In any business, the department has to invest resources and has targets to achieve in a given period of time.
The purpose of management control is to help people work efficiently and achieve their goals.
This path is never direct or linear and requires overcoming difficulties and unforeseen events.
It involves making decisions, so it is essential to check that the decisions taken are consistent with the objective set.
For this reason, people need the right tools to read and analyse data and information and, if necessary, to change course.
In small and medium-sized enterprises, information relevant to the efficient performance of activities is often not shared at different levels of the organisation, especially when only the official accounting documents required by law are available.
This is a correct decision, as these documents concern the company as a whole, while operational staff need specific reports to be able to work at their best.
The ideal tool for efficient management is the strategic plan, especially when large investments are involved.
The plan consists of a qualitative part, i.e. the description of the activities to be carried out, and a quantitative part, i.e. the evaluation of the resources to be used.
However, even in the absence of a plan, as is the case in many companies, it is possible to provide good support to the operational functions by starting with good use of general accounting records, provided they are properly processed.
In this way, we can provide the various departments with specific reports which, at least in quantitative terms, provide a simple roadmap for them to follow.
"It is the customers who make it possible to pay salaries and without customers, there is no business."
It is a quote that needs no explanation.
However, it can only be fully understood by sharing ad hoc reports that allow the various employees to know the costs of their structure.
Why do the Statutory Balance Sheet and the P&L account not meet the needs of the operational departments? Because these documents have a different information purpose for third parties, institutional investors and public bodies. They must therefore apply synthetic and homogeneous criteria to all categories of companies. Management control, on the other hand, provides the various departments with the appropriate tools to enable each of them to contribute to balanced and sustainable growth in the long term. Each company does not work for others, but for itself, and only in this way can it concentrate on building wealth and developing the solidity that will enable it to withstand any unforeseen event.
In short, management control is a great help to any company that pursues balanced and long-term growth objectives and financial independence.
In conclusion, SMEs must not think that management control is a function that only benefits large companies and requires high costs to hire specialised personnel.
Kenning Consulting is able to create a tailor-made management control project for SMEs, at an affordable cost and with tangible results in the short term.
Management control, on the other hand, provides an adequate information tool to the various departments so that each of them can contribute to balanced and sustainable growth in the long term.
Benefits to be gained from this project:
Kenning Consulting undertakes to sign a non-disclosure agreement to protect the confidentiality of the company’s data and information which it will come to know during the consultancy.
Find out more about our projects for management improvement and you will see they can be useful for your company!