different reasons. Basically, the company value is an important criterion when a company is up for succession. The company value provides important guidance at all stages of the succession process: If an entrepreneur knows the company value at an early stage and if it turns out to be lower than desired, he may have sufficient time until the time of the planned sale to take suitable measures to increase the value. If the entrepreneur is weighing up various succession options, the company valuation is an important factor in the decision-making process. For example, in order to clarify whether the sum would be sufficient as retirement provision. Or to ensure fair distribution within the family succession. Or to discuss what tax effects an internal family succession would have. When it comes to a concrete sale, the company valuation is a critical decision-making basis for the negotiation talks.
The whistleblower directive is coming. But very few companies have taken care of it yet. This is shown by a recent PWC study. And it also confirms our impression in practice. But time is pressing: if the law is finally passed by parliament, all companies with 50 or more employees will be obliged to install a corresponding system. And the number of employees here is based on the European concept of employees – and this differs from the usual way of counting. Employees include everyone employed by the company without exception, including interns, mini-jobbers, and the management itself. This is important for determining whether thresholds are reached or not.
In many medium-sized family businesses, a succession is due in the foreseeable future. In most cases, the company is to remain in family ownership. But not all daughters and sons are talented entrepreneurs. Or simply no one wants to do it. Then an external manager can be appointed.
When an external manager takes over the management of a family business, there are many challenges – for both sides. At the same time, the cooperation also holds many opportunities: External managers can professionalize the company with their experience and bring fresh momentum into the business. For the collaboration to succeed, a systematic approach is advisable – starting with the onboarding phase. Read more
No figures again? No up-to-date evaluations again? In many medium-sized companies, things are not running smoothly in the accounting department. The effort required to enter, print and check incoming invoices and receipts is often high and involves a lot of manual work. Staff shortages add to the stress. It is not uncommon for accounting to lag behind what is happening in the company. Then the entrepreneur lacks an overview of the economic development of his company – which makes decisions more difficult and involves risks. Every entrepreneur is familiar with the modern and sustainable solution, the digitalization of processes. However, the concrete implementation is lacking in many places. The digitalization of the accounting system is not a free skate for companies, but a duty, otherwise the company cannot be actively managed.
Runs: Digitized Processes save Time and Resources
Digitization of accounting aims to automate routine activities and simplify individual process steps. And it succeeds quite pragmatically. Whether it’s invoice receipt, invoice approval, archiving or invoice issue, reminders or automatic account assignments: With the right tools, accounting processes can be managed efficiently, on a daily basis and transparently. To do this, the first step is to revise the processes: What needs to be changed, what needs to be redone and what can be retained? This is the core of digitalization in accounting, because if only the manual path of a paper invoice is digitalized, this does not lead to an improved process. In the course of digitalization, the opportunity should be taken to really improve processes and structures. Subsequently, based on the requirements, it can be clarified which tools can be used for the respective company. For example, this could be new accounting software, a document management system with font recognition. The right, GoBD-compliant tools significantly simplify the workflow through automated processes and can also be implemented as a first step as an isolated solution with manageable effort.
Less Effort, more Capacity – the Advantages of Digitalization:
Digitized accounting works quickly, avoids errors and reduces the use of human resources. Cooperation with tax advisors, auditors and banks can be noticeably facilitated. On the other hand, management has an overview of the status of liabilities, receivables and its own liquidity through up-to-date evaluations. With a custom-fit solution, medium-sized companies can achieve efficiency gains and information advantages.
When THE MAK`ED TEAM supports its medium-sized customers in the digitalization of their accounting, pragmatic recommendations for action are developed on the basis of the individual starting conditions and the company’s goals. We have a high level of expertise in the establishment of new structures and the transformation of accounting and finance and know the decisive parameters for a successful and efficiently implemented digitalization.
Read more about accounting and digitalization here:
Accounting Compliance as a Basis for the Annual Financial Report
Orders cannot be accepted because production does not create enough output? The complaint rate is increasing? The company is in a tight financial situation because too much liquidity is tied up in the entire production process?
Many medium-sized manufacturing companies are currently in a challenging situation. Weaknesses in the structures and processes of production thus become even more apparent. Of course, no production is perfect. If it is viewed and optimized according to the principles of lean management, significant improvement results can be achieved. Lean Production creates a customer-oriented, lean, and resource-efficient production process and strengthens the competitive position. Lean Production aims to avoid waste at all levels in production processes, to ensure good quality, to keep delivery times short and costs low.
One comes, one goes – and if one doesn’t go, one is too many. This statement already says a lot about why succession in family businesses is demanding. It takes a successor who is willing to take on responsibility and it takes an entrepreneur who is willing to put responsibility in the hands of his successor. The path to succession is crucial because it involves answering many questions. Systematically addressing the issue of succession in the company at an early stage ensures success – even if the result will most likely be different than expected.
Sooner or later, undesirable developments in a company become apparent in its earnings situation. Once there, it is usually only a matter of time before the company’s liquidity is also affected. So, if there are negative deviations in sales and/or earnings compared to corporate planning, if the results are below those of comparable companies or even negative, it is imperative to take countermeasures. Precisely because time is usually of the essence in such cases, it is crucial to proceed thoroughly and professionally.
It is increasingly important for medium-sized companies to meet sustainability criteria and to make this visible. In the overall economic structure, they are always part of a larger supply chain and thus bound by the sustainability requirements of other stakeholders. Demands on SMEs also come from banks and insurance companies. This is because the ESG criteria that a company implements are playing an increasingly important role in the financial sector against the backdrop of sustainable finance and are important when lending to an SME. In addition, the expectations of customers and employees are becoming increasingly concrete. But how specifically does an SME go about thinking, acting, and deciding in terms of sustainability? The topic of sustainability is complex. There are 20 important sustainability criteria, which include, for example, “innovation and product management”, “resource management” or “employee rights”. Therefore, the key question is: Where is the topic of sustainability relevant in the company at all?
Every company knows that it is no longer possible without digital tools – especially in HR management. But how do you implement such a digitization step in a medium-sized company? One of our customers, a medium-sized mechanical engineering company with its own production facilities and around 150 employees, decided to take the step forward with us and digitize its HR processes.
The particular challenge was that, at the start of the project, a lot of data and information was still in paper form and very little in Word or Excel. In addition, the company’s resources for this project were very limited. Despite the hurdles, the software was successfully implemented, and the entire company benefited greatly. Many processes have been automated since the system was introduced, which has freed up valuable personnel and financial capacities in the company. Managers, HR managers and employees benefit from greater transparency and 24/7 access to the data they need for their tasks.
